Reward to Stay On Board

Having a strong and ongoing rewards and recognition programme has proven effective in keeping key talent.

By Simon Kent

The war for talent continues incessantly with employers now looking to rewards and recognition as their first line of defense and strongest line of attack. According to Employment Hero’s September 2021 Employee Movement and Retention Report, 31% of employees who were seeking a role at a new organisation were doing so due to a lack of appreciation or recognition. At this particular time, it is clear that if an organisation doesn’t reward or recognise its employees appropriately, it will need to find new candidates to fill the resulting vacancies.

Salaries are undoubtedly increasing and there are numerous cases of bonuses for signing up and staying on. However, the general feeling is that such bonuses are very expensive, only have a short-term impact, and are relatively ineffectual at keeping talent in place.
Ian Milton, work and reward expert at Willis Towers Watson makes clear that any initiative made on remuneration must preserve fair pay within an organisation. “Any pay increases made to key employee segments must be considered in the context of total pay levels across comparable roles,” he says. “Balancing reward for new and existing employees and considering how HR manages the ever-growing complexity of different employment scenarios are also key considerations.”

Milton says the definition of reward has widened over the course of the pandemic with well-being, skills and career development, and flexible working all coming within the scope of an employer’s offerings. “We’ve also seen companies broaden their talent markets with less regard to working location and start to question the logic of location-driven premiums,” he says.

Hannah Yardley, chief people and culture officer for Achievers, believes organisations need to take a fresh approach to the concept of reward, ensuring their employees never forget they are valued and appreciated. “When it comes to retention,” she says, “giving frequent, meaningful recognition and investing in employees’ growth potential have a much greater sustainable impact than spot bonuses.”

Research from Achievers Workforce Institute has shown that feeling recognised has more of a positive impact on employee engagement, productivity, and advocacy than a fair salary.

Yardley also says that the responsibility for defining the employee experience—how remote working is arranged, the nature of compensation, and even DEIB policies—now rests more with the employee than the employer. “The balance of choice is now much more in the hands of employees, rather than their organisations in identifying the actions taken to influence the employee experience,” she says. “This is a massive culture shift. Those that are slow or unwilling to adapt will suffer negative impacts to their reputations, and also their ability to retain employees.”

Base compensation levels and flexible work are taken for granted now, says Yardley with a higher premium being placed on career development and progression.

“Rather than people signing up to be continuously measured on their ability to deliver on company goals,” she explains, “they are demanding that employer’s actively enable their success by offering the best available training, mentoring, and tools.”

The lack of human interaction and changes to how workers are monitored and measured has also impacted the importance of recognition. Today’s workforce is more likely to be measured on productivity rather than their pre-pandemic counterparts whilst the dispersed workforce has eroded company culture. Achievers research found 42% of those asked said company culture has diminished since the onset of the pandemic and this was previously an important prop for mitigating performance issues. “If your employees are feeling burnt out or concerned about their productivity,” notes Yardley, “traditional reward schemes with compensation can only go so far.”

The trend is echoed by Emily Miller, VP of sales, EMEA at Workhuman. For her, the lack of human connection experienced with one employer has contributed to the number of employees who have left their jobs to find work elsewhere. There simply isn’t the same cultural glue there to make them stick. “To bridge that gap, we’ve seen companies double down on recognition in an effort to increase the value of positive work cultures in a remote and hybrid world,” she says.

Putting culture front and centre for the employee wherever they may be is crucial to ensuring they want to stay, and that culture has to be supported through effective recognition. “A strong employee recognition programme allows employees to be seen, heard, and appreciated, all of which are core human needs,” says Miller. “When you’re connected to your colleagues and feel appreciated, recognised, and respected, a small raise or bonus isn’t going to lure you away. The social bonds at work are a key resource for being both healthy and productive.”

Miller believes adopting a culture of micro-bonuses, rather than a one-time annual bonus, helps build sustained employee motivation and engagement. This in turn promotes performance. “Incremental rewards throughout the year through strategic programmes, such as employee recognition, not only keep employees engaged but increases the likelihood of retention, with the added benefit of retaining people who are connected to their work and their community of colleagues,” she concludes. “When people are met with empathy and given a chance to grow, their feelings for the organisation grow far more than an attachment to a pay packet.”

Alex Hattingh, chief people officer at Employment Hero agrees reward is intrinsically bound to company culture and should be leveraged as such. “Use your reward and recognition programme to reinforce your organisational values,” he says. “This will also have a big, positive impact on your culture. By rewarding and recognising behavior based on your values, you are reinforcing your values. Moreover, you give people permission to call out employees who are not living your values. These people have a negative impact on your culture and need feedback to get back on track.“

Hattingh affirms that at the heart of reward and recognition is an acknowledgement that everyone on the team is valued for their unique contributions and sending this message to a team can do wonders for a lagging morale. “I would suggest that putting a greater emphasis on reward and recognition can cushion some of the challenges teams have endured and put company culture on a road to recovery, whilst also making the business more appealing to incoming talent,” he says.

There is no doubt that employees continue to face challenges even as the pandemic eases. The cost of living, international crises, and labor market volatility do not make for a comfortable background to the workplace. Consequently, companies need to think holistically and recognise the value and potential of all elements of reward if they want to continue retaining talent.