Staff retention and talent acquisition are key issues currently facing business leaders. A very low unemployment rate and an unsettled national workforce that, according to recent research, indicates an unusually high number of Australians changing jobs and taking time out from their careers, are contributors to a pressing and complex problem affecting business growth and success.
In this article, I explore the role of company policies, and specifically, how they may well be an undervalued ‘carrot’ when striving to attract and retain staff.
In February this year, NAB conducted research and revealed Australia may be about to experience an employment event similar to “The Great Resignation” that is currently affecting the United States. NAB’s survey  of 1200 participants (conducted between 25 November and 13 December 2021), indicated as many as one in five Australian workers changed jobs in the past year and one in four were considering leaving their workplaces or taking a career break.
The findings went on to suggest that after comparatively long-term low employee turnover, a change was afoot with many employees looking for a fresh start with a new employer and a new role. While the finger has been pointed directly at Covid, there are other reasons for employees wanting to move on and this provides employers with plenty of pause for thought, and an opportunity to rethink their staffing strategy for the future.
Among the reasons for changing jobs, NAB’s survey revealed lack of personal fulfilment, career growth opportunities and a perception of poor pay and benefits were among the main factors.
Like many modern businesses, my business partners and I also face the pressures of staff retention and attracting talented staff of all levels of experience. We are also very aware that we need to do this while balancing the books in terms of what can be significant direct and indirect costs of employment and the broad-ranging issues that accompany managing a workforce.
We too are exploring how to offer appropriate incentives for retaining and acquiring new staff, without creating unsustainable wage growth and all the problems that flow from that in the long term. While there are many motivators for employees, including personal fulfilment, career development and remuneration, in our experience, flexibility is becoming a crucial factor in the race for talent.
BUT flexibility in policies must only be granted within the regime of employment laws and regulations in Australia. Effective policies and procedures are the cornerstones that underpin flexibility and other benefits offered to staff. Such policies may be work from home or flexibility in time off or incentives based schemes or perks of employment such as bonus pools, lunches or gifts and so on.
And such policies provide the advantage of being varied more easily than individual employment contracts and industrial instruments. Policies can be used to manage employment relationships and they may also evolve and change over time to suit your employment landscape. Policies are often thought of as the stick approach that indicates what you can’t or mustn’t do in the workplace. However well considered and fair policies and procedures can also be a carrot. For example, in environments where fulfilment and reward for effort based remuneration are key motivators, employers can implement policies that consider a range of matters that balance incentivisation and attainability, while taking care not to over-promise staff opportunities.
Employee based bonuses, profit share opportunities and executive share/option schemes are common examples of policies that can be used both to incentivise and encourage positive and effective pro-business behaviour.
However, there are pitfalls. Policies should generally be separate from employee contracts otherwise, their legal status must be made clear as to whether they are enforceable contracts or promises (unless of course that is the intention). Any such policies should be ‘well designed’ and that involves preparing them in tandem with your legal advisor.
As a lawyer who has lived a career drafting employment contracts and policies, in my experience it’s often the process of determining the detail of those policies which proves most valuable to employers. There is much value in identifying the type of employees to whom the incentive is to be offered, their personalities and the possible risks, as well as the appropriateness of the incentive for them and their role.
Importantly, articulating the incentive and reward for achieving it, must be carefully detailed both to encourage the employee but without promising too much, too soon or placing yourself, as the employer, in a position that weds you to a commitment you are unable or unwilling to comply with in future. Motivating the right behaviours is a crucial consideration.
Get it right and you’ll enjoy strong staff retention, acquiring talent will be easier and you’ll generally enjoy higher staff morale. However, get it wrong and a staff exodus may be the result.
Executives and employers need to recognise that today’s staffing issues are complex, and for many business leaders, they’re different from the relatively low staff turnover environment of the past.
It’s time to read the room, and to properly understand what motivates your team, both to retain them and for the purpose of creating compelling reasons for attracting and engaging quality candidates to vacancies.
However, defining any incentives, the terms of employment and any other benefits must all be done within the letter of the law to make clear expectations, but equally, as an employer, to protect your rights.
As indicated here, policies provide opportunity for flexibility, which is a desirable benefit sought by employees, offering scope outside of the general rigidity of employment contracts.
The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.