The nature of how we work has undergone significant transformations in recent years. Technological advancements, shifts in employee expectations, and the impact of global events have forced organisations across multiple industries to adapt. This environment has led to the emergence of modern work trends that are reshaping the employer-employee relationship.

Recently, Madeline Martin, the National Manager of Insurance and Wealth Management at Fuse Recruitment spoke at the AICLA/ANZIIF Conference on the critical importance of achieving a balance between employers and employees.

Understanding the Cost of Recruitment vs. Retention

A pivotal aspect of Madeline Martin’s presentation revolved around the cost implications of two core HR strategies: recruitment and retention.

Recruitment costs have been steadily rising due to talent shortages in many markets. Employers are confronted with numerous expenses when tasked to find and onboard new employees. These costs encompass tasks like posting job advertisements, conducting testing and background checks, or outsourcing recruitment efforts to agencies. The costs don’t stop there; onboarding new employees requires resources for training, orientation, equipping them with necessary tools and resources, and even accounting for the time spent before they reach full productivity in their roles.

The Case for Employee Retention

There is an often overlooked, but significant aspect of employee turnover. Madeline Martin told the AICLA/ANZIIF Conference when a client-facing employee departs, relationships with clients can be disrupted, leading to potential revenue losses. It’s estimated that the combined cost of these impacts on businesses can range from 50% to a staggering 200% of the departing employee’s salary.

Just this statistic alone proves why prioritising employee retention over frequent recruitment efforts should be a part of your employment strategy. While there may be instances where recruiting fresh talent is necessary, the data highlights that retaining existing employees is typically the more sustainable and cost-effective option.

Investing in Retention

Investing in employee retention involves creating and maintaining a work environment that not only attracts top talent but keeps them engaged, satisfied, and loyal. Factors such as a competitive Employee Value Proposition (EVP), comprehensive benefits, career development opportunities, and a positive workplace culture play pivotal roles in employee retention.

By emphasising employee retention, organisations can significantly reduce recruitment costs, lower employee turnover rates, and build a more stable and committed workforce. The funds that would have otherwise been allocated to the repetitive cycle of hiring and onboarding can be reinvested into other areas of the business, leading to increased profitability and a more harmonious balance between employers and employees.

Building a Compelling Employee Value Proposition (EVP)

An Employee Value Proposition (EVP) is a crucial element in the quest for effective employee retention. It represents the unique set of offerings that an employer provides to employees in exchange for their skills, dedication, and contributions to the organisation. A well-crafted EVP addresses a variety of factors that can significantly influence an employee’s decision to stay with the company. Here’s an in-depth look at the components of an EVP:

The definition of an Employee Value Proposition (EVP) is ‘the unique package of rewards and benefits that employers offer to their workforce in exchange for skills and dedication’. It’s the essence of what employees gain from their job beyond just a paycheque. This can include competitive salaries, flexible work arrangements, and career development opportunities that not only promote financial security but also create a healthy work-life balance and facilitate professional growth. A positive company culture, wellness initiatives, and recognition programs make employees feel valued and engaged, while corporate social responsibility efforts resonate with personal values. In a nutshell, the EVP is a win-win where employees receive much more than just a paycheque .

Benefits for Employers:

Madeline Martin also told AICLA/ANZIIF that for employers, a strong EVP is a magnet for top talent in a competitive job market. It keeps turnover low by making employees feel valued and part of a bigger picture. Engaged employees are more productive, innovative, and motivated, creating a positive work environment that encourages others around them. They’re also more likely to provide excellent customer service, boosting the organisation’s reputation and profitability. Ultimately, a well-crafted EVP fosters an atmosphere of success, where both employees and employers thrive.

Madeline Martin’s presentation introduced a range of actionable strategies for organisations to customise and expand their incentives, aligning them with their specific business needs and culture.

Here’s a closer look at these strategies:

Implementing Employee Assistance Programs (EAPs): EAPs are cost-effective and easy to introduce. They offer confidential support for employees dealing with personal and professional challenges, promoting mental well-being and work-life balance.

Leveraging Online Learning Platforms: Access to platforms like LinkedIn Learning and Udemy allows employees to continuously improve their skills and knowledge, fostering professional growth while enhancing their value to the organisation.

Prioritising Tenure Benefits and Recognition Programs: Recognising and rewarding employees for their long-term commitment cultivates loyalty and a sense of belonging within the company, reducing turnover and boosting morale.

Offering Family Support with Flexibility: Creating a family-friendly work environment with adaptable policies and support mechanisms not only helps employees balance their family and professional lives but also promotes a culture of inclusivity and care.

Flexible Work Hours: Implementing flexible start and finish times accommodates varying employee needs and schedules, improving work-life balance and job satisfaction.

Introducing Volunteer Leave Policies: Allowing employees to take time off for volunteer activities strengthens the company’s commitment to social responsibility and community engagement, aligning personal values with workplace values.

Implementing an Employee Referral Program: By encouraging employees to refer potential candidates, organisations tap into their network and reduce recruitment costs, while employees feel a sense of ownership in building the team.

Offering Annual Wellbeing Reimbursements: Providing reimbursements for wellbeing-related expenses like fitness equipment, wellness programs, or stress-reduction activities directly contributes to employee health and job satisfaction.

Providing Access to Online Shopping Platforms: Granting access to shopping platforms enhances employee perks, making it more convenient for them to access a wide range of products and services.

While the focus has primarily centered on the advantages for employees, employers also stand to gain substantially from a well-structured Employee Value Proposition (EVP) and these tailored incentives.

These strategies can lead to several benefits for the organisation:

Increased Employee Engagement: When employees feel supported and valued, their engagement levels rise. Engaged employees are more motivated and committed to their roles, leading to increased productivity and job satisfaction.

Higher Productivity and Performance: Engaged employees are more likely to meet or exceed performance expectations, leading to higher-quality work and better outcomes.

Enhanced Innovation and Creativity: Engaged employees are comfortable sharing ideas and taking calculated risks, driving process improvements and fostering a culture of innovation.

Improved Job Satisfaction and Workplace Culture: A robust EVP and tailored incentives contribute to a positive work environment, strengthening relationships among colleagues and encouraging teamwork and collaboration.

Superior Customer Service and Client Relationships: Engaged employees are more likely to provide exceptional customer service, resulting in higher customer satisfaction and loyalty.

A Healthier, More Productive Work Environment: Higher employee engagement has been linked to better mental and physical health outcomes, reducing stress-related issues and absenteeism.

Increased Profitability: Engaged employees drive company profitability and have a positive impact on the bottom line. By offering these benefits and incentives, employers enhance their workforce’s satisfaction, productivity, and loyalty, ultimately contributing to the organisation’s financial success.

Measuring Engagement and Refining Benefits:

Measuring and refining employee engagement is a critical step in creating a workplace that thrives. Tools like CultureAmp provide employers with the means to gauge the pulse of their workforce. Through surveys and feedback mechanisms, companies can directly tap into the sentiments and needs of their employees. This information is invaluable in identifying areas for improvement in organisational culture. With concrete data in hand, companies can pinpoint specific pain points and challenges, allowing them to address issues more effectively.

Additionally, this data serves as a catalyst for refining the benefits offered to employees. By understanding what matters most to their workforce, organisations can tailor their benefits packages to better suit their employees’ needs. It allows companies to swiftly address any emerging issues,

ensuring that employee concerns are met in a timely manner, and reinforcing the organisation’s commitment to its workforce.

Creating an Attraction Strategy:

One of the unexpected byproducts of focusing on retention and engagement is the development of a compelling attraction proposition. As organisations invest in building a robust Employee Value Proposition (EVP) and tailored incentives, they inadvertently establish themselves as highly desirable employers in the job market. Armed with a well-defined list of benefits and a highly engaged workforce, these companies are well-prepared to attract top talent in a fiercely competitive landscape.

By nurturing a work environment where employees feel valued and engaged, companies naturally become more attractive to potential hires. Candidates are drawn to organisations that are committed to their employees’ well-being, professional growth, and overall job satisfaction. With a market-leading EVP in place, businesses not only retain their existing talent but also consistently attract new talent, bolstering their recruitment efforts and reducing costs.

If you’d like a more in-depth discussion regarding modern workforce trends, you can book a time in Madeleine’s calendar here. Or, f you’re looking to build and retain your workforce, reach out to our specialised team today.