What can employers do in order to retain critical talent?

As a rewards professional, I was surprised, but happy to see this result. I have heard several people say that remote working is going to make employees “hired guns” – meaning they will move jobs for a small bump in pay, with no other considerations. 

So, let’s look at each option in more detail:

Salary and bonus

Since the beginning of the pandemic, pay levels and pay mix has changed dramatically. In some industries pay was reduced, in some it stayed flat and in some it has increased dramatically.

I believe more than ever it is critical to know what the market is paying and to remain competitive. But not everyone can or should pay 90^th percentile of the market (that’s statistically impossible anyway). However, if employees leave your firm only for money, do you really want them to stay? 

Retention bonus

Retention bonuses are effective when you are trying to lock in critical staff during times of change – like a merger or acquisition. I think they can be effective short-term retention tools, but not effective as a long-term tool (certainly not as effective as stock).

Stock and stock options

Stock and stock options are great long-term reward tools that both align employees, employers and shareholders, and are also an effective way to retain talent. 

Stock options are a significant pay element in new and fast-growing companies (like tech and life sciences). For more established companies, I think stock (rather than stock options) are a better retention tool because they have a value unlike stock options, which can be worthless. 

Also, I think firms should provide stock, or other long-term pay vehicles, to a broader group of employees or consider employee stock purchase plans where stock is made available to employees at a reduced rate to the market.

Employee value proposition (EVP)

I don’t think EVP is as effective in the short-term when it comes to retention of talent. EVP is about culture and trust, and I believe that it takes some time to develop and reinforce this. 

However, employers should review and refine their EVP as a critical tool to retain and attract talent (amongst other goals).  This is a broader topic than the others – I’d suggest this includes, but is not limited to:

• Back to work strategy (hybrid or remote working)
• Career planning
• Culture
• Flexible benefits and employment terms.

Ray Everett is the CEO of Human Capital at Aon, for Asia Pacific, the Middle East and Africa