Talent recruitment and retention is about more than moneyFor your employees
With the uncertainty of global and local economies remaining a hot topic in the news, HR professionals are finding themselves in a bind. How do you find and attract the best recruits, and keep them, at a time of tight budgets? What can you do besides upping employee salaries?
A more creative approach to structuring employee packages is required, which means thinking broadly and taking the priorities and peculiarities of today’s workforce into account. But first, let’s look at economic projections as they currently stand.
The global economy summarised
In its latest Economic Outlook statement, the International Monetary Fund foreshadowed a slowing global economy across 2023.
“The baseline forecast is for growth to fall from 3.4 percent in 2022 to 2.8 percent in 2023, before settling at 3.0 percent in 2024,” states the report. “Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023… underlying (core) inflation is likely to decline more slowly. Inflation’s return to target is unlikely before 2025 in most cases.”
The US economy appears to be outperforming expectations – so far, anyway. Economic data from April shows the US Labour market remaining strong. As noted by Deloitte Insights, employment growth was moderate in March, with the unemployment rate remaining historically low. Data released by the US Bureau of Labor showed that professional and business services, healthcare, restaurants and government saw the largest increases in jobs, while the country’s manufacturing sector experienced a fall in job vacancies.
Most expectations for Euro zone economies anticipate a contraction over the course of 2023. According to the Office for National Statistics, retail sales volumes in the UK fell by 0.9% in March, following a downwardly revised increase of 1.1% in February,” notes ShareCast. “Most analysts had been looking for a 0.5% decline.
Closer to home, and probably of more significant to the Australian economy, China’s rate of real GDP rose 4.5% in the first quarter of the 2023 calendar year after two years of negative growth. While the figure was below the Chinese Government’s goal of 5%, retail sales were up 5.8% on the previous year, exports rose 8.4% and infrastructure investment grew 8.8%.
Though the Australian economy has been feeling the effects of sharp interest rate rises and high cost of living numbers, its performance continues to be something of a mixed bag. The sharpest rise has been in the official cash rate, which climbed from 0.10% in April 2022 to 3.6% as of the last week of April 2023. GDP growth contracted from 3.1% in April 2022 to 2.7% as at December of the same year (the 2022-23 Q3 GDP numbers won’t be available by the time this article goes live) and inflation climbed from 6.1% in June 2022 to 7.8% in December 2022.
Despite these figures, the nation’s unemployment rate fell from 3.9% in April 2022 to 3.5% in February 2023. In similarly positive news in the context of economic indicators, average weekly earnings rose from $1,344.70 in May 2022 to $1,378.60 by November 2022. However, as many economists and ACTU Secretary Sally McManus have argued, the one-two-punch of higher interest rates and cost of living increases has nullified any boosts Australian wage earners may have seen in their pay packets.
This combination of factors suggests that, for the foreseeable future, HR professionals will need to continue to be inventive in designing salary packages to retain high-performing staff and position their organisations as workplaces of choice.
What matters to today’s workforce
The dollars and cents they take home at the end of the working week still has a huge impact on an employee’s job satisfaction, but it’s far from the be-all and end-all when compared to the workplaces of the ‘80s and ‘90s.
Gen Z employees, for example, take their work/life balance and wellbeing seriously. This demographic has long preferred the flexibility of choosing their work hours according to lifestyle factors and family or social commitments. In terms of salary packaging, cashless benefits like ride-share vouchers, public transport and mixed mobility inducements tick a lot of boxes for millennials.
Employers, particularly in the post-lockdown age of Covid, are aware of the importance of having remote or flexible work options available for staff where it’s practical. While it’s unlikely there will be a wholesale shift away from working in a conventional office setting to working from home (as some predicted across 2020 and 2021), offering employees the option to work remotely as a hybrid arrangement is a major benefit for today’s workforce.
Further to flexible working and prioritising wellbeing, there are increasing demands for employers to recognise some fundamental challenges in the way we raise families, including caregiving obligations as our population ages. Assistance with childcare – whether financial or through flexibility with working location and hours – is a major inducement for the parents of young families.
Similarly, for people who are trying to juggle responsibilities at the workplace with being the primary carer for elderly family members or those with special needs, developing an employee package that recognises these challenges can go a long way with helping to retain and attract quality people.
The importance of being a good employer
Being seen as a good employer is fundamental to attracting and retaining staff. Even the most generous employee benefits program won’t count for much if you don’t have a great work and leadership culture.
So, how do you ensure your organisation is seen as one that people want to work for?
According to research from Gallup, companies consistently recognised as employers of choice often have a strong focus on effective employee engagement. The key drivers to employee engagement are purpose, people development, a caring manager, ongoing conversations, and a focus on strengths.
In a Harvard Business Review article titled ‘What the “Best Companies to Work For” Do Differently’, author Dr Michael O’Malley notes, “The best places to work provide people with life satisfaction, as opposed to job satisfaction alone. Almost all the corporate founders and CEOs we spoke with told us they build their companies with people in mind. To them, a healthy culture is as important as a healthy balance sheet. Their benefits go far beyond minimum wage.”
To measure up to these expectations, employers need to successfully develop a culture that recognises people as individuals. They also need to create work environments that place a high value on their employees’ strengths, and that offer them learning opportunities, autonomy and, most importantly, provide room for both professional and personal growth.
Good employers need to value the skills of each person in their organisation and treat all employees with respect. Good employers are transparent about why they do what they do and, in the process, promote greater trust between workers and managers, ultimately leading to more effective collaboration and productivity across your organisation.
Another attribute of good employers is championing a workplace culture that ensures people have a voice. Employees need to feel they can suggest new ways of doing things or suggest how to make their workplace a better place if something isn’t working for them or there are issues with how things are done. They need to be able to do this without fear of being belittled or ignored, or of being reprimanded or even fired.
It’s also important to ask yourself how your organisation stacks up when compared to other employers in your industry. Are you hiring the right people? Are you invested in the success of your employees? Do you provide a healthy work environment where people can thrive? Do you pay attention to your staff feedback? Do you encourage autonomy?
The global economic climate continues to put the crunch on pay packets, but cash is not the only motivator for employees in this modern age. Employees who are content with their working environment are more likely to work better, while those who aren’t content will question their need to stay with that employer and seek employment opportunities elsewhere.
In today’s climate, it pays to ask the question: Am I a good employer?
As well as being the kind of employer people want to build a career with, understanding what benefits matter to today’s workforce will help you keep high performing, highly skilled talent in this time of economic uncertainty, ongoing wage pressures and cost-of-living challenges.
Do you have all the essential elements included in your staff benefits program? Talk to SG Fleet today.