The skills shortage is starting to bite and the latest National Salary Survey from the Australian Institute of Management (AIM) shows that average staff turnover has increased to 12.6%, up from 11.5% in the previous study and 9.9% the year before that and that annual salaries at large companies increased by 4.6% in 2006/07.
There is a huge demand for retail workers, ranked second only in demand behind mining, thanks to the booming economy driving the jobs surge. Retail staff earn about $538 on average, dragged down by the high number of part-time workers in the industry or about $811 for full-time positions. Even though retail jobs may not pay as much as some of the other areas experiencing candidate shortages, wages could be in for a lift because candidates are so rare. (Source: ABS)
“Employers still believe that the key to staff attraction and retention is higher pay and financial benefits, but this alone is clearly not solving the problem. More needs to be done on training and career development to convince staff that the employers care about their career aspirations, and more importantly that they are willing to do something,” said Peter Davis, Managing Director, Frontline Recruitment Group.
Recent data from the annual Frontline Recruitment Group Salary Survey shows that salaries in Health, Hospitality and Retail have all increased:
Health - 4.2%
Hospitality - 3.8%
Retail - 5.8%
These increases are pretty consistent with the findings of the AIM survey. However recent studies from the USA indicate that candidates who switched jobs over the past year averaged salary increases of 16.1%. At this stage Australian candidates are more likely to move for a lesser increase in salary than their overseas counterparts are and they are more likely to move for reasons other than just monetary. The important lesson for Australian employers is that by entering into a spiral of counter-offers you risk following the trend abroad where salary increases move into the double digits. So just what is the answer?
How to attract and retain happy and motivated employees
Here are seven practical initiatives to help keep your staff happy, motivated and recognised. Financial incentives will always be a part of the mix, but creativity is key!
Training & development of leaders
“People join companies and leave managers,” is a common adage in leadership courses. One of the most frequent reasons staff resign is because they are managed by poor senior managers.
With staff turnover now a priority for most companies, the spotlight is now on engaging and retaining employees. Leadership training, and particularly training around people skills, has become critical. It is no longer enough to pull a leadership course off the shelf, enrol a few managers then tick the training compliance box when they have finished. To get the best results, managers and their companies working culture need to reflect and support lessons learnt in the leadership classroom.
Listen to your people
The easiest way to learn what matters to your staff is to ask them. Generally speaking, people actually enjoy being asked for their opinion. Make your employees feel you are interested in them personally. Use surveys, individual or group meetings to gain the insights and information to help you plan your retention strategy around areas most important and relevant to your staff. Understanding staff retention means delving into the deeper mysteries of management. It also means asking the questions “Why would someone want to work here? Why would they want to continue to work here?”
Build your employees' esteem
Mark Twain said, "I can live for two months on a good compliment” and that sentiment still stands the test of time. Money may attract people to your front door but something else has to keep them from going out the back door. Show them you value their opinion and ideas and that you are watching their performance. Sometimes a simple monthly 'Star Performer' Award handed out by a Divisional Manager in front of co-workers can have a far greater impact on motivation and retention than any financial reward.
Career progression and succession
The recent AIM study also reported 61% of employees left to pursue career progression or promotion opportunities and employers should take this into account in their retention efforts. Develop career planning strategies for individual employees that align with each employee's needs and desire for future growth. It may mean keeping certifications up to date, sending employees to seminars, or just providing subscriptions to magazines and journals. Providing employees with challenge and excitement can encourage them to stay; they do not want to risk missing a good opportunity. Whatever the effort you make to help their career it will long be remembered.
Work-life balance
Consider providing staff with the flexibility to achieve a satisfactory mix of time at home and on the job. A recent study by consultancy firm Managing Work Life Balance International, found Australian bosses were starting to realise workplace flexibility is the key to attracting and retaining valuable staff, prompting them to offer flexible hours, the option to work from home, extended holiday and maternity leave and part-time work for older employees. 75% of employers said they had spent the last 12 months focusing on increasing flexibility in the workplace, including flexible working hours and the option to work from home.
"More and more of the workforce want to work flexibly, and more and more employers are realising that unless they offer some form of flexibility they're not going to get hold of the best people. Flexibility should be a growing source of competitive advantage for organisations," added Peter Davis. The message? Long hours and satisfied employees rarely mix.
Salary Watch
Other recent research studies confirm what management gurus have maintained for decades: as long as salary is in the general range for a particular role, most employees will not consider it the deciding factor in job satisfaction. So, check to see you are paying at an appropriate level. And consider creative salary options that align with the individual's own needs such as childcare, leave without pay, gym memberships and 'work from home' days.
Mentors
Partner inexperienced and experienced workers together so both can benefit from the other person's knowledge. "A mentor is someone who helps someone else learn something that he or she would have learned less productively, more slowly, or not at all if left alone," Davis said
Mentoring also dovetails nicely with the learning and training that younger staff members crave. Davis believes you need a learning culture to retain your best people. "Young people want to learn and they want training. They want to build their resumes—but this doesn’t necessarily mean that they will leave,” said Davis.
For many years now businesses have understood that there are major benefits in marketing their product proposition to customers rather than simply trading on price. The same is now true in the employment market. There are many reasons for changing jobs, but top of the list are job dissatisfaction and career progression, not pay as many employers may first assume. Employers need to become creative in the incentives they use to capture and retain staff. They must learn also how to create and market an added value employment proposition to their employees and prospective employees.
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