Employee Retention - Don't let go of a good thing
Ensuring employees stay loyal during turbulent times can
be a challenge. Sue Weir, chief executive, Medicash advises how to
retain the best people and keep them happy.
The recession brings with it feelings of uncertainty and worry
for many, especially when it comes to job security. Resource and
cost cutting, the increased pressure to deliver and other issues
could have a damaging effect on individuals and consequently on
employee retention rates. Top of an employer's list of priorities
should be the need to focus on minimizing the negative impact of
the recession on their workforce.
Replacing an employee can be both costly and time consuming so
it is vital that organisations monitor employee turnover by putting
in place systems such as exit interviews to shed light on the
reasons for staff leaving. The Chartered Institute of Personnel and
Development (CIPD) recognise that it is relatively rare for people
to leave jobs in which they are happy even when offered higher pay
elsewhere, so it is good practice to know about issues which may
affect the retention of other employees.
How significantly employee turnover will affect an organisation
is partly dependant on the labour market they are in. A sector in
which employees can be found and trained quickly and easily can,
for example sustain a high level of staff turnover. A 2008 labour
turnover survey by the CIPD the reported 17.3% as the overall
employee turnover rate for the UK. The highest levels of turnover
are found in private sector organisations such as retail, call
centres and other lower paid services groups with a rate of
20.4%.
Organisations with an employee retention strategy in place
should be better equipped to deal with employee turnover. Retaining
good employees relies on keeping them engaged and feeling positive
about their job. Having open channels of communication between
management and employees, regular appraisals, encouragement of
work/life balance and a competitive employee benefits package will
help to achieve this. Healthcare benefits in particular are seen as
an attractive and desirable benefit by employees as they offer
added value, security and peace of mind and help employers meet
duty of care guidelines.
Employers have a number of healthcare options available to them.
Private medical insurance (PMI) is still a popular employee benefit
with market analyst Laing & Buisson reporting 10.6% penetration
of the population by the end of 2007. However the increasing cost
of PMI could make it too prohibitive for some employers. Healthcare
cash plans (HCPs) are considered a more affordable alternative to
PMI and have seen significant growth amongst both the corporate and
consumer sector with Laing & Buisson reporting a significant
27% rise in employer paid healthcare cash plans in 2007. Covering
the costs of everyday healthcare, these comprehensive plans also
include consultancy appointments, stays in hospital and stress
counselling. By the end of 2007 it was calculated that 8.2% of the
population were covered by HCPs. Whilst PMI and healthcare cash
plans cover various health costs, stand alone products such as
dental cover and employee assistance programmes (EAPs) offer more
specific types of cover. Finally, corporate health trust funds are
a corporate savings plan to cover the cost of medical expenses
claimed by employees, though popularity of this provision is
waning.
For employees facing a pay freeze or reduction, being offered
healthcare such as an HCP can fill a void. As the individual can be
fully reimbursed for health costs, they feel the full benefit of
cash back when they need it most. Employees can also see that the
organisation is making a commitment to their health and that they
are not just considered as a resource but valued as a person. EAPs
and healthcare cash plans which include stress counselling are also
a reassuring benefit for employees, especially as stress levels are
increasing.
Employers have a responsibility to promote a positive and
preventative approach to health and encourage employees to use the
benefits in their healthcare plans. This will benefit both the
organisation and the individual as incidents of long term sickness
will be reduced, meaning less internal cover will need to be found
and workloads of other members of staff will not be unduly
increased. Plans such HCPs are considered to be a proactive
healthcare option as they centre around the ethos 'prevention is
better than cure' with benefits that include discounted gym
membership and alternative therapies.
Employers need to realise that employees are the key to an
organisation's success and it is essential that their health and
wellbeing remains a top priority. The benefits to an employer of
providing healthcare is the reassurance that the health of the
workforce is being protected and significant amounts of money will
be saved through reduced absenteeism and employee turnover.
Organisations with healthy and happy staff put themselves in a
better position to weather the recession as their workforce will be
more productive, motivated and loyal. Ultimately, your employees
are the lifeblood of your organisation, so look after them.
Sue Weir, chief executive, Medicash