While offering sexy benefits to attract the best and the brightest employees is nothing new, the past decade has seen technology companies taking this to a new level.
By offering non-monetary benefits and different (read innovative) working conditions, non-technology companies have been obliged to join the fray or risk being left behind.
Think Google, which offers staff secondary benefits such as complimentary meals, dry cleaning and massage therapy. Think Microsoft with its well-known family benefits such as homework assistance for children. It is non-monetary benefits such as these and others like leave allowance, flexible working conditions and the availability of well-being policies that are resulting in a new kind of workforce that demands something more than just a good salary.
In South Africa, companies are not immune to this expectation for and awareness of benefits that potential employees require above and beyond competitive salaries.
“Employees are becoming more aware of what they could expect from their employer, whether this is access to social networking sites during working hours or access to non-core benefits. However, this needs to be balanced with the emerging regulatory frameworks and issues such as productivity and risk. There are several categories of non-monetary benefits such as exposure to core projects, stretch assignments or international exposure where organisations are able to make a great deal of difference to the engagement of key people,” says Fergus Marupen, chief human resources executive at Absa.
Dave Helps, head of human resources at pharmaceutical company Sanofi-Aventis South Africa, adds that greater flexibility in working hours, working from home and additional benefits such as a cafeteria or staff canteen, gym, and day care facilities help set companies apart in an increasingly competitive market for skilled employees.
Also, with many organisations expecting employees to be on-call after 5pm and over weekends, benefits that improve work-life balance are in greater demand than ever before. “We are seeing an increasing need for flexibility and work-life balance, also fuelled by a more diverse work- force. We take care to stay abreast of the needs and desires of the upcoming and current workforce and strive to create an environment where these needs are met,” says Leanne Davidson, corporate and brand relations manager at consumer brands organisation Procter & Gamble SA (P&G).
Trying to be different
For Absa’s Marupen, the group differentiates itself on the core compensation package and the competitiveness of total compensation. “However, we are looking at increased focus on the engagers — access to top-flight development opportunities, opportunities to work on major projects and rotations to develop one’s career as part of a consolidated talent management approach. These are deliberately focused on top talent and are used as both attractors and retainers of talent,” he says.
Davidson feels that employees are one of the company’s biggest assets and need to be looked after in terms of competitive salaries, but also secondary benefits.
“Our company stars are recognised at the excellence awards, although all functions have their own tools and metrics for recognising employees. P&G staff can receive stock options for exceptional performance and increases are performance-based. Employees receive medical aid, car allowances (at certain levels), provident fund, group life insurance, and participate in a stock option plan. Our employees at the Johannesburg office also receive a subsidised lunch,” she says.
Meeting expectations
But are these enough to keep employees happy and retain those who are in demand elsewhere? For Absa, employee criticism is manifested in two ways.
In the first instance, in tight economic conditions, employees could be generally critical of their total compensation package because they are under financial pressure. Employees in this category are less likely to be concerned about the broader non-monetary environment, as the primary focus is on “paying the bills”.
The second category of criticism is those employees who are generally more financially secure and for whom the broader proposition becomes much more important. While not necessarily critical, employees are becoming potentially more discerning about what they would want from an employer.
“A critical consideration here is the nature of the organisation. The ‘new tech’ firms such as Google and Facebook have a particular value proposition which they are generally able to apply to the majority of their workforce. However, large banks or manufacturing firms have a range of diverse employee segments, and this makes it more complex to totally tailor the value proposition. This means that there may be some flexibility at more senior levels, or within specialist environments but this is generally limited to avoid allegations of discrimination or unfairness, or to dramatically increase the complexity of managing the human resources systems,” says Marupen.
This is also where the culture of a company can have an influence on existing and future employees. “In a competitive talent market, it is essential that employers highlight the aspects of their culture that make them unique in order to attract the best and brightest talent who will also be a good fit to the company,” says Procter & Gamble’s Davidson.
Fighting money with benefits
She says that her company’s approach is to target graduates that have the potential to become future leaders within the organisation. “We match employee passion to jobs and train, coach and reward employees. There is also international exposure through training and benchmarking with other subsidiaries. We offer the possibility of working abroad when a slot is available that meets employees’ strengths, career aspirations and business need,” Davidson says.
As has been seen in other markets, different generations of employees value different things. “For younger people, it is about salary, whereas older people want more job challenges and opportunities to add value,” says Helps.
“Buying” loyalty?
But companies are walking a tightrope of matching good secondary benefits with competitive salaries. “Non-monetary benefits are a component of the employee engagement equation. In scarce skill environments and environments where employees may experience greater financial pressure, financial bids for these employees often prompt movement. The key issue is to ensure that the overall value proposition is sufficiently compelling to make people think carefully about the merits of leaving,” says Absa’s Marupen.
Davidson argues that employee loyalty is influenced not only by the tangible benefits that they receive as part of a remuneration package, but also by other more intangible factors. “One of the most important factors for P&G and its employees is the match between individual and company values. This, and a continuous focus on coaching and development, has a positive impact on peer and manager relationships, another critical factor for retention.
Employees want to feel that they are part of building a successful business and a business that is a good corporate citizen and an investor in the country,” she says. But all these changes and innovations in secondary benefits do not necessarily mean that companies must significantly alter their behaviour when meeting the demands of employees.
Maintaining the status quo
“Firms will approach the next 12 months with a degree of caution as the local and global economies remain under pressure. It is clear that issues such as taxation legislation will place increased pressure on what employers can and cannot do in the benefits environment. This, coupled with changes in the overall governance environment (for example, the Companies Act), will lead to a more prudent approach to large-scale changes,” concludes Marupen.
This article originally appeared in the Mail & Guardian newspaper as a sponsored feature