Does retention purely come down to remuneration?
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A new report has highlighted that remuneration and benefits are the most important drivers for employee retention.
The Employee Insights Report 2024, compiled by Deloitte Australia and commissioned by Origin 360 EV, which surveyed over 1,500 employees and 15 HR representatives from a range of industries, has revealed that 72 per cent of employees rank remuneration and benefits as the most important driver for retention.
Although the priorities for employees are well reflected in the results, there is still a disparity between employee preferences and what employers are focusing their retention strategies on.
As far as the ranking system goes for the drivers of retention, work/life balance (56 per cent), positive work culture (31 per cent) and career development (21 per cent) were ranked below remuneration and benefits.
That disparity between employee preferences and employers could impact the retention strategies of organisations going forward, as seven out of 10 employees seek an organisation with values that align with their own. Even more dangerous for organisations is that 63 per cent would not work for an employer that is not aligned with their personal values.
Instead of focusing on remuneration and benefits, which are the preferences of employees, employers are directing their efforts to career development (87 per cent) and work/life balance (87 per cent), with remuneration and benefits down at the fifth ranking (53 per cent). Close to 80 per cent of respondents stated they feel valued by their employer if they offer a range of benefits that align with their values.
Origin’s general manager of e-mobility, Chau Le, said: “Understanding how employee benefits, remuneration and values alignment impact the ability to attract and retain talent is incredibly important for businesses.”
Employee benefits overall must be better communicated to workers, as many are often unaware of what their benefits are, especially if they aren’t being represented through remuneration. Value alignment and improved communication can significantly boost employee satisfaction.
We may see businesses adapt their retention plans to target specific age demographics. Gen Z employees prioritise positive work culture, while high-income female employees value opportunities that promote work/life balance.
Whatever the strategy is, it is clear that the financial situation that workers are currently in due to inflation, cost-of-living crisis, and rising house prices has motivated them to prioritise remuneration and salary benefits over previous work benefits.
If employers are unwilling to accept that remuneration is a top priority, they may face higher employee turnover, with workers walking out the door in search of salary improvements.
RELATED TERMS
Benefits include any additional incentives that encourage working a little bit more to obtain outcomes, foster a feeling of teamwork, or increase satisfaction at work. Small incentives may have a big impact on motivation. The advantages build on financial rewards to promote your business as a desirable employer.
Your organization's culture determines its personality and character. The combination of your formal and informal procedures, attitudes, and beliefs results in the experience that both your workers and consumers have. Company culture is fundamentally the way things are done at work.
An employee is a person who has signed a contract with a company to provide services in exchange for pay or benefits. Employees vary from other employees like contractors in that their employer has the legal authority to set their working conditions, hours, and working practises.
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.