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Improving Employee Retention with Real-Time Rewards
19/01/23
Mohammad Iesa Morshidi
Adam Idris
Rishi George
The ongoing war for talent is drawing the attention of business leaders to the issue of business continuity, as record numbers of employees are leaving their jobs than at any other point in history. Employees are key to business success as they help carry the business through times of challenge and change, and a greater importance placed on employee retention is paramount. In fact, according to PwC US Chairman, Tim Ryan, “The talent war is over. Talent won”.
Even if you don’t entirely agree with the strong statement, it’s clear that this shift is a result of changing work trends - from the rise of the gig economy, to the transition to remote and hybrid working, the demand for greater pay equity and transparency, and adapting to the different needs of a generational workforce. Understanding what employees want is critical to knowing how to retain them. PwC’s Workforce Hopes and Fears Survey 2022 (Malaysia report) found that only 59% respondents are satisfied with their jobs, with 17% very likely to switch to a new employer in the next 12 months. Pay comes out on top when employees consider changing jobs (69%), followed by job fulfilment through rewards and recognition (66%).
What this tells us is that people want flexibility and customisation in how they are recognised and rewarded. Employers are now having to reevaluate their approach to their total rewards strategy, to ensure that they’re providing the right monetary, beneficial and developmental rewards to attract talent, and keep existing employees motivated, retained and engaged.
Understanding current reward preferences
Currently, employees’ rewards preferences are managed via employee engagement surveys, pulse surveys and employee exit interview results. These surveys are also revealing that employees prefer a more customisable rewards framework - some prefer tangible remuneration, recognition and respect, whilst others prefer development opportunities, diversity, and work-life integration. The demand for personalisation by employees is part of current workforce trends, and organisations should incorporate this in a total rewards strategy as part of their employee retention programmes.
Utilising People Analytics to improve retention. It's retention on the go!
With the risk of employees leaving for organisations offering better opportunities, it’s high time that leaders change the way the business rewards employees. Having access to real-time data that provide insights and address employees’ demands for job fulfilment can help employers to retain their best talents.
The aforementioned total rewards strategy isn’t just about how much you can spend on employees. Your strategy should also focus on understanding what really matters to employees in the here and now, from knowledge harvested from real-time data, to ensure that money is being spent effectively.
Here’s how real-time intelligence can be part of your organisation’s retention strategy:
1. Using preference analytics to understand changing employee needs
Engaging with employees and collecting information, and then visualising the data in a way that is easy to process can help employers understand the needs of their employees. There are tools that help employers understand employee’s reward preferences on a real-time basis, while using algorithms to present analytics and results that deliver deep, quantifiable, actionable insight for better decision-making. By having real-time intelligence, employers will be able to better encapsulate what matters most to the employees and seek ways to address them.
2. Incorporating personalisation to adopt the changing rewards landscape
Customising rewards to employee preferences goes a long way towards making employees feel heard. As a result, employees are more likely to feel appreciated, which impacts positively on overall satisfaction and employee engagement. And as more organisations begin to offer personalised rewards, talents have options when it comes to selecting an employer that can meet their needs, leaving behind those who are unable to offer attractive total rewards.
An example of this can be illustrated when a major professional services firm in the US was looking to improve their insights into the preferences of over 5,000 of their employees. We helped to engage employees in a multi-phased approach using real-time intelligence. This was aimed at getting a better understanding of the perceived value of their benefit packages, specifically focusing on different preferences across the employee population. The client found this exercise “very valuable” and have since rolled out intelligence tools to the firm’s offices across Europe and the Pacific to keep a finger on the pulse of employee preferences. From an employee perspective, a higher percentage of employees reported being satisfied with how their employer has addressed their total rewards and well-being.
3. Balancing cost and employee satisfaction
Businesses often operate on a tight margin with an eye on the bottom line. Managing spend on employee benefits is no different. Rewards intelligence is an investment that allows you to account for the effectiveness of your total rewards expenses and its real impact on employee retention and job satisfaction. After all, losing employees costs more than retaining them, and we know that job fulfilment is a key criteria in their decisions to stay with their employers.
To conclude, it’s crucial that businesses start looking at rewarding employees differently, and make strides to understand and address employee preferences in order to retain them. There are many tools available out there that can help businesses collect real-time data on employee preferences. However, the business must first formulate a strategy to leverage the data collected and outline the next course of action. This can include bulking up the total rewards strategy, or other elements of employee retention and implementation.
We will be happy to discuss how digitalising your people operations can help enhance your retention programme. Speak to us today.
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