Investing in the future of your business through your people
An industry roundtable proudly hosted by
A report recently published by the CIPD noted that UK employers are hiring at the fastest rate since before the financial crisis with hotels, catering companies and leisure leading private sector services. With a significant upturn in recruitment levels, so too competition for the best people by employers is increasing. The interesting dynamic however, is where once a higher salary was the leading consideration by employees looking for the next move, there has been a significant shift in priorities from solely financial gain to extra benefits.
At a forum hosted in the American Express offices in London Victoria this week, EP gathered a group of hospitality, financial and professional services experts together to discuss this trend and what options are available to the sector.
It is interesting to note that since 2008 Board level packages in the UK have continued to grow by 17% while middle management packages have increased by 1.4%. Conversely in the pre-recession years following 1998 Board director packages in hospitality increased 120% while General Management rose 35% and middle management by 10%. Now, as the country continues to come out of a deep and prolonged recession, where salaries and benefit packages have stalled somewhat, the expectation and demand for considerably better starting packages has risen, which includes incentives and extras. Bonuses in the sector have increased by as much as 50% in recent times, the argument being that shareholders benefit from incentivised leaders. So while UK wages remain somewhat stagnant, finding ways to engage employees and motivate best performance can be achieved through strong reward and recognition programs.
In the course of the presentation it was noted that employment levels have remained relatively high throughout the bad years due to low interest rates and the banks having supported underperforming businesses. This picture is beginning to change as growth this year is forecast at 2.7%, meaning those poorly performing companies will suffer/fail and the best people within come to look for other opportunities.
All this may seem a positive for the sector and the wider UK economy, however the issue surrounding retention comes into play.
The question is with so many options to choose from, what are the most efficient for business and which are most appealing to employees?
There is no such thing as one size fits all in terms of incentives. Broadly speaking, younger more junior recruits into the sector are looking for training, development and career progression. This demographic tend to look for opportunities to grow professionally, and if theyre to be given monetary reward then its preferable to receive a one-off cash sum or gift card. By contrast, more established professional managers tend to think more long term and look for greater pension contributions, travel expenses and similar long-term contributions
A recent analysis of managers and team members across the sector listed the top ten most important elements of a work environment. Interestingly monetary considerations placed 4th after responsibility, recognition and relationships with colleagues. According to Real Business 2014 workers want the right culture, not big pay rises.
Does recognition link back to business results?
Organisations with high engagement levels tend to experience a positive return on talent outcomes, customer satisfaction and essentially the bottom line. With the right model in place, employees work 57% harder and are 9 times less likely to leave the business.
One of the most effective and well-appreciated options available on the market when rewarding and recognizing employees are gift cards. Originally seen as the purview of stores building loyalty with customers, pre-paid gift cards for employees is the fastest growing segment in the world and is expected to grow to circa $9 billion in the UK alone. Indeed half of all B2B gift cards are now used by companies are for employee reward schemes whereas only 20% are used as part of a customer loyalty programme.
While gift cards arent the only option available, they do seem to be one of the most popular with businesses year round despite consumer sales peeking in Q4 Christmas. They are also one of the most cost effective options for businesses to manage logistically.
There are indeed a plethora of options available to businesses in the hospitality arena. Choosing the right suite of rewards for employees is important, so too is the planning and implementation of such a scheme as there are not-insignificant national insurance and tax implications to consider. In the first instance it may be worth consulting an expert or accountant.
As part of a wider conversation and initiative, EP, in partnership with American Express, will continue to look into this field, developing strategies for the sector and helping businesses plan their employee retention scheme. If you or your business is looking at the best and most effective means of incentivising your team, EP has a number of partners who can help choose the right options for you and your employees. To know more please contact Arlene McCaffrey.