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Companies have to pull out all the stops to retain talent, and many turn to non-cash benefits to gain a competitive edge. Sabrina Zolkifi finds out what companies are putting on the table.
Money will always be one of the biggest motivators when it comes to work, but it may be slowly going out of fashion.
With globalisation, employees are increasingly aware of their self-worth, of brighter opportunities, as well as of what competitors are willing to offer to lure them over.
Because of this, leaders are focusing more on the value non-cash rewards can bring, and are offering attractive non-cash benefits in order to attract and retain talent.
“We believe that non-cash rewards, or in other words, benefits, are a vital component of our remuneration philosophy,” Aldys Kong, human resources manager at Ikea Alexandra, says.
Apart from the salaries and incentives, this comes as the welfare part that helps us attract, inspire and retain our co-workers and key talent.
Kong says it is also important to remember that while monetary rewards can provide staff with instant gratification, it is short-lived.
“Non-monetary rewards in the form of a gift, token, event or activity, can provide a deeper meaning and more personal touch to co-workers that it stays longer in their memory,” Kong says.
According to Kelly Services’ 2012 Global Workforce Index, only 51% of employees in the APAC region feel they are being recognised and valued by the employers, above the global average of 44%.
The big gap
Despite these figures seeming solid on the surface, others show a disparity between employee expectations and what companies are actually offering. Michael Page’s Salary and Employment Forecast 2012/13 found only 35% of employers in Singapore identified recognition and rewards as the biggest attraction and retention driver.
Perhaps the secret is adding a personal touch to rewards, some HR leaders believe.
“Recreational incentives such as an all-expenses paid trip to an exotic location for a top performer can go a long way in motivating an employee to continue doing their best,” Aadesh Goyal global head of HR at Tata Communications, says.
With seven in 10 Singaporean employees surveyed by Kelly identifying personal growth and fulﬁlment as more important than compensation and beneﬁts, leaders should also look at how they can tie leadership development programmes into the company’s non-cash benefits.
At Tata Communications, one of the biggest ways in which it rewards the top 1% of staff is the privilege of being part of the company’s Pro-Club, which recognises employees by taking them to a destination location for an intimate engagement session with senior leaders.
“With a recreational incentive, top performers in a global company like Tata Communications can get to meet each other, although they might be working oceans apart. Being able to bring together people of diverse backgrounds is something we take pride in as a global company,” Goyal says.
A little personalisation goes a long way
Another benefit of non-cash rewards, Goyal says, is the flexibility to tailor the benefits to fit the employees’ needs and motivations. Kong agrees, adding it helps especially in a diverse workforce such as Ikea’s.
“Non-cash rewards provide flexibility as it can be angled in a way we want it to be,” Kong says. “This fosters deeper appreciation and loyalty in turn, and our co-workers are receptive and appreciate this.”
Imre Vadasz, general manager of regional HR at Sony Electronics Asia Pacific, says it is central for leaders to realise the intrinsic value of non-cash rewards.
It is important to demonstrate to employees that the company does care about them as individual talent, and not just as a resource.
At Sony, the company provides multiple platforms to create a sense of belonging for employees, as this helps them feel as though they are a part of a larger community and family.
Sony employees are able to choose from a wide-range of non-cash rewards, many of which involve work-life initiatives such as CSR projects and recreational activities.
“This plays a key role in fostering a strong bond between the employees and the company,” he says.
A survey by the Centre of Talent Innovation found 87% of baby boomers, 79% of Gen Xs, and 89% of Gen Ys cite flexible working arrangements as the most important perk.
According to Michael Page, 52% of employers in Singapore said they currently offer flexible salary packages or fringe benefits to staff.
Of those who do, a majority (92%) offer it in terms of health benefits, followed by mobile phone allowances (75%), parking (42%) and a personal laptop (35%).
In order to make sure the benefits offered remain fresh, many of the programmes are managed from the ground up by employees from different departments.
“We also ensure that employees are able to share their ideas and feedback freely, which keeps our practices fresh and relevant for our colleagues,” Vadasz says.
It is also important for HR leaders to remember to constantly market and communicate the non-cash rewards are up for grabs.
“For it to have maximum impact, it is important to continually maintain employee awareness that there rewards and benefits are available,” Vadasz says.
Non-cash rewards can also boost loyalty. Kong said loyalty is something that takes time and invested energy to foster, but is something money can’t buy.
A report by Connexions Loyalty Travel Solutions found non-cash rewards can boost performance by an average of 22%, while team incentives can nudge productivity up by as much as 44%.
“When we have a loyal workforce, it will be easy and natural to be more productive because everyone takes ownership, becomes proactive and cares for the business,” Kong says.
“When we take care of our co-workers and they are happy, they will naturally take care of our customers.”
But isn’t cash still king?
However, with money being the single biggest reason Singaporean employees are leaving their jobs – according to Michael Page, 28% of employers believe this is why staff are jumping ship, followed by better experiences and learning opportunities (12%) and better work-life balance (6%) –, are companies missing out but focusing just on non-cash?
“Pay in general is a basic hygiene factor, and especially when you look at the retention of your high talent, it is just so easy to offer more cash than they currently earn,” Vadasz says. “We need to build a much stronger sense of belonging to retain and motivate them. For most people, this comes via non-monetary drivers.”
While offering more cash incentives is certainly easier, to offer true career development opportunities and a good workplace atmosphere is the more difficult goal to achieve, he adds.
And with only 17% of Singaporean employers singling out company culture as one of the most important attraction and retention factors, perhaps more needs to be done to engage staff at this level.
“As a company, we expect a lot from our people, and rightly so they should expect a lot from us as an employer,” Vadasz says.
“People now spend a significant amount of time at the workplace, and it is important that there is a mutually beneficial and enjoyable relationship between employer and employee,” he says.
What are the biggest issues for HR when it comes to non-cash rewards?
Imre Vadasz, general manager of regional human resources at Sony Electronics Asia Pacific, said one of the biggest issues is to identify where the biggest challenges and opportunities lie, and to see how HR can add the most value to the business and its customers.
“I find it very challenging to supply the right set of capabilities, as the organisations are growing and the demands are changing very fast,” Vadasz says.
Therefore, Sony makes sure the benefits it offers employees remain updated so as to keep staff better engaged and motivated.
With training identified as one of the preferred non-cash benefits in a report by Michael Page, Sony has established the Sony University, where it runs its Leadership Academy, to address that area of focus.
“We use regular 360° feedback as a crucial element of our performance management and development process,” Vadasz says.
“We put a lot of focus on employee engagement action plans, as well as offer employees multiple opportunities for job rotation from a very early stage of their careers,” he adds.
Aside from that, Vadasz says it is also critical for HR to maintain open and constant communication within the organisation, especially in areas where “we would like to step ahead with a more structured succession planning process”.
“A dialogue between employees, leaders and HR is essential to identify the priorities and put actions in place with speed to address them,” Vadasz says.