Lastest news

Loyalty can cost more in consideration than cash

Jun 14, 2018
Non-financial rewards can be a very effective way to boost employee loyalty while rewarding your top performers, says Teresa Campbell.

Recruitment is almost always a costly business for employers. Hiring, training and developing new employees takes time and money. So, when you have invested in putting a team together, it makes sense to think about what you can do to boost employee loyalty long term so you don't have to repeat the process if your turnover become high.

Many business owners worry that they cannot offer sufficiently attractive bonuses and pay rises to hold on to their best performers. It is true that in a competitive market there will always be opportunities for good people to move on. So, if money is the only motivator, the chances are you will lose your best people over time. However, non-financial rewards are increasingly important in today’s market. By taking the time to identify and implement appropriate reward structures, you can boost employee loyalty, saving your business time and money in the long run.

Autonomy

When your employees have autonomy in their roles and see that you recognise and value their contribution, this in itself boosts loyalty. If they have input into the direction their role heads and maps out how they want to get there, an employee can feel more invested and like their job has purpose.

Offering volunteer opportunities also allows employees to give back to their local community, and gives them a feeling like they and their company contribute to the world beyond their sector and back to their community.

Development

It's important to offer development opportunities such as training, mentoring, and project work to employees who want to take advantage of them. Not only will your employees feel supported, but the productivity and knowledge of your workforce will grow.

In the same vain, offering assistence with education or exam fees, or personal skills development can also incentivise staff to stay put.

Flexibility

Our lives are a bit hectic these days, so offering flexibility for employees to vary their start and finish times or to work from home if appropriate could be seen as a big benefit getting new, top performers in the door and encourage them to stay.

Community building

Aside from the in-office benefits, it's good to consider offering staff days out, such as family picnics and gatherings, support for sport activities like a rugby or football team and rewards for long service in the company.

Company support

Often times, there are fees employees pay out because of their employment that could cost less the company less than a significant bump in salary but still give back to employees, such as paying for professional subscriptions or membership fees, enrolling in tax saving schemes for annual or monthly bus/rail travel passes, partaking in cycle to work schemes, offering company vehicles, extra annual leave or medical check-ups in the office.

Seek advice

Before deciding to provide non-financial rewards, it is important to consider the potential tax impact. Failing to structure your rewards correctly could result in a tax liability for you or your employees. For some rewards, tax incentives may be available.

Recruitment is key

Hiring the right people at the outset will save you time and money in the long-term. Hire for the role, the team and the organisation. Think about your leadership style, bearing in mind that recognition of individual contributions is often the key to securing employee loyalty. 

Finally, remember that your employees play a key role in helping your business develop and grow. When the time comes for you to exit, having a loyal team in place is often a key selling point.

Teresa Campbell Staff Director of PKF-FPM Accountants Limited.