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Most SMEs would find it difficult to match the incentives many corporate companies are offering employees—cars for their spouses, nine-day fortnights, subsidised gym memberships, yearly train tickets, rainwater tanks and iPods—all in the name of recruiting good staff and keeping them. But as Charisse Gray reveals, small businesses can compete with the bottomless pockets of larger organisations

Keeping good staff has always been an important issue, but in today’s business climate it is more pressing than ever for SMEs to ensure that top talent stays with you. Skill shortages will only worsen as the baby boomer generation moves towards retirement, and attracting and retaining valuable staff will become even more challenging for small to medium businesses in the years ahead.

As an SME you can compete with larger companies if you understand that what employees are looking for today is not just remuneration, but a total employment experience. Employees are looking to form an emotional attachment to an organisation, and when they find this they are more likely to stay.

A total employment experience starts with a strong employer brand with which people can identify, and is enhanced by a good workplace culture, competitive salary, and targeted financial and non-financial offerings.

It is so much easier for an employer if you don’t have to work hard at recruiting and keeping the best people. Companies that are good to work for—that have a good workplace culture and strong employer branding—don’t have to work hard at recruiting good staff. The word gets out and ‘the law of attraction’ kicks in.

Employer branding is a ‘whole of business’ strategic approach to attract, engage and retain talent. It is concerned with building an image in the minds of current and potential employees that your business is a great place to work. It’s about relationships—those between an employer and current, past, and potential employees.

As Brett Minchington, managing director of Collective Learning, a firm specialising in employer branding, explains: all businesses, regardless of their industry, have an employer brand. “It’s the glue that binds the different components of the business together to ensure employee loyalty, commitment, and performance.

“The employer brand is the most powerful tool a business has for attracting, engaging and retaining the right ‘talent culture fit’. There is so much competition for good talent today but those companies who have projected a strong employer brand will be in a better position to pick and choose from the best candidates. In fact, having a strong employer brand means talent will choose them.”

Your staff culture is important, too. How do your staff feel about the workplace culture? Is it a fun place to work? One of the key secrets to retaining valued staff is creating an office culture people enjoy being part of.

Making your business a fun place to work, where laughter and a social atmosphere is encouraged, will cost you nothing. A happy employee is a productive and engaged employee who enjoys coming to work and is more likely to stay.

Increasingly research indicates that what is important to people is how they "feel" about their workplaces and how they relate to each other as friends, colleagues, and co-workers. This outweighs factors such as the job itself, the salary, geographical location, and the technology being offered.

Incentive initiatives can be powerful staff motivational tools and even the financially- based ones don’t have to be expensive to be effective. Monetary incentives, like pay increases, bonuses and profit-sharing, are typically given for outstanding performance. However, you can also give rewards for length of service, sales, suggestions or ideas, safety, and attendance.

Not all incentives have to be financially based. Non-financial incentives can include simple things like ‘employee of the month’ plaques, early Friday finishing, child care, flexible working arrangements, telecommuting, job-sharing, child-minding facilities and health benefits. These incentives send strong messages that you value family.

You might consider longevity bonuses for employees on the anniversary of their employment with you, a strong message that says you value employees who stay with the business. Taking your team out to the occasional dinner sends a clear message that you appreciate it when staff go the extra mile.

A non-financial incentive can be as simple as giving a valued staff member much needed support when their workload becomes heavy. This proactive measure will improve production while, at the same time, showing the employee that you understand and appreciate exactly what they are going through, and you are prepared to do something to ease their burden and help them carry out their duties more efficiently.

Helen Bermingham, director of human resources, NSW Business Chamber, says that offering staff differing programs across a business, with short- and long-term financial incentives targeted at specific roles, rather than the traditional company bonus, is an emerging retention trend.

Bermingham cites other popular incentives as one-off sign-off bonuses to attract candidates into the business–changing from monthly to quarterly sales commissions; secondment opportunities; increased leave entitlements; professional development opportunities; variable pay plans for sales executives; soft benefits—i.e., fruit bowls in the office, massages, birthday gifts, etc.; retention payments for tenure; ability to purchase additional annual leave; and immediate rewards for performance like movie vouchers, dinners, weekends away etc.

Never underestimate the power of recognition and praise. Showing appreciation and praise to your valuable employees sends a positive signal to all your staff that you value and appreciate your talented and loyal employees. Simple but important gestures—such as thanking and praising your good employees regularly and giving them feedback about the contribution they’re making—provides positive reinforcement. Most employees feel a sense of pride when an employer communicates with them directly about how much their individual contribution is valued by the business.


You can recognise and reward excellence in staff performance through an employee reward and recognition program. Design a program around your employees’ needs and make it innovative, flexible, and meaningful to the employees and the business. The main objectives of the program should be to retain and motivate your top employees and to foster a culture of continuous improvement in the organisation.

It is important to have a reward system that recognises both individual and team performance. Provide rewards for employees and teams who exhibit behaviours that you have identified as critical to the business and who have been responsible for driving improved business results.


Do This

• Thank staff who have done a good job, and mean it.

• Praise your good employees regularly and give them feedback about the contribution they’re making.

• Celebrate and recognise individual, team, and company performance and success.

• Encourage laughter and fun.

• Develop a staff incentive program that is simple, clear, and easy to manage.

• Design the program to be innovative, flexible, and meaningful to both the employee and the business.

• Ensure the program has the objectives of retaining and motivating top employees while fostering a culture of continuous improvement in the organisation.

• Set specific, attainable, quantifiable, and meaningful goals, and clearly communicate them to staff.

• Consider rewards for length of service, sales, suggestions or ideas, safety, attendance and ‘employee of the month’; as well as for exceptional performance.

• Consider non-financial incentives such as assistance and support in busy periods, flexible working hours, telecommuting, job-share, and child-minding facilities.

• Ensure remuneration is fair and at, or above, industry average.

• Find out what motivates and engages your employees and provide the resources and environment where people want to come to work.

• Foster strong leadership. Most people don’t leave their job, they leave their manager.

• Invest in your staff. Train, coach, and review staff performance regularly and effectively.

• Offer employees continuing opportunities to develop skills and grow their careers within the organisation.


Don’t Do This

• Make promises to candidates that you aren’t sure you’ll be able to deliver on from day one.

• Underestimate the influence of employee word-of-mouth to attract new employees. Unhappy staff won’t attract new candidates; they may dissuade potential employees.

• Invest money in becoming an ‘employer of choice’ without carefully considering exactly what you’re trying to achieve and how the changes will align with your business and truly benefit staff.

• Make big decisions about new employee benefits or workplace enhancements until you’re sure you’ll have the capacity and resources to follow through with them.


Regional Issues

Attracting and retaining good staff in country areas is becoming increasingly difficult. However, Sallyanne Morrison is one of the more successful regional employers, with an optometry practice employing eight staff in Dubbo, in Central West NSW.

Morrison admits she has had to resort to hand-selecting or “poaching” the optical dispensing staff from other businesses in Dubbo, when they impressed her, and that she has always had difficulties attracting any staff with an optometry degree to the regional town. An optometry degree requires a TER of 98.7, and many country students don’t consider optometry a valid career choice. Most graduates are females who are not inclined to travel that far west and leave their families behind; and those who do try it often find that their social lives are limited.

Morrison must be doing something right because of her seven staff, three have been with her for more than nine years, one for five years, and another for three years. Employees who have left over the past 10 years have done so for personal reasons like childbirth or spouse relocation, rather than job dissatisfaction. Morrison says that the long-term staff seem to have a sense of ownership of the business and are empowered to make some business decisions.

Her conditions are attractive—work hours are Monday to Friday, nine to five, with alternate Saturday mornings—whereas many city practises tend to be in large shopping centres with seven days a week trading.

Compared with their city counterparts the country practice sees more patients daily, with a diverse range of eye conditions, and this makes the employees’ work both challenging and interesting.

Morrison also offers other benefits for staff to stay:

• Time off to attend school functions or family orientated activities. Children of staff are welcome to come to work after school, until their parent leaves for the day.

• Higher than average salary packages which often include the use of a vehicle.

• Free accommodation for the first three months to help them adjust/set up.

• One ‘all expenses paid’ conference of their choice per year.

• Paid up membership of professional group, Optometrist Association Australia.

• Regular practice dinners.

• Annual all expenses paid trip to Sydney for Optical Trade Fair.

• Attendance at Women in Business luncheons and forums.

• Occasional cash bonuses when staff have worked particularly hard.

• Financial assistance with university fees. Reimbursement of costs incurred over four years for training provided as a salary sacrifice.


* Charisse Gray is senior business writer with NSW Business Chamber.


Small companies, big turnovers


Small businesses are losing staff at a greater rate than their larger counterparts, according to a survey conducted by the Australian Institute of Management (AIM). The survey used responses from 779 private and publicly listed companies from various industries, including 218 small companies.

“Voluntary staff turnover in small companies has shot to 13.6 percent, up from 10.3 percent last year and notably higher than the 12.6 percent for large companies,” reports Dr Jennifer Alexander, chief executive of AIM NSW/ACT.

Pay rises have been healthy across the board, but small companies can no longer rely on just remuneration and benefits to retain employees. The top reason given for staff resignation, according to 43.4 percent of employees, was to progress their career.

“This shows that small organisations need to do a better job of developing career pathways for their staff,” she says. “Their challenge will be to manage their staff’s needs more effectively within their means, such as offering more personalised mentoring and providing more clarity around progression opportunities within the organisation.”


* Source: AIM National Salary Survey 2007


Team-Building Giveaway

Although traditional incentives to keep staff include rewards, creating the right staff culture is just as important. And training and team building exercises that help to establish your workplace as one your employees want to be a part of, is a good place to start.

Which is why we want to help you reward staff and get the team working with this team building giveaway, courtesy of Jenolan Caves House and Dynamic Business magazine.

One lucky reader will win a Jenolan Caves Team Building Weekend package for up to six people, valued at $3,000.

The winner and their team will be able to explore the beauty of the Jenolan Caves underworld and its many natural beauties, from imperial limestone arches, underground rivers, and richly decorated chambers.

And there are plenty of activities to keep you occupied aboveground, too. Take a leisurely walk down to Carlotta Arch where you can gaze out across the intriguing Blue Lake or follow the trail along Jenolan River where you’ll find many rare examples of the local geology, flora and fauna.

The prize includes two nights accommodation for up to six people, all meals and accommodation at Jenolan Caves House, team building activities including an adventure caving tour, bush navigation and orienteering, as well as a full day’s use of a conference room for meetings.

To be in the running, simply email competition@loyaltyaust.com.au by November 30, and tell us in 25 words or less why your business would benefit from a team-building exercise.

For further information on what’s on offer at Jenolan Caves House, visit www.jenolancaveshouse.com.au

* Terms and conditions: Offer valid for use to May 31, 2008. Entry is free and open to all residents of Australia, and entrants must supply a valid name, email address, company name and phone number. Employees of the promoter and their immediate families and agencies associated with this promotion(s) are not permitted to enter. At the time of publication the total prize pool is valued at $3,000, depending on number of attendees. The prize is not transferable or redeemable for cash. Entries must be received no later than 30/11/07. The draw will be held on 03/12/07 at Loyalty Australasia, Level 11, 80 Mount Street, North Sydney, NSW 2060. Winners will be notified by phone. Unclaimed prizes will be redrawn on 09/01/08. All personal details of the entrants will be stored at the office of the Promoter. The Promoter is Loyalty Australasia of Level 11, 80 Mount Street, North Sydney NSW 2060 ABN 94 100 300 301. Authorised under NSW Permit No. TPL 05/00491; ACT Permit No. TP 05
/0396; NT Permit No. NT05/401.

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