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by Craig N. Clive | March 10, 2009

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Several months ago, my son received his driver's license. We went to a fast food restaurant near the MVA to celebrate. The placemats on our trays contained information about job opportunities and reasons for seeking employment at this restaurant. I scanned the listing and fixed on one reason, tuition reimbursement for driver's education training.

The managers had done their homework and asked themselves what would attract young people to work for them rather than the many other establishments in the local area. Rather than shot gunning their recruitment efforts and attempting to attract everyone, they had identified a specific segment of the population and were targeting their incentives to fit that segment. This restaurant had a program that fit the needs of their potential employees and differentiated it from other employment opportunities in the area. The cost associated with providing tuition reimbursement for driver's education training is a few hundred dollars. Obviously the restaurant determined this was an inexpensive recruitment and retention rewards program.

Years ago, an organization I worked for decided to strengthen its retention strategy. The workforce was composed of young, highly skilled employees who were much in demand. Senior management decided that a long-term retention strategy was needed to keep these workers happy. Their solution was to improve the pension plan, providing higher retirement benefits. Management believed the younger employees would see this as a reason for remaining with the firm for the long term. The cost of the improvement to the pension plan was projected to be several million dollars. The improved program was announced with much fanfare and communication. But the younger employees saw this benefit improvement as an incentive for the older employees who already had more years of service. The younger workers began leaving the organization. The plan did not work, partly because no one had thought to ask these employees what they felt were good retention options.

These examples show the difference between a rewards program designed to fit the needs of the entire workforce (like a glove), and a rewards program which is a "one-size-fits-all" (a mitten) solution. The workforce of today has different, more individualized needs and desires, and organizations have to identify and offer programs to satisfy those needs if they want to be successful in recruiting and retaining employees.

Employers eager to attract and retain employees today must determine what the employees see as incentives. Clearly, what employers and employees view as suitable incentives can vary greatly. Implementing your vision of a great rewards program without getting feedback from employees can be a costly mistake. Create a work environment where the employees are part of the solution and participate in the identification and development of rewards programs.

Though the labor market appears a bit soft presently, organizations have to think beyond the current situation and develop recruitment and retention programs for the longer term. Recent census figures indicate that the size of the workforce is shrinking and will continue to shrink until 2014. Companies have two choices in recruitment and retention 1) become an employer of choice, or 2) constantly hire and rehire as positions open.

Companies often fail in developing effective rewards programs because they lose sight of employee wants and needs. Employees want to feel part of the organization they work for. They want to have their opinions valued and have an opportunity to provide input to the organization. This means organizations have to develop cultures which permit open communication and employee involvement. Retention programs do not have to cost millions of dollars to be effective in recruiting and retaining employees. They just have to provide rewards that meet employees' needs and make them feel appreciated.

Craig N. Clive, a Certified Compensation Professional and a Senior Professional in Human Resources, is a nationally recognized expert in the design and implementation of performance based reward programs, and a Principal at Baylights Compensation Consulting, LLC.

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Filed Under: Workplace Issues
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