Wherever you tune in, you’ll hear it. The economy is back up again. Recruitment is slowly picking up, too. More employees are working on realising their plans – leaving their company. While most companies have returned to their pre-COVID salaries, 60% of employees in the UAE are looking to change jobs in 2021.
Employee retention isn’t a new issue. Still, not every organisation looked after their team members last year. High performing employees were already on the move last year. With rising confidence in the economy, so called “solid performers” may follow suit. They are looking for better career opportunities and enhanced benefits.
Are you ready to optimise your rewards offering?
Analyse your current market positioning
Cash is king. This old saying appears fitting in uncertain times. For many organisations, base salary also defines the actual payout of annual incentive schemes or end of service benefits.
Yet, the package is not made up of base salaries alone in the Middle East. Housing and transportation allowances are still a common part of cash packages. Whether you provide separate allowances or a consolidated allowance, it’s vital to review the total cash package.
How competitive are your packages? How do your benefits fare against the market? Are your employees at risk for leaving for a more dollars?
While you’re analysing the current market positioning, review the actual pay of the employees? Do you have need to address internal equities, too? Your salary and allowances structures may be competitive, however, do you also utilise the entire range for the actual compensation?
Understand your employees’ needs
When was the last time you asked your employees what they needed? Anecdotal stories can give you a start. Review your demographics and learn more about your staff. Employee surveys, focus groups and data from exit interviews can provide precious insights.
We all know that young single employees have different needs compared to those with children or those planning for retirement in the next few years. Yet, they are all receiving the same kinds of benefits.
So what do your employees really need? Additional time off to look after their newborn or young child? Health insurance for their elderly parents living with them? Additional health insurance for themselves? Support to complete a post-graduate degree or obtain a professional qualification? This could be in the form of time off or financial support. Re-gaining a healthy weight through a nutrition programme?
Understanding their needs allows you to optimise your spend and provide what employees truly value. Cafeteria-style benefits, where employees can choose from a range of benefits, can cater for these different needs.
Identify opportunities to enhance your offerings
In jurisdictions where employees are subject to income tax, cafeteria-style benefits can reduce this tax liability. They double function as an effective retention tool. In the Middle East, flexible benefits are slowly increasing their popularity. The added administration still seems to be an obstacle for organisation and without the additional tax benefit, some companies are still questioning the cost.
You don’t have to offer it all at once! When considering a more targeted offering of your benefits, you can start with a few adjustments to meet your employees’ needs and to optimise your spend.
Health insurance can often be negotiated to include different plans. Discuss the options for your coverage with your health insurer and/or broker, ideally before the renewal date. They can highlight opportunities for your employee to choose from for a small premium, if any. Elaborate if parents could be covered under the company’s policy. This can be a more cost-effective option for employees compared to taking out individual coverage.
Internal policy changes, e.g. for additional time off, can be signed off at any time. You can also introduce vouchers or discount programmes at any time. While this gives options, it makes the enrolment (or selection) process for more challenging. As such, decide when you can implement the proposed optimisations and start building your communications plan around it.
Don’t wait too long. Your staff may have resigned by then!
Make the most out of your rewards offerings. We’ll explore non-financial rewards next week. Contact us and find out how we can support you identifying the options most suitable for you and your employees.