Strategies to attract and retain a skilled workforce are imperative, however, employers must ensure their tactics are aligned with their goals. Lisa Gettins, Equity Partner, Employment at BPE Solicitors LLP explains.
The manufacturing industry has a skills shortage. This is a fact that is well researched, well documented and being acted upon.
However, in the short term it means employers find themselves with an increasing need to retain key staff and attract new ones in a very competitive marketplace. Can financial incentives play a part in helping to do this?
Too many businesses embark on employee reward initiatives which are costly, without first considering the key questions of what they want to achieve, who they want to retain and how best to do it in their business.
There are many options and questions to consider. It may be that certain groups of staff can and should be incentivised but others not, as they are less in demand; but does that solve one problem and create another group of demotivated employees?
Will one strategy work for all? It can be more effective to introduce different rewards for different levels. Can you afford to motivate all financially? What are your competitors doing?
Once the internal need is assessed, external benchmarking is key. Financial rewards vary greatly, from bonus schemes to employee share schemes. The latter can be used highly effectively as a means of retaining and motivating employees.
They also align the interests of employees with shareholders and can reduce employment costs through use of structures which attract valuable tax reliefs. They can be introduced for all levels of employee but are particularly attractive for senior and skilled staff.
It may be that something as simple as committing to the living wage, not the national minimum wage (NMW), which attracts and retains the workforce you are looking for. The current NMW rate is £6.50 per hour, whilst the living wage costs are £7.85 per hour outside of London, and £9.15 within London.
Non-financial benefits should be assessed carefully. You need to consider what is going to motivate your employees and future workforce. Changes to employee benefits leave can be attractive depending on the type and profile of employee you are looking to recruit.
However, will such benefits attract and retain the staff you need? Before putting any incentives into place you should also consider your communications strategy. There is little point investing time into a reward strategy if you don’t communicate it to your workforce and any potential future employees.