By Elliot H. Clark
In this monthâs issue, we present the Bakerâs Dozen Customer Satisfaction Ratings of more than two dozen recruitmentÂ process outsourcing (RPO) providers. Talent acquisition is a complex blend of operational excellence,Â technological application, sales panache, and marketing. Yes, employment branding is a major part of the conversation.Â How current and potential employees view a company is a big part of the decision-making about joining or staying, soÂ perception of the companyâs policies are paramount in this dialectic.
Last month, we profiled the Bakerâs Dozen Customer Satisfaction Ratings of the recognition and rewards industry. I wantÂ to discuss how rewards policies are related to attraction and retention, and how monumentally, epically, and inexplicablyÂ short-sighted it has been for so many companies to foolishly, stupidly, and callously cut the budget out from under theirÂ rewards programs during the global pandemic. And if you did, yes I am talking to you!
The pandemic and the economic pandemonium that has followed have forced many companies to make gritty andÂ tough decisions to survive. Many have had layoffs, furloughs (the new term for âlaid-off,â but you get benefits), andÂ compensation cuts. None of these are emotionally easy, and I acknowledge that many companies had to do what theyÂ had to do. I would like to put aside the layoffs and the furloughs for a moment and focus on compensation cuts. TheÂ issue I am raising is that for most large companies, as a budget line item, rewards are often less than one percent of theirÂ compensation budget and they are viewed as a âleadership and developmentâ expense. But in my opinion, they are notÂ an L&D cost. Let us re-categorize rewards based on how employees experience them: they are variable performance-basedÂ compensation. If you say it that way, it changes the feeling doesnât it?
Overall, companies have a few levers to drive employee behavior or create perception, and rewards are recognitionÂ programs are among the more effective. That is a reality understood by most HR leaders. However, employees see theÂ rewards part simply as a way to get something extra for doing something that needs to be worked toward and earned.Â If an employee works hard to achieve a goal and earn a reward or incentive and the program is canceled, that incentiveÂ will be less effective in the future. That employee will also be disappointed with their organization and feel that theirÂ compensation opportunity has been reduced. This may influence their commitment and overall retention. We need toÂ start viewing rewards and recognition as part of the compensation plan or, as I state above, as incentive-based variableÂ compensation rather than a L&D expense.
We have all had many hard choices this year and reduction in expenses were necessary. My point is that if the employeesÂ view something as a change in compensation opportunity, employers also need to see it as such. Moreover, mostÂ companies spend far less on rewards than they do on other forms of compensation and, perhaps, many can preserve thatÂ program as a way to engage, motivate, and reward the employees they did not layoff.