Employers are working harder than ever to attract and retain talent. The job-hopping nature of millennials, who are only a year or so away from becoming the largest generation in the workforce, adds to the challenge.

Low unemployment combined with the potential impact of Brexit on the availability of talent from overseas has made this a job seekers’ market. Organisations are under further pressure to find innovative ways of securing the talent they need to achieve growth and deliver business objectives, now and in the future.

Competitive salaries have always been a draw, but as countless surveys show, today’s employees want something more from their employer. Transactional perks are increasingly giving way to ‘softer’ benefits around lifestyle, personal development and flexible working as drivers of talent retention.

A study by employee engagement platform Perkbox to identify the UK’s favourite employee benefits revealed that the youngest workers prefer simple benefits such as flexible working and free coffees. Other perks currently in vogue include extracurricular clubs, office sports teams and birthdays on holidays – an unwieldy term used to describe annual leave on the day of your birthday.

“With 27% feeling that they would be more loyal to the organisation should these perks be available to them, it’s clear that they are becoming increasingly effective in the battle to retain talent,” says Perkbox co-founder Chieu Cao.

Meanwhile, Deloitte’s 2018 Global Human Capital Trends report revealed that employees want employers to expand their benefits offerings to include a wide range of programmes for physical, mental, financial and spiritual health. It found that 36% of UK businesses offer wellbeing programmes that include mindfulness, life balance and financial fitness.

Chris Dyer, author of The Power of Company Culture, has spoken to hundreds of organisations to identify what separates the culture of ‘good’ companies from the ‘great’ ones. What’s interesting, he says, is that pay comes a long way down the list of what makes staff stay happy and engaged in a company.

“It’s true that, generationally, workers will be attracted to employers for different reasons,” says Dyer. “Research specific to millennials, however, suggests that pay is not the top indicator of engagement. The alignment between how a company works, and how an employee wants to work, provides a great baseline for understanding the demographic.”

Dyer refers to Gallup’s 2017 international survey, which showed that one of the leading factors in engagement was being heard, and a 2017 study by US market research firm Qualtrics, which found that people will actually take less money to work for companies with values that resonate with them, that have a positive social impact, and that offer flexibility. In fact, 76% of millennials surveyed would take a pay cut if it meant more flexible work hours.

“Having some measure of autonomy, an important need for labour, can include working when and where you want,” he adds. “It may translate as full time now, and part time later. With traditional jobs competing with side hustles and technology, the intangibles will be key for the next wave of employees."

However, it is the strengthening link between flexible working and employee engagement that has seen firms across some of the more traditional sectors, such as law and accounting, adapt the way they attract and retain talent, particularly millennials, renowned for being motivated by the idea of controlling their own working hours and location.

Tom Moyes, training partner at Blacks Solicitors, is seeing the changing priorities of new and future trainee recruits first hand. He says: “It used to be that the only thing at issue was salary and basic benefits such as pension and health care. Now I get asked a lot more about what flexibility we offer in terms of working from home and this seems to rank highly on their priority list.”

Graduate hiring platform GradTouch offers some forward-thinking benefits and perks for its own employees – completely flexible working days and hours, unlimited paid holidays, and no job descriptions.

“People work from wherever they want, whenever they want, however they want,” says co-founder and director Zac Williams. “We believe in company cultures that are built on trust and give people autonomy; we think it gives employees more in terms of wellbeing at work and job satisfaction than beers on a Friday or a ping-pong table ever could.”

The company, which employs 25 people, began to overhaul its approach to company culture and employee benefits at the beginning of 2016, implementing a fully flexible approach to how, where and when employees could choose to work.

The biggest challenges were mostly around communication. Williams says: “If you give people complete autonomy, they need to keep each other in the loop about where they’re working from and when, so, we’ve had to put a big emphasis on diary management.”

The company is seeing tangible benefits. In 2017, seven people left the business. Across 2018, only one has left to date. It has also had a positive impact on potential recruits.

Williams says: “I now get approached by people wanting to work for us because of our culture, even when we aren’t advertising roles. We’ve hired eight new people this year, several of whom are experienced hires who have brought a lot to the business.”

The accounting profession is also seeing a similar swing away from monetary reward to work-life balance in terms of keeping valuable future talent retained and engaged. Last year, PwC introduced its ‘everyday flexibility’ initiative as a way to encourage more people to work in different ways and to foster a more informal flexible working culture across the business.

“However,” says Helen Hopkin, head of UK workforce strategy at PwC, “we recognised that from an external perspective we were missing out on top talent because the perception was that you couldn’t work in a flexible way at a big firm.”

A survey of 2,000 people by the firm found that over half said flexible working was their number one factor when choosing a job. In recognising the value that people place on flexibility, PwC developed the Flexible Talent Network. The platform allows people to list their skills and preferred working pattern, for example, shorter weekly working hours, or working for a few months a year on a project basis. The firm then matches recruits to relevant projects rather than specific roles. Since its launch, it has generated a massive response, with over 3,000 people applying to the network so far.

The move wasn’t without its challenges, initially created by the sheer volume of applicants and the process of matching them to relevant projects. “This will require a different way of thinking for parts of the business and we’re hoping that the Flexible Talent Network will help ignite new ways of resourcing projects and thinking amongst the teams,” says Hopkin. “The world of work is changing and if organisations want to attract the best people they need to evolve their working practices to the ways in which people want to work.”

All of this begs the question: will traditional employee benefits still have a place in the future talent retention strategy, and if so, how can employers get the best out of them?

“Traditional benefits like good pay, good pensions, maternity leave and childcare are the perks that employees expect to find with any job,” says Iain Thomson, director of incentives and recognition at Sodexo Engage. “It’s hard to get people excited by benefits like these, but if you don’t have them, employees will definitely notice. So, the latest trends need to build on these traditional benefits.”

In terms of their workplace attitudes and behaviours, millennials and older workers are not worlds apart according to a new survey from recruitment firm FlexJobs.

Some 70% of millennials have left or considered leaving a job because it lacked flexible work options, while only about half of older workers report the same.

Work-life balance is more important to millennials, with 83% ranking it as the most important factor in evaluating a job prospect, and 62% of older workers considering it a factor. Millennials value company perks more than older workers, 35% compared with 17%, and are more concerned with company culture, 44% versus 29%.

Millennials prioritise the ability to travel, with 60% saying it’s one of the primary reasons they work, while only 44% of older workers say the same.

Less than 10% in both groups say they choose the office as their preferred place to get important work done.

Global job site Indeed introduced its unlimited leave policy in the UK in January 2016. While employees still need their manager’s permission before taking off – to ensure the company remains sufficiently staffed – the principle is very simple; staff can take as much holiday as they like, and are paid full-time while on leave.

Indeed, which employs more than 6,700 employees across 27 offices globally, has seen a 20% increase in the number of vacation days taken by its employees around the world since the policy’s introduction. Its unlimited leave policy has proved a key factor in staff retention and acquisition, and has increased productivity and boosted morale and loyalty among employees.

UK managing director Bill Richards says: “This consciously forward-thinking unlimited leave policy is an expression of Indeed’s belief in the importance of work-life balance.

“But it’s also a demonstration of the company’s trust in its staff not to exploit the scheme.”

While unlimited leave policies are becoming increasingly popular in Silicon Valley, they remain rare in the UK, where a culture of ‘presenteeism’ is often the norm and bosses can be less amenable to such high levels of flexible working.

“Trust in a workforce is essential, and it works both ways,” says Richards. “Studies show staff who feel empowered and relaxed, and who enjoy what they do, will generally be more productive. By treating everyone like adults, we believe we will improve morale and encourage long-term employee loyalty."

Benefits have the greatest impact when they’re relevant, accessible and truly valued. While organisations are focused on millennial and Generation Z talent as more of their older workers are delaying retirement, many now employ multi-generation workforces, and need to adapt their benefits strategy accordingly.

“Businesses with employees across a range of ages should consider using flexible schemes that let each employee choose the reward or benefit that’s most relevant to them,” says Thomson. “This guarantees that everyone receives something they really value and appreciate and will have a positive impact on retention levels.”

However, in some sectors, notably technology, high levels of talent churn aren’t necessarily seen as a bad thing, as it ensures that talent is always growing and developing new skills. According to Dominic Harvey, director at tech jobs platform CWJobs, companies with tech functions should be embracing talent turnover.

He says: “Employees in technical roles such as coding, cyber security and programming, are always looking for a new challenge and are therefore prone to moving companies regularly to pursue a new piece of technology or an exciting project. But that doesn’t necessarily mean they won’t come back to their current employer when they can offer them the next new challenge.”

In fact it isn’t unusual for tech employees to return to their former employers. In view of this, companies need a strong employer brand in order to retain talent, but equally they need to be a great place to leave.

“Ensuring employees don’t leave in acrimonious conditions keeps the door open to them returning in the future,” adds Harvey. “One way companies can retain existing talent is through a robust learning and development programme. Staff will remain in a company longer if they feel they can grow with their company and are constantly challenged through new projects and interesting work.”

The real key to getting and keeping the best talent lies with knowing and expressing who you are as a business, which fortifies the pool of prospects and helps in the selection of good fits, says Chris Dyer.

“Rewards designed to fulfil employees’ needs will make them want to stay on,” he adds. “The good news is that companies are getting better at telling their stories so potential employees can opt in or out, analysing their best employees on a soft skills and hard skills basis, and actively searching for more like them, and rewarding good performers with flexibility, training, and career development.

“Pay is pay. Everything else is advancement.”

• Staff retention
  Business & Management Magazine, Issue 268, October 2018

The ICAEW Library & Information Service provides full text access to leading business, finance and management journals. You can read more on the latest strategies to boost staff retention through the articles below.