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Incentivising Employees: It’s Not About The Money, Money, Money

Each year, on average, one in five workers in the UK changes their job. It is estimated that the typical cost to an employer of a departing employee (in respect of both loss of productivity and recruitment costs) is between £8,000 and £12,000. As such, keeping staff happy not only boosts morale and improves productivity, but reduces staff turnover and can ultimately be financially more prudent.

Statistically, most managers are aware that employee engagement is very important in achieving business success. Less than a quarter, however, feel that employees in their organisation are highly engaged. This means that more than 75% of employees are not engaged, and that is just according to managers, who tend to have rose-tinted glasses on when it comes to employee engagement.

Just what is it that is going wrong? Perhaps managers are spending their money in the wrong places or maybe the modern workforce is more demanding. Perhaps it is not even money that employees are after. The right incentives can massively improve staff morale and increase productivity. So how do you maintain engagement with your staff members and get the best out of them?

 

New and existing schemes

Your business may have one or more money-saving schemes already in place through third parties. Childcare vouchers, cycle to work schemes and discounted gym memberships are just a few of the benefits that are often standard fare. Many employees, however, do not know how to access these existing benefits so, if you do offer them, make sure your employees know how to sign up and use them.

By law, employers can loan their employees as much as £10,000 tax free per year. Most companies use this to offer rail season ticket loans, but there is scope to take advantage of this more creatively. For example, your employees may value a newspaper subscription or a Tastecard enabling them to get discounts at restaurants. When you think about incentivising and rewarding your staff, you need to remember that it is not all about expensive schemes but rather what is going to resonate with them. It is about creating a culture where employees are happy to come to work. You could also consider investing some of your budget on subsidised or fully-paid courses in subjects like nutrition, finance or stress management. After all, employee wellbeing is more than health and culture – they are often welcome incentives which are key for good engagement and retention and also conducive to a healthier and more productive workplace.

 

Thank you

Recognising achievement and saying thank you can be a powerful motivator; people want to be appreciated, not just at annual reviews but all year round. A personal thank you is usually best, perhaps over a team lunch. However, thanks can be communicated in many ways. A quick email or text message can suffice but managers can also thank their staff by, for example, giving them an extra hour off at lunch on a Friday when they have done a great job. Team socials are another great way to thank and incentivise staff and keep employees motivated. An experiment by University of Warwick last year revealed treated workers have approximately 12% greater productivity.

 

Communicate honestly and transparently

Keeping employees closed off from business activities tends to leave them feeling disengaged and disposable – it should be avoided at all costs. Selective communication is better than not communicating at all, but communicating honestly and transparently is the best practice. Doing this across all departments and territories is not easy, but it is proven to be effective. It helps teams feel invested in the company they work for, and feel part of its future. Everyone wants to be part of a success story, and when management share their vision, employees generally feel that it is their responsibility to contribute to that success.

As well as communicating with your employees, be sure to listen to them in order to get a better understanding of what they need from you as an employer. Having this dialogue in place will give you the best chance of ensuring you are providing your employees with the things that will make them happier and more productive workers.

 

Working flexibly

With the development of technology and the increase of WiFi hotspots, it is now easier than ever to work remotely. Employees with at least 26 weeks’ continuous employment have the right to request flexible working. Whilst this right used to be available only to employees with dependants (i.e. parents or carers), this was changed in June last year. There is little doubt that flexible working can have a positive impact on staff morale.

Incentivising staff is not always simple and cannot be done overnight. Do not wait, however, for employees to become complacent or frustrated with their day-to-day job; motivate them effectively and you will reap the benefits. Each person is motivated by slightly different things and each company has different sets of values which are unique only to them. Finding the right balance is key.

 

This article was first published on 5 November 2015 as part of our Employment Law Update series. Register above to receive our updates as soon as they are published, directly to your inbox!

This article is offered for general informational purposes only, and does not constitute legal advice. The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the views or opinions of Solomon Taylor & Shaw