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Pay InvoiceBusiness Voice: December 2010
Employer of Choice: Secrets of the Total Compensation Package
(download the pdf)
by Lynne Wells
These days, many employees don’t live to work. They work to live.
The idea of work/life balance is often visualized as a scale with equal amounts of living and working resulting in the optimal balance, the implication being that if you wish to increase one you need to decrease the other. This model may need to be re-visualized as a beaker where professional and personal passions, interests and objectives are blended together. Work or professional pursuits need not be the enemy of having a life.However, employers have to view the labour market as a market that they are selling into rather than buying from and like consumer markets realize that if they want the time, efforts and ideas of their staff they are competing against all other uses of that time, effort and creativity.
Money is the base mode of exchange for transactions in the labour market but increasingly it has not proven to be a very effective incentive in the long run. Increasingly what people are looking for can be found on the blended portion of the job offering with greater concentration on working relationships, social value of the work, and ability to make a difference becoming the real competitive advantage for employers assuming of course that. Luckily these are the things that are easier for small businesses to offer than for larger businesses and can help level the playing field in an competitive labour market.
If employers want to stay competitive, they need to recruit and retain the best people in the right jobs, working to their fullest potential. In order to get what you need, you have to give employees not only what they need, but also what they want. More and more, that means going beyond a paycheque and a benefits package that only meets the standards mandatory by law. Employers have to engage employees – make them want to leap out of bed ready to enjoy the work ahead.
Employee engagement is a measure of workers’ willingness and ability to provide discretionary effort on the job. An engaged employee is one who’s fully involved in and enthusiastic about their work, and who will act in a way that goes above and beyond the call of duty, so to speak.
A great many experienced employees, either directly or indirectly impacted by layoffs, cutbacks, wage reductions and other cost savings mechanisms over the past two decades, are no longer willing to slog through long hours at a job where employee loyalty isn’t rewarded and an outsized paycheque isn’t always enough to overcome their cynicism. They want to be rewarded, supported, valued and challenged.
The new generation of workers, sometimes referred to as the “Y” generation, have a strong sense of entitlement. They believe they can have it all, both personally and professionally. They want the best, they think they deserve it and they think they can have it.
So, how do employers establish a reputation as an “employer of choice” in order to attract, and keep, the best talent available? How do employers engage employees? How do small and medium-sized businesses, with shallower pockets compete for employees of choice?
Tough Lessons: Minimum Wage in an Employer of Choice World
While it is nice to live in the theoretical world of highly paid, high-value-adding creative professionals, this is certainly not the case for all businesses. Where there isn’t a shortage of appropriately skilled labour, minimum wage acts as a backstop to protect those who find themselves in low paying work and at the mercy of an unfriendly labour market. But this is social policy and interferes in an increasingly efficient market. Not all industries have business models where high wage rates are acceptable or appropriate.
The tough lessons:
- If you are making minimum wage and want more then you need to get more productive or get into a different business. Either way skill upgrading is probably in your future.
- If you are paying minimum wage and can’t afford to pay more you are stuck, but now the shoe is on the other foot – if increasing prices is not an option you need to increase the productivity of your workforce, probably through skills upgrading or technology integration, or find a different labour market to draw from.
Part 1: Why do we need to attract and retain the best?
Human capital - people strength - is widely recognized as a key element in a successful business. The right people in the right positions with the right skills equals success.
Eddie LeMoine, of Eddie LeMoine Consulting, a local company that provides executive coaching, employee engagement workshops and motivational keynote addresses, says a crisis is looming for companies and employers as the current generation of baby boomers retires.
“One thousand Canadians a day are turning 60,” he says. “Companies that can attract and retain staff will survive. And retaining good people is all about developing them.”
With baby boomers at the tail end of their careers and hard-toplease Generation X and Y workers taking over, employers are having to compete more and more with each other to attract top-notch people because the talent pool is getting smaller due to downsizing in Canada’s demographics.
In Canada, skilled workers are at an all-time premium and some industries, such as construction and transportation, are experiencing a labour crunch. The so-called brain drain to the United States is also cause for concern, with demands for technically adept employees at an all-time high as our knowledge-based economy grows.
Employers know they need skilled employees, but how to get them and keep them is the issue. The first step is to understand what employees need and what they want.
Tips for becoming an employer of choice
To create a corporate brand that stands out in the minds of future and current employees, follow these steps:
1. Understand your business objectives. Know where you’re going and how you’re going to get there, so that you can…
2. Identify your talent needs and the “perfect” employee.
3. Clearly communicate expectations.
4. Recognize a desire for work-life balance. Be flexible.
5. Foster career development.
6. Upgrade your employee benefits package beyond the mandatory to include things such as registered savings plans, tuition-payment plans, stress management, fitness and nutrition programs.
7. Foster a social contract. Build employee loyalty with your own social practices of fairness, compassion and trust.
8. Foster a friendly work environment where positive feedback is common where managers are trusted.
9. Create customized work experiences to fully draw upon people’s potential. Help them help you.
10. Promote the company to employees as aggressively as you promote your products and services to customers.
Part 2: The new employment contract...
What are employees looking for?
The latest statistics state that employees spend at least half of their week at work, communicating with work or on their way to and from work. That doesn’t include the so-called “off hours” spent on brainstorming, networking, continuing education or personal grooming required for a professional appearance. With that kind of time investment, no wonder people want to improve the quality of their work life.
But with work hours on the rise, statistics also show that job-related stress is on the rise, as is job burnout. Dr. Michael Leiter is the founder and director of Acadia University’s Centre of Organizational Research and Development (COR&D) and a Canada Research Chair in Occupational Health and Wellbeing. Leiter is a world-renowned researcher on employee engagement and its flip side, employee burnout. Due to his work, a vast number of researchers now acknowledge work engagement as the ultimate target when improving the quality of work life. Leiter’s work shows that a huge paycheque and astronomical bonuses aren’t the magic formulas for improved quality of work life. He says what’s more important is a friendly workplace, a respected company image, flexible working hours, a safe community with easy access to environment and artistic pursuits, and opportunities for career advancement are just some of the non- monetary benefits employees are looking for today.
Employees have dreams, goals, challenges and responsibilities, and they see their careers as a means of achieving these things. An employer of choice recognizes, understands, respects and assists an employee with these things.
“We need to start moving away from the idea that developing people is some sort of option or add-on,” says Karen Kelloway, a consultant with Knightsbridge Robertson Surrette. “People development must become part of how we do business. What is the employee good at, interested in, passionate about, and how does this fit into our organization’s success?”
ISL Web Marketing andDevelopment
This Halifax-based technology company knows the value of retaining knowledgeable and experienced staff. Listed as one of the top 30 Best Places to Work in Progress Magazine’s 2010 Best Places to Work Report, ISL puts its people first. Company President Malcolm Fraser says all projects are undertaken with the understanding that his 30 people won’t be worked to death. Employees are responsible for completing assignments and doing them well, but when they do the work is up to them. Fraser says life happens and knowing they can manage their schedule to meet both professional and personal commitments means his staff are happy and they stay, and that enhances the company’sability to meet customers’ needs.
Premiere Executive Suites
Halifax-based Premiere Executive Suites started bringing its housekeeping staff together for daily morning meetings to increase two-way communication and to foster a greater sense of engagement. Company President Suzanne Bachur says staff now look forward to these meetings because they make them feel more connected to the company. Also listed as one of the top 30
Best Places to Work in Progress Magazine’s 2010 Best Places to Work Report, Premiere Executive Suites offers telecommuting and job-sharing options to staff, and promotes community involvement. The result: happy staff that stay, reducing recruiting costs for the firm and increasing the company’s overall experience assets.
Part 3: How to become an employer of choice
Before your company can stand head and shoulders above the competition, you must at least be on the same playing field in terms of wage and benefits packages. Market rates must be at least equal to if not better than what the competition is offering.
Employer branding, a recruitment and retention tactic now considered one of the hottest HR strategies going, markets your company to current and potential employees, making your organization stand out from the crowd.
Look around, evaluate your company and your workplace, and survey your workforce. Where do you stand? Employees want to like the company they work for. They want to be able to say, “I love my job.” They’ll work with you toward making that happen. Make your company one where people want to come to work, not one where they have to come to work. There’s a tremendous difference in workers who work with passion and ones who are just putting in time.
Make a commitment to improve the partnership between the company and its employees. That means learning and understanding what they need and want, and then providing it wherever and whenever possible. Flexibility is likely to be your greatest strength here.
The top of the pyramid, culture and workplace, are the factors that will engage employees, get them excited and working to their fullest potential.
- Culture: cool factor, company image and reputation.
- Workplace: organizational structure, reporting, reviews, and overall “feels” of the place. Is it friendly?
- Location: While location isn’t always an issue, for some the surrounding community and physical location can rank between benefits and the workplace. For some it could make or break accepting a promotion or a job offer. This factor is a wildcard.
- Total Compensation Package: the tangibles a company can offer, including:
- Benefits: group health and dental plans, continuing education, flex time, free parking.
- Money and wages: bottom line paycheque, performance bonuses, sales commissions.
- Safety and security issues: I want to be physically safe from injury/disease/crime in my work.
Part 4: Halifax as part of your package
Halifax is a great place to live, work and play for singles, working couples, young families, empty nesters and retirees. The urban amenities, combined with the clean and green environment, located within a relatively small geographic area is a great selling point with not just employees, but also their families.
LeMoine is optimistic about the prospects for Atlantic Canada, and Nova Scotia in particular.
“People used to leave the province because they had to. They’re now coming here for the lifestyle. They can see the area has a lot to offer and they want to raise their children here.” Halifax is urban, but small enough to keep commute times to a minimum and its crime rate is relatively low. It’s also the arts centre of Atlantic Canada, with art galleries, concert venues and theatres open year round. In fact, Halifax is the regional centre for many things, including:
- medicine (for both adults and children);
- retail (with end in sight to the growth of big box, smaller chain and boutique outlets);
- ethnic diversity; and
- post-secondary education.
Halifax offers urban attractions, and yet the great outdoors (and Nova Scotia has a great outdoors!) is just minutes away. City dwellers can be in cottage country in less half an hour.
Part 5: What’s the payback?
Numerous studies have been done with results showing that companies with engaged employees see improvements to their bottom line. There’s less employee turnover, greater knowledge and experience assets accrued within the company, sick leave and general absenteeism is reduced, productivity and creative problem solving is increased.
People that are actively engaged at work help move the organization forward with 88 per cent of highly engaged employees believing they can positively impact the quality of their organization’s products, compared with only 38 per cent of the disengaged.
At MolsonCoors, it was found that engaged employees were five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost-time safety incident. In fact, the average cost of a safety incident for an engaged employee was $63, compared with an average of $392 for a non-engaged employee. Consequently, through strengthening employee engagement, the company saved $1,721,760 in safety costs in 2002.
88% of highly engaged employees believe they can positively impact the quality of their organization’s products.
What do you look for in a job?
- “My Dad told me when I was 11 years old, ‘Find out what you love to do and then convince people to pay you to do it.’ I’ve always been lucky enough to be able to do that.” - Belinda Ferguson, owner/instructor, Belindance
- “An understanding boss, a good benefits package and good people around me. It’s not the building that you look after that makes or breaks a job, it’s the people who also work in the building with you. I’m fortunate to have all the things I need.” - Darren Jollimore, Custodian
- “My day job has flexible hours that allow me to do my dream job, which is writing books. My employer understands my dream and is open to my needs. That’s what working artists need.” - Steve Vernon, author,Halifax Haunts
- “I want to wake up in the morning and be happy to go to work. I want to be excited to get the day underway, and I have that with my job.” - Terri Lynn Fancy, elementary school librarian
Part 6: Employees as customers
A company’s employees are its most valuable assets and, like a happy customer, a happy employee will talk up the company and can do a lot of free marketing. Establishing and nurturing this two-way loyalty conduit takes work.
Companies committed to engaging employees clearly state all expectations at all levels. There shouldn’t be any room for doubt in anyone’s mind, from the company CEO to the courier firm the company uses. Everybody knows what needs to be done, when and by whom.
As much as the company talks, it also listens and learns from its employees. Two-way loyalty means two-way conversations. Plug away at that employment brand. Develop it with the help of employees so that it fits the company and its workforce. Promote it everywhere. Put it on the job page on your company website. Put it up on internal job boards and employee recognition boards. Make it part of performance reviews, job interviews and trade show appearances. Plaster it on business cards, newsletters and office stationary. Make it part of safety committee meetings and annual report meetings.
Younger vs. Older employees’ needs
All age groups are interested in job security and connectivity to people.
Traditionalist (age 55-65)
- Characteristics: strong work ethic; loyal; high priority on job security.
- Salary: wants early retirement incentives and may contract back to the company in retirement.
- Position/promotion: likely to be senior and looking more at retirement than promotion.
- Pension: plans in place; concerned about retirement income and investment security.
Middle Boomer (age 45-55)
- Characteristics: lagging in hands-on skills; short of funds (often downsized, late savers).
- Salary: will press more due to cash needs, but is still the highest paid segment of the workforce.
- Position/promotion: don’t want added responsibility without more money; lots of management experience; thankful to delegate to others with more hands-on skills.
- Pension: concerned about maximizing pension; saving outside pension and investment performance.
Generation X (age 35-45)
- Characteristics: survivalists and entrepreneurs; cynical about corporate culture.
- Salary: will move quickly to better opportunities or self-employment; very interested in life experience as well as money.
- Position/promotion: skeptical about corporate ladder or that they’ll ever receive CPP funds; builds skill sets with each job, so they’re ready to move on.
- Pension: becoming an issue.
Generation Y (age 25-35)
- Characteristics: late entrants to the workforce (age 25+) with positive attitude, but hard to satisfy. The only generation to grow up with computers.
- Salary: dependent to a later age on parents; not afraid to move to better benefits; more flexibility; greater promotional opportunity.
- Position/promotion: not always driven by necessities of early home and family; ambition
- tempered by longer time as a single.
- Pension: not an issue yet, as they generally aren’t financially responsible for anyone but themselves.
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