When Jordan, a twenty-something business grad, began combing Toronto's financial district for a new job opportunity, he had a good sense of what he was looking for a company that was reputable, did great work and offered a decent salary. Though he found what he was looking for, it wasn't long before he realized he needed something that offered more than the opportunity to check off the boxes for what's considered success on Bay Street.
"You see [the people you work with] way more than you see your family," he says. "Pretty much all your weekday hours are devoted to them. You want to know that you mean something to these people; that you're not just a number."
So what was it Jordan was missing? "I expected a lot more support, guidance and feedback."
But is the Toronto native the exception, the rule or a glimmer of a future norm? With Canada's labour shortage looking like its going to get worse before it gets better, employers and their human resources counsellors are desperately trying to answer the question: How do I keep my employees happy and professionally monogamous? What do employees want?
For years, HR pros have been proselytizing to employers the mantra that today's workers want and need more than just a handsome remuneration package to keep them from professional promiscuity. Their counsel has been that retention is directly related to intangible benefits such as: a positive working environment, work-life balance, access to and communication with senior leadership, strong community values, genuine corporate social responsibility and a focus on health and wellness.
Yet recent and even not-so-recent data suggest that when it comes to giving employees perma-smile, monetary benefits still rule the roost. A Towers Watson study conducted in 2010 showed that for three consecutive years, competitive base pay, vacation time and healthcare benefits were the top "attraction drivers" among Canadian workers.
"I think we all agree that it needs to be about more than pay, but what employees see every week is their base salary," says Ofelia Isabel, director of talent and rewards at Towers Watson.
But courting top staff with promises of better pay is more complex than one might imagine, and possibly dangerous. Pay needs to be more than just competitive, it needs to be fair. Staff need to feel they're being appropriately compensated based on their dedication and output rather than just their position title or pay grade.
"If I'm increasingly willing to go the extra mile and do extra work, and my colleague comes in and works from nine to five, that needs to be recognized," says Ms. Isabel.
To this end, many organizations are opting to implement various forms of employee incentive programs. Rather than just offer annual bonuses or merit-based salary increases, employers are looking for more creative ways to provide a monetary value-add to staff in the form of employee rewards. So, what's the best kind of reward an employee can get?
"Money. Very simply - money," says David Eason, CEO of Berkeley Payment Solutions which helps companies identify, develop and administer employee incentive programs. "What people want is flexibility and choice."
So why do companies bother with employee incentive programs? Put simply, those programs make staff feel special. They provide monetary value that is not only a form of recognition for a job well done, but that also offers experiential value.
"Typically [one-time cash bonuses] get consumed by day-to-day, cost-of-living things, and there isn't any extra visible value; you lose the trophy value," says Mr. Eason noting that employees will place greater value on using a pre-paid credit card or gift card to take a spouse out to dinner than to simply have that money absorbed into their regular pay cycles.
In the company's Canadian Incentive Trends study released last month, the incentive valued most by employees was pre-paid credit cards (preferred by 38% of staff), followed by retail gift cards (22%) and travel rewards (14%). When employers were asked why they chose to use pre-paid credit cards as employee incentives, 59% noted the cards' flexibility and mass appeal. It turns out that most people like money.
But using money alone as a retention tool is a slippery slope, as Ms. Isabel notes: "What we've seen in Alberta is you can always pay someone more, but it's only a matter of time before someone else steps up and pays [even] more. It becomes very expensive."
In addition, monetary incentives (versus actual money) won't necessarily appeal to everyone the same way. While salary ranks highest among all age groups. The Towers Watson study notes that paid vacation time is ranked third by Gen Y and young Boomers but ranked second by Gen X and older Boomers. Moreover, Gen Y ranks career advancement opportunities second only to base pay while ranking health benefits sixth.
Then there's the murky issue of job security. Though it hasn't really existed for the better part of 30 years, most Canadians still aspire to attain it. Randstad's latest Global Workmonitor shows 40% of Canadian employees are willing to take a pay cut if it means getting job security. And that's not the only thing for which they're willing to take a pay cut.
Jordan, the young financial services worker described at the top of this story, says he's willing to trade in cash for a more guidance, feedback and career development opportunities.
"Whatever job I go to next, it will definitely pay less money, but I think I'll be happier in my career and it will get me to a better place," he says.
That means workers - and young workers in particular - are beginning to place monetary value on what were previously considered intangibles - all those warm and fuzzy things that HR professionals have been talking about for years. If cash is still king but employees are now seeing monetary value in workplace conditions and incentives that previously were not monetarily defined, then employers need do only one thing; define them.
"I do think employers could do a much better job of not keeping that stuff a secret," says Ms. Isabel. "Quantifying it, articulating it, making sure it's woven into your fabric."
Indeed, when a company shows employees how much it spends on them for their parking allowances, benefits plans, pension plans, professional development et al, the number associated with their total compensation suddenly becomes much more impressive to them.
Still, even those companies that can provide the elements and incentives that employees desire most and do a good job of quantifying them will, to some extent, face an uphill battle when it comes to retention. The reality is that the future workforce (i.e. Millenials) are the least professionally monogamous of all age groups and the most likely to follow opportunities as they arise. That means employers will need to make recruitment and retention strategies and funding a bigger part of their annual plans, and may need to see high turnover as an integral condition of doing business in Canada.
Careers & HR
This article appeared in the Financial Post on July 6, 2012