At a glance:
- Global workforce shortages have put pressure on organisations to find new ways to attract and retain talent.
- As Executives re-think their priorities, businesses are having to rethink their talent strategies.
- Money is only half of the story and to attract and retain top talent organisations must get the other half right too.
Some unique factors are currently shaping the employment market, as organisations continue to recover from the pandemic and try to navigate the Great Re-Evaluation that ensued. Employers across many sectors and geographies now face significant labour shortages, coupled with unprecedented levels of staff turnover, as people rethink their priorities and challenge what they really want from their workplace and their employment.
“There’s a real talent attraction and retention challenge for organisations today, but money is only half of the story,” says Paul Howard, a Partner for Gerard Daniels. “To bring people into your business and keep them committed and engaged, you’ve got to pay them well. But to compete for talent you’ve also got to get the other 50% of your offering right.”
We invited Paul to explore why employers have to focus on attraction and retention strategies outside of the Total Remuneration Package (TRP), what executives really want, and how employers look set deliver on this in 2023.
Why do employers need to look beyond TPR?
In strong employee recruitment markets, the first hurdle is attracting the right people into the business.
“Money used to talk, but in recent years we’ve seen a shift away from money being the only thing that matters. Executives are looking for value in and beyond their TRP, and with market conditions like these they are in strong position to negotiate favourable terms for 2023,” Paul explains. “To secure new Executive and Non-Executive appointments and keep good people on board, you’ll need to have both competitive monetary and non-monetary offerings.”
A significant increase in poaching practices is another challenge that many employers are experiencing.
“With such a shortage of people, businesses have started turning to their competitors, even to key services providers, to try and lure people out,” says Paul. “Naturally this means people are being offered a lot of money to move on, but employers need to remember there will always be someone who can and is willing to pay more than you.”
“Your corporate values will be under intense scrutiny by all prospective employees. To keep good people, your employee value proposition has to extend beyond salary, and provide people with the culture, values and incentives that really matter,” Paul continues. “Attracting and retaining talent also requires a strong employer brand, and a reputation as employer of choice – criteria that become increasingly difficult to achieve the more choice that employees seem to have.”
What do executives want in 2023? How are employers delivering on this?
A recent Future Forum report reveals a noticeable decline in Executive sentiment and experience. In the 12 months leading up to August 2022:
- 40% of Executives reported higher stress and anxiety than the year prior
- There was a 20% decline in work-life balance
- And a 15% decline in satisfaction with working environment.
Not only are many Executives having new employment opportunities presented to them, but these figures indicate a growing sense of discontent in current roles, which will only fuel the desire to move on. To combat these issues and address talent shortages, many organisations are looking more broadly at their talent attraction and retention strategies.
“As well as providing increasingly attractive remuneration packages, incentives like access to coaching and mentoring programs, on-the-job learning and development opportunities are becoming baseline expectations for incoming, and existing Executive talent,” says Paul. “We are also seeing growing opportunities to contribute in a meaningful way to corporate (or individual) ESG commitments.”
Here are some other non-monetary incentives trends:
According to Paul, employers are putting much better conditions around paid parental leave, which can be an important driver for people at this particular stage in their life.
Workplace flexibility is another focus area, with flexibility becoming the norm rather than the exception. “To respond to growing demand for flexibility, employers are starting to formalise their remote and hybrid work strategies and procedures,” says Paul.
As part of The Great Reshuffle, employees are now more consciously choosing the types of roles they take on, and the types of organisations and environments they want to work in. “Employers are responding by investing in creating work environments that lure people in, and keep them there,” says Paul.
“Businesses, particularly in sectors like mining and resources, are throwing big money into new office facilities and remote work environments. Many are offering day care centres and gyms within their office complex. One Perth employer has provided in-house facilities like GP clinics, cafes and restaurants complete with chefs and baristas,” he continues. “All of these incentives are designed to make people want to come to work, stay at work, and ultimately to turn down other offers if they come along.”
Delivering on culture and values:
With employees firmly in the driving seat it has become even more important for organisations to create and maintain a positive organisational culture, and to live up to their espoused values.
“Before joining an organisation future employees want to know that there is strong alignment between their own values, particularly around issues like sustainability and diversity equity and inclusion, and the values that are promoted by prospective employers,” says Paul. “As well as communicating and reporting on these issues, employers have to walk the talk and demonstrate both their commitment and performance in these areas.”
Condensed working hours and days:
Another trend has emerged around condensing working hours and days. “KPIs make it clear what is expected of Executives, and if they meet and exceed these expectations it shouldn’t matter whether they take five working days or less to deliver on this,” says Paul.
“Successful four day work week trials around the world have consistently revealed gains in productivity, employee wellbeing, engagement, work-life balance, innovation and employee brand, making this incentive good for employees, and good for business too,” he continues. “Recent reports have also shown that some of the big tax firms are looking at and RDO system (1 day off a fortnight).”
Allowing employees to finish work early on Fridays is commonplace during the Summer months in Europe and some parts of North America, and Paul urges that employees in other parts of the world would quite like this opportunity too. “Incentives like these help employees to achieve better work life balance, they can actually improve productivity, and they go a long way in helping to attract and retain top talent too.”
Time to re-think your remuneration strategy? Connect with Paul, or talk to us today.