Salary increases are important, but strong leadership will also help employers retain staff.
By Angie Cui
Motivating and engaging staff are key factors in retaining the best talent. However, the foosball tables and colourful murals in hipster workplaces only go so far in creating a workplace where people want to stay. Salary is a major factor, but how important are dollars when it comes to retaining talent?
According to a survey of 4800 Australians by Seek, 24 per cent of employees said they should automatically receive a pay rise – no matter how they have been performing.
Another 26 per cent said they will only earn a pay rise if they perform well, and 13 per cent reported that they have to ask for an increase.
A 2017 Australian Bureau of Statistics study found that 23 per cent of men and 19 per cent of women said the main reason they left their job was for a better position or conditions.
Developing strong leadership
According to Nicole Gorton, Asia Pacific director of strategic accounts at recruiter Robert Half, a salary increase isn’t a long-term solution to staff retention.
“Increasing salaries … should not come at the expense of developing strong leadership, managing workloads, cultivating a positive work–life balance, creating positive team cohesion, and helping an employee to progress their career,” she says.
“Our research suggests that almost two-thirds [62 per cent] of Australian employees say non-salary benefits have become more important to them than base salary when considering a job offer, highlighting the need for employers to look beyond salary when tailoring remuneration.”
This is echoed by Alan Lim FCPA, assistant director finance business partnering of the National Disability Insurance Agency.
He argues that using money to motivate employees can work against the employer because “the motivation does not last and is costly”.
Lim says it’s vital to share the vision of the company with staff, so they understand the bigger picture.
“Create a great working environment, recognise employees for their accomplishments, and inculcate team spirit,” he says.
How to motivate your workforce
If salary isn’t the key factor, what else can be done to ensure your staff stay?
1. Create a positive and respectful working environment
Bad management can result in a lack of respect, honesty, support and communication. The old adage rings true: “People don’t leave bad jobs, they leave bad managers”.
According to Renee Russo, principal consultant of recruiter Lawson Delaney, successful employers will have “a culture that is engaging, open and transparent and is a key motivator”.
2. Offer meaningful employee rewards
Louise Watts, founder of coaching and professional development firm Transition Hub, says that employee engagement is paramount.
“People want transparency and for promises to be fulfilled if they achieve the milestones set out for them. Culture and engagement are a must, and if the business does well, people should be rewarded,” she says.
Gorton agrees and cites company-wide discounts on fitness memberships, salary packaging healthcare, or even offering novated car leases, as possible rewards.
“Or the provision of professional development opportunities, which allow an employee to pursue career goals and develop their skills,” she adds.
3. Give staff room to grow
Consider determining tailored individual development plans for each staff member. Mark Davis, founder of recruiter Hamilton York, provides an example.
“For example, if a partner is going out to see a client to do a business valuation, then they should consider inviting a junior accountant.”
He says both parties benefit. The junior accountant gets the opportunity to break their day by visiting clients and feels empowered and trusted. At the same time, the more senior partner can observe and create relationships with staff, while perhaps being offered a new perspective on business issues.
4. Offer flexible scheduling
With technology enabling constant connectivity across teams, flexible working options can attract talent.
Gorton says the most popular benefits employees want revolve around work–life balance. Initiatives such as flexible working, telecommuting, or working from home have become increasingly popular.
What do experts expect for salaries in 2020?
Lim: “Expect a 3 per cent increase for 2020 similar to 2019.”
Russo: “We are seeing salaries vary depending on the individual. If you are strategic, innovative and have strong soft skills, you can negotiate a higher salary. This will continue into 2020.”
Watts: “I don’t expect to see big salary increases over the next three to five years while so much transformation is taking place. People are well advised to become more independent with their learning and development, more proactive in managing their career, to benchmark their skills to remain competitive in the market, and learn how to take their skills into a broader array of industries.”
Gorton: “The cost of living in Australia is on the rise, wage growth continues to be stagnant and is expected to remain so in 2020, and the economic climate is uncertain, so employees are understandably concerned about their remuneration.”
Money really isn’t everything. At a time of economic uncertainty, employers should consider offering those non-financial benefits and means of motivating and engaging employees.