Over the weekend I read a few articles about Bluescope Steel move regarding their plan to cut 1000 jobs. What grabbed my attention was the number of companies seizing the opportunity to source talent and offering different plans for the Illawarra workers.

According to the Illawarra Mercury, Bluescope plans to open a job centre to help workers find work elsewhere and more than 20 companies such as Rio Tinto, Joy Mining, Becker, Rheem and BHP Billiton have registered with hundreds of job vacancies.

Great outlet to assist these companies with the national skills shortage they face, so the bids to attract employees have commenced. Companies have to look at their offers if they want to attract this group of highly skilled employees who have also been classed among the safest workers in the country.

In my view, considerations to ensure these skilled workers choose the right company to work for should take into account not only commissions, bonuses and compensation but also non-cash incentives to attract and retain the new talent they are about to hire.

On the one hand, compensation packages allow employees to live – buy a house, pay the bills, maintain life, manage chores, go on a holiday, etc. That’s what a salary does and these employees will look at these facts with a transactional and functional approach. They will do some calculations when they evaluate a compensation system and compare the money to the work and their needs. No emotions involved, it’s cold, hard, transactional and impersonal. They will value your offer and match it to how much is worth to them.

Employees will face decisions and weigh up opportunities. They may have to move interstate, be away from their families for a period, reassess and look into their mortgages, retirement and other issues that need their attention. In this turmoil, neither companies nor employees should see this as a life rope being thrown to rescue their unemployment situation. Employees are skilled, savvy and confident. They know the mining industry will be after their talent and their decision to choose a company to work for won’t be done in a faint hearted manner.

The bigger question for the Employers is how to attract and keep skilled workers?

Whilst employees will work out the maths and see how the salary offers stack up against new employment opportunities, there are other factors and benefits that they will also be weighing up and mining companies must consider these when putting together their strategies. For an employee there is much more than just a salary when choosing an organisation to work for. They will also look at the emotional, non-transactional connections they can have with a new employer. They will look at factors beyond money – motives that address more than their basic salary needs but rather consider their individual and family goals and personal life matters. Mining companies need to find ways to drive their attractiveness with non-cash incentives, rewards, recognition and community programs that create an emotional, social relationship with potential employees and their families.

It’s hard to do the maths in your head to measure what a reward and recognition program is worth in monetary terms. Measuring how valuable perks are is difficult. For example, how much is it worth to have access to negotiated discounts on a wide range of products simply by being an employee of a company? What’s the worth of attending a company’s employee recognition ‘event’ every year? What is the true worth of an all-expenses-paid weekend-away for you and your partner, for simply changing a behaviour that improved safety? How would company A, that doesn’t offer a recognition program, stack up against company B that offers a program that rewards it’s employees for their loyalty, engagement and achievements? How about rewards for completing training? – The cost of any recognition program is cheaper when you compare it to the true cost that lack of skills, poor retention or low employee loyalty/engagement create for these companies.

Companies across the board mining or not should not confuse compensation with connection as these programs add value, create a sense of community and deeply connect with employees’ behaviour and emotions.

It would be narrow minded to think a salary package alone will entice skilled employees to choose a company. The truth is there are many different motives that will influence the Illawarra workers when they choose their next employer and the fact is they will be looking at the total package not just the salary.

Todays businesses are facing a real skills shortage and it seems business owners are throwing more money at them to keep them at work. Many business owners think employees decide to leave because they’ve been offered more money next door. However, the reason for leaving for most employees is that the working conditions are not right for them.

Managers have to be very clear as to what keeps an employee engaged at work and many think that employees are after more money in order to continue performing. Whilst money is their lifeline, hence a key driver of engagement, employees leave work for many other reasons.

Leadership, purpose, reward, opportunity, relationships, job fulfilment and work-life balance are above money. Managers should not assume that money motivates their employees. Everyone’s motivated by different drivers and when talking to your staff you will realise money is at the bottom end of why they work or why they want to leave your company.

Employee satisfaction is an important strategic initiative that ensures staff is motivated and engaged. And in this mix it is crucial to keep perspective of how each element operates.

Two key elements that I often find keep employees focused and engaged are leadership and reward. Leadership has proven to be a key factor in successful organisations. It fosters an environment of purpose, accomplishment and satisfaction through the aid and support of others in the accomplishment of a common task. In this case you can read: achieving your business objectives.

On the other hand, rewards. They are satisfying, gratifying and offer value to the individual’s sense of accomplishment. So I would say that a good combination of leadership and rewards give businesses an edge where both parties win, managers maximise engagement and employees continue thriving at their workplace.

Two recent surveys have shown salary is no longer the key motivation to attract and retain staff; companies now need to show why someone should want to work at their company and how their contribution will make a difference.

Brisbane HR consulting firm Astor Levin conducted an employee satisfaction survey with over a thousand respondents across many industry sectors and company sizes right across Australia.

71% of those surveyed were satisfied with the organisation overall but 40% were planning to look for work elsewhere in the next six months. Nearly half felt there were better career opportunities outside their current employer. Only 26% of respondents reported their primary motivation as pay. Factors such as good leadership, work life balance and career advancement are key drivers for over 50% of employees.

Another survey, from recruiting firm final5 found that 48.5% of their respondents claimed they would leave or quit their job in the New Year. Those aged 18-34 were significantly more likely to leave their jobs (60%) than those aged 35-54 (44%). Of those wanting to leave only 19% sited more money with 25% seeking further career advancement or time for a change as their primary reasons for moving on.

Employees want to make a difference with 73% agreeing that it is important to feel like they are making a difference. 81% also said they would consider working for a not-for-profit organization with the main drivers being feeling like they are contributing to society and a belief in the cause.

Results from these surveys highlight that;

• Companies will need to be more creative in attracting and retaining employees and even if a company is able to attract the right people to work for it, retaining those people will be a challenge as their motivation is more than just money.

• Generation X and Y are more likely to move more frequently and are rejecting the old “job for life” concept.

• Bosses need to show employees how their contribution is making a difference to the company so the employee feels valued in their work.

With Australian unemployment hovering near a 30-odd year low of 4.3%, employees are in a strong position to pick and choose.

A fun working environment which values risk-taking and innovation is more likely to keep staff from wavering. The key is the corporate culture and by changing the behaviour of employees and rewarding and communicating these efforts ensures it is a win win situation for both the employee and the employer.

Companies with a structured incentive strategy outperform companies without this planned approach.

Often I am asked when presenting to potential clients who have not previously used incentives to give examples of how other companies are using them. I recently found this case study on CEO Online and it gives a great example of how a simple but effective incentive program has been successful in employee retention.

In a tight employment market, a gas distribution business, Supagas has kept turnover among typically transient staff to 5% a year using incentives and it has helped the company grow at 12–15% annually for the past five years.

The employees are semi-skilled and are mainly factory workers, truck drivers or office staff. The CEO acknowledges it is hard word keeping the 100+ workers motivated in what are undeniably repetitive jobs. The company has developed several strategies for motivating staff.

The first strategy is tying in the level of performance to all staff members. For every bottle of gas delivered each month, 50¢ per bottle goes into a pool that is distributed among full-time permanent staff. So everybody has an interest in moving as many gas bottles as possible – and staying on for the monthly payout. Each eligible staff member receives a bonus payment of $250–300 per month.

Supagas has invested in a long service incentive and as their industry is transient, they have defined long service as two years. Each year employees who have been with the company for more than two years are flown to a luxury resort, with their partners for the weekend. They are treated to welcome drinks and dinner and a group activity. For the rest of the time, employees are free to do as they please. The CEO says it allows her to meet with drivers and other staff who she can’t see every day.

Their third strategy aims to keep reminding staff – and their families – that they are valued. The annual Christmas party is for employees and their families. The venue is usually a park with a marquee and lots of food and drink. A jumping castle and face painting are organized for the children. Managers at the depots also periodically treat staff by ordering in pizzas or buying drinks on a Friday afternoon.

Survey results in November’s ‘Boss’ the magazine of The Australian Financial Review found that emphasis on the work / life balance is playing an important role when deciding on a new employer.

67% of respondents said that if they had multiple job offers they wouldn’t necessarily choose the one with the highest remuneration but would consider whether the work is more meaningful, the team atmosphere seems livelier and the hours are more flexible.

A further 53% of respondents would trade a pay rise for more flexibility.

The message is clear that it is not always necessary to beat your competitors with higher salaries to attract and retain staff. The less tangible conditions are more highly valued.

The survey respondents were mostly male between 25 to 44, working full time in IT, communications, media, banking and finance industries in a professional or manager’s role.

If not you may lose them to private companies that are.

An article in October’s Smart Company- Australia’s online magazine for entrepreneurs & SMEs reports that emerging skill shortage is now having such a dramatic effect on companies it has emerged as the chief executive’s biggest concern – even beating profit and growth.

Michael Page Technology Survey for 2007-08 has revealed that increased incentives are being offered to technology professionals as employers try to retain key staff.

The survey says recognising talent, investing in training programs and demonstrating career opportunities are powerful retention strategies in a tight labour market.

However most employers come up with a counter offer to stop staff from leaving and most are unsuccessful.  The annual Hayes Salary Survey found that 48% has given staff counter offers and despite this 30% left regardless of the offer and those who took up the offer 80% left the company within 12 months.

Incentives are a great way to boost employee benefits and at the same time increase work performance.

Angela Dillon, Managing Director of Ad Inc and Motive8’s parent company was recently interviewed about the use of incentives in employee retention. The interview has been published in the Career One Section of The Sunday Telegraph.

A recent article in the Sydney Morning Herald has found that ‘graduates and young employees are doing well from the national skills shortage’. Employers are offering graduates gifts and incentives to attract employees.

It seems that industry sectors are competing with each other in similar ways to attract new employees, a bit like keeping up with the Jones. By only concentrating on attraction strategies companies will still have the same transition issues.

Companies need to focus their point of difference which makes them stand apart from the other companies in order to attract and retain staff.

More thought should be paid to the long term strategy. What are the key drivers of the people employed within the company. Research what is relevant to them and tapping into this motivation will play an important part in employee retention.

A recent article in the Australian Financial Review (AFR) highlights the case in point of the problems faced in retaining staff in the workplace.

Medium sized Australian bank, BankWest, is about to begin an expansion program in the Australian banking and finance sector. BankWest, which is owned by the global banking/finance group HBOS, has been for the most part a West Australian state based entity. The group is planning to open branches and operation areas across the eastern seaboard states – Queensland, NSW and Victoria. To this end, the group needs to find 3,000 bank staff to accommodate their expansion plans.

In a climate in Australia of basically full employment, it is hard to find ANY staff on the streets capable of helping BankWest complete their plans. They will have to attract, entice or pinch these staff from the other Australian banks and financial entities.

I know from my contacts in this industry that the Australian banking/finance sector is looking long and hard at incentive programs to help them attract and retain staff and secure intellectual property.

Why Do Staff Leave,
An item by Brian Walker – The Retail Doctor – at Inside Retailing Magazine, makes for interesting reading. I have seen lists like this before, and as Brian points out, salary is down the list.

Studies and research I look at here reveal that cash, conditions, perks etc can get staff in the door, but keeping them there is a different story. A few items on Brian’s list point to Right Brain thinking – motivation, recognition, pride and passion – something we at Motive8 keep in mind when talking to people about Incentive Solutions and how a program at the workplace helps to retain (and attract) staff.

No argument about the first 2 items on the list though…if your management and leadership is poor there is only one thing to do.