CAN YOU RETAIN YOUR TOP TALENT & SAVE MONEY?
Throughout the economic crisis (2007-2014), business felt a large degree of pain.
Consumer and business confidence fell sharply, and as a result, businesses were generating less turnover, which led to our economy contracting for a period of 7 years.
With business and economic growth on the downward trend, so did the size of many employee bases and the threat of redundancy loomed for many employees. This generated a shift in the employee’s priorities away from pay and reward, towards job security and as a result staff turnover decreased. At the same-time, departmental budgets were cut, and this was not any different for HR and Reward.
As a result, HR and Reward Managers were being challenged to improve their benefits offering with less, which led to a rise in flexible benefits and salary sacrifice arrangements.
Now, these downward trends are being reversed. Consumer and business confidence is increasing and as a result, more and more businesses are recruiting for additional skilled talent to fuel ambitious growth plans. By virtue of this, employees are being tempted away from their existing employer for better pay and benefit packages, and as a result we’ve seen an increase in staff turnover by almost 4% over the last year (CIPD Resourcing & Talent Management Report 2015). It is anticipated that this trend is set to continue and the rate of staff turnover will increase further.
Challenges for HR and Reward Managers
It has been reported that more than three-quarters of employers have experienced challenges in retaining staff over the last-year, with the vast majority of employees citing improved pay and benefits as the reason for leaving (CIPD Resourcing & Talent Management Report 2015).
This is despite continued efforts from HR to develop the overall employee value proposition (seeking to move the conversation away from just money).
However, whilst increased pay and benefits has been the core reason for employees moving employer, many businesses have been slow to respond to this increasing trend remaining with recession-like pay and reward budgets. This means that HR and Reward Managers are under pressure to vastly improve overall benefits packages, but do not necessarily have the budget to do so.
The approximate cost of replacing an employee is £2,000 per hire, therefore for every employee that leaves, your budget is £2,000 worse-off. With staff turnover expected to increase another 4% to pre-recession level of 17% within a year, this means that for every 1,000 employees and if 17% of these left in the next-year, the cost of replacing these employees totals £340,000 ignoring training and business disruption costs.
Notwithstanding the pressure of organisational and departmental budgets, this can also place a huge pressure on your time and increase the scrutiny of your reward offering from your Senior Leadership Team or Board. With very little budget and little time, this puts you under a significant amount of pressure.
How we are working with our customers
We are working with our customers to improve the value of their benefits offering by introducing an all-employee Car Scheme that combines Car Salary Sacrifice, Personal Leasing and Outright Purchase. This scheme has been designed around the complex and varied needs of your ever-diversifying workforce, yet delivered through one-single supplier and portal, and is cost-neutral to the employer and even has the potential to generate savings for your business.
It has been proven that employees that have opted for a salary sacrifice car benefit in the past 12 months are 5-8% less-likely to leave their employer, and have an average tenure of 7 years, demonstrating the ability of this benefit to address these challenges.
Many employers have heard of car salary sacrifice schemes, but are not aware of their structure or benefits. In addition to this, our customers have had challenges in building a business case in order to gain Board-level approval for the implementation of the scheme. We are unique in our ability to support our customers in building this business-case, via a piece of work that we call our “Something for Everyone Proof of Concept”.
We offer this service free of charge - Contact us today for more information on 0343 351 9034.