11/08/2020

7 mins

In the quarter to June 2019 the UK rate of unemployment stood at just 3.9% of the total workforce aged 16+. While this is up a fraction from 3.8% in the first quarter of the year, the last time unemployment was at 3.9% was back in the first quarter of 1971.

With unemployment at multi-decade lows, the labour market is tight and there’s a great deal of competition for workers, even despite the economic uncertainties on the horizon.

There were 824,000 unfilled vacancies across the UK economy in the 3 months to June 2019 — clearly, the economy is crying out for workers despite near-record employment levels.

Given this high level of competition for workers, it’s perhaps no surprise that companies are stepping up in their recruitment drives by improving salaries, benefits and other working conditions for workforces and prospective new hires.

And it’s working. 47.7% of SME workers we surveyed said they were looking to move jobs in the next 12 months. With more than 95% of the UK’s businesses being SMEs, that’s a lot of workers potentially on the move.

What Can Employers Do to Retain Staff?

When asked what they were looking for in a new job to get an idea of what was prompting them to move, SME workers said they considered the following when searching for a new role:

Salary
Potential job satisfaction
Benefits and perks
Work hours and location
Work environment.

Helping With Workers’ Money Worries

Clearly salary is very important. With 59% of people saying they felt stressed about money, this is no surprise.

Of course, it’s not just as simple as handing out pay rises left, right and centre so workers don’t leave. That may not be affordable and practical for your company to start with and so you may have little control over it.

Moreover, money stresses come from lots of different sources. While for most of us our salaries are our main source of funding and so play a big part in money worries, there are other areas of our lives where money matters and could be stressing us out.

This is particularly true for the so-called ‘sandwich generation’ — those currently at least partially financially responsible for both children and ageing parents.

They might be supporting children through university while helping fund their own parents’ care costs, for instance, which could be significantly squeezing household budgets.

Other money worries include debts and fears that they may not have enough to live off in retirement.

How to Help…

There’s a broad range of things that may be concerning them other than simply what’s in their pay cheque each month, although admittedly their salary will have a big impact on all of the above.

Employee Benefits

Employee benefits packages usually cover a lot more than just their headline billing. While you’re usually buying a Group Life Insurance, Group Income Protection Insurance Group Critical Illness Cover or Employee Health Insurance policy, you have to look below the surface at what comes with these policies.

Often you’ll receive some kind of employee assistance program with it, which can offer wide range of additional benefits for staff without them even having to make a claim. Such benefits can include helplines offering help in a wide range of situations.

For instance, AXA PPP’s LifeManagement helpline offers clients of is Group Health Insurance policies support with financial worries, consumer issues, housing concerns and eldercare.

Other options to help individuals out financially include:

Discount schemes
When you take out an employee benefits package through Drewberry, you and your staff get access to discounts on other financial services not covered by the scheme. So, for instance, if you take out Group Life Insurance, your staff could be entitled to a discount off Income Protection or Health Insurance.
Season ticket loans
The daily commute is stressful enough without worrying about how you’re going to pay for it! A season ticket loan allows your employees to buy an annual season ticket upfront and repay it each month out of their wages.
Loans and savings schemes
Salary sacrifice out of your wages can help your workers save for the future, including into their pension. Meanwhile, loan schemes are underwritten by payroll to help workers afford necessities that they wouldn’t be able to stretch to otherwise without opting for more expensive forms of lending.
Financial education seminars
Often there’s room to improve financial literacy among workers; too often this involves skills that simply aren’t taught in skills. Financial education seminars can help your employees manage their money better and deal with other pressing finance matters with greater capability.

Improving Job Satisfaction

Here are the top three reasons people gave for being unhappy in their job and some potential solutions:

Lack of recognition for their efforts (56.7%)
Improving recognition for employees’ efforts — at Drewberry we have monthly team activities and a quarterly awards ceremony where staff are recognised for meeting various important metrics, such as achieving a high number of five-star reviews — can play a big part in increasing job satisfaction.
Lack of options for career progression / development (55.1%)
It’s important employees feel that they have a way of moving on up through an organisation and won’t just be sitting stagnating. It’s a big cause of unhappiness and ultimately deciding to move on to pastures new. At Drewberry we have introduced Personal Development Plans for each of our staff and have highlighted the career progression options they can take through the company. This includes hiring staff, such as members of client support, who eventually go on to become trainee advisers as they gain skills.
Lack of general support from managers / coworkers (52%)
Workers need to feel supported to thrive, whether that’s from their managers or their peers. If there’s no trust and faith in their coworkers or their superiors, then the fabric of the company and its culture can quickly disintegrate.

Offering Benefits and Perks

Something employees were keen to see from their next job was improved benefits and perks over what they were currently offered.

These don’t have to be expensive benefits and perks — when asked which employee benefits they’d like to see, flexi-time topped the list and the ability to work from home came third. Flexi-time, with all of the benefits outlined above, is inexpensive to introduce, as is home working. Both are clearly popular.

While Private Medical Insurance, the second-most-desired employee benefit, is pricier than simply introducing home working and flexi-time, it has a number of benefits, especially for small businesses where every member of staff counts.

These include managing staff absences, improving morale and productivity and improving employee retention and recruitment.

If Private Health Insurance is too costly but you’re still looking to introduce an insurance benefit with a valuable employee assistance program, why not consider Life Insurance? Company Life Insurance, also known as Death in Service Cover, is cheaper than many business owners think and is fourth on the list of most-desired benefits.

Alternatively, if you’d like something a bit closer to Health Insurance but can’t afford to splurge on Health Insurance itself, you could always consider a Corporate Health Cash Plan. These reimburse your employees for everyday health expenses such as dental and optical appointments or prescription fees.

Rounding out the top five desired benefits was free snacks in the office — although if you want employees in the best shape possible, perhaps stick to fruit rather than biscuits!

Working Hours and Location

Working hours and location were the second- and third-most important factors for people in deciding to move.

In the quarter to June 2019, UK workers toiled away for 1.05 billion working hours each week, up from 1.03 billion hours in the same period in 2018. While part of this can be explained by the increase in the number of workers as unemployment has fallen, the average number of hours worked per worker each week is also up over the same period, from 31.9 hours to 32.1 hours.

UK workers, it seems, are working harder as time goes on. Perhaps it’s no surprise, then, that when asked which employee benefits they’d like to see, flexi-time topped the list.

Home Working and Flexi-Time

Home-working and flexi-time are options available to certain employers who have workers who can do their jobs from home. While obviously it’s incredibly difficult to blowdry someone’s hair or serve them lunch from home, other parts of the services sector, which makes up a hefty chunk of the UK economy, require very little client interaction at all.

Consider, then, whether it might be beneficial to offer working from home options for your workers to boost staff morale? You may even be able to cut down on overheads by needing fewer desk and thus less floorspace, as well as reducing your company’s carbon footprint from commuting.

Home workers tend to be happier because they have a better work / life balance. Moreover, they’re less likely to catch the office sniffles if they’re not present, reducing absenteeism and presenteeism from minor illnesses, the biggest cause of workplace absence across the country.

Improving the Workplace Environment

Work environment clearly mattered to many people when it came to considering a new job role.

It’s important to think about how your offices come across when people come in for interviews, as they’re essentially interviewing you to see if they’ll fit just as much as you’re interviewing them.

Take a Closer Look at Your Workspace

Look at your workplace with fresh eyes. What vibe do your offices give over? Are they drab and tired?

There are a number of simple and cheap options to improve the workplace environment. For instance, have you thought about:

Adding plants?
Making space for a ‘breakout’ area, where staff can relax for a time on comfy sofas / chairs?
Including somewhere for your staff to eat lunch that isn’t stuck in front of their computer?
Hanging some pictures on the walls?

At Drewberry, we like to decorate our walls with our successes, so we’ve framed some of our advisers’ best reviews and hung them on the walls. But you could easily substitute reviews for artwork or anything else you feel would liven up the office environment.

Another important factor that spills over from the simple look of the office into more important areas, such as the health and ultimately therefore productivity and absence levels of your staff, is how your workstations are set up.

Comfortable chairs and proper ergonomic arrangements are essential for workers who spend a lot of time in front of their computers. Some employee assistance programs even offer occupational health support with employee benefits, recognising the high proportion of musculoskeletal-related absences that occur each year and seeking to nip them in the bud before they can start and result in a claim.

Of course, these are all relatively shallow points that discuss the ‘look’ and ‘aesthetic’ of the office, even if comfortable workstations are essential for maintaining good employee health. However, they can make a real difference to job satisfaction by making your workplace a pleasant place to be.

In Conclusion…

As you can see, there’s plenty you can do to improve employee morale and, with it, boost staff retention in today’s competitive labour market.

With the right balance, having these benefits and perks, as well as simple changes around the office, can even help improve recruitment of staff in the fight for new talent.

About Drewberry

Our goal is simple: to improve our clients’ financial wellbeing.

We help our clients take control of their finances by building lasting relationships where we support them to make informed decisions.

We provide financial advice services to individuals and businesses throughout the UK. Whether it’s setting up personal insurance to protect your lifestyle, managing your pensions, investments and other assets to improve your financial future or setting up employee benefits for a company, we’re here to help.