Total Rewards Impact Employee Recruitment and Retention
By Bonnie Johnson
Making decisions based solely on short-term results can have a negative long-term impact on employee retention and organizational outlook. Developing stronger benefit and incentive packages now can go a long way toward recruiting and retaining employees and ensuring future success of the organization. Human capital is the backbone of the pork industry, which requires thousands of employees to complete the pork production process.
Total rewards are simply anything an employee receives from their employer and recognizes as valuable. Are bonus/incentive awards worthwhile? Based on the latest AgCareers.com data directly from agribusinesses, the majority of employees in all classifications were eligible for bonus/incentive rewards over the past year. Nearly 90% of businesses said that staff performance was linked to a reward and 80-90% had a structured performance system in place. Offering better benefits was one of the top strategies organizations used in order to compete with other employers for talent (2013-2014 AgCareers.com Agribusiness HR Review).
In 2013, AgCareers.com surveyed nearly 1,800 individuals that were either currently employed in the agricultural industry or looking for a job in the industry. More than 300 of these survey respondents were from the livestock production/animal health & nutrition sectors. Questions were posed to help employers understand what motivates employees. Examining and evaluating responses can help organizations of any size develop benefit and reward programs for maximum value.
“The most valued reward/benefit for all generations was health care benefits.
When analyzing data specifically from pork producers … only 68% of mid-size operations offered medical coverage to employees, while nearly all (96%) of large operations offered the benefit.”
Outside of direct compensation, 97% of respondents considered benefit and reward programs important to their overall job satisfaction at some level. Nearly 30% of respondents were dissatisfied with their current or most recent employer’s total rewards program. Understanding employees’ wants and needs is essential in implementing a total rewards plan that supports employee job satisfaction and retention.
Questions evaluated what affected respondents’ satisfaction as an employee of a company or their satisfaction with their employer. Over 75% of respondents agreed, at some level, that a company’s social responsibility initiative directly impacts their overall satisfaction with their employer.
Employers’ efforts to be innovative and make industry advancements also impacted overall employee satisfaction for more than 90% of respondents.
A friendly and amiable work environment was important to 90% of respondents, who agreed at some level that the relationships/friendships developed with their coworkers greatly impacted their satisfaction with their employer. It is interesting to note that there was no difference between genders in response to this question. Are your company’s current employees happy to work for you? If it is known throughout the industry that your organization has a great culture with happy employees, more top candidates will also want to work for you. Measuring employee satisfaction will help you to understand how your current employees feel. Word-of-mouth is a powerful recruiting tool!
Respondents were given a list of statements and asked to select all that were an existing concern for them or their family. The top three concerns were adequate retirement savings, work/life balance and health care costs. When comparing employee concerns across the different generations, the top concern for Generation X (ages 31-50 in 2013) and Y (18-30) was work/life balance. The top concern for Baby Boomers (51-70) was adequate retirement savings. Ask your employees what benefits or reward programs you should offer. Unfortunately, only 25% of respondents said their current employer asks. Aim to stand out from other potential employers by asking and then taking action.
“A friendly and amiable work environment was important to 90% of respondents, who agreed at some level that the relationships/friendships developed with their coworkers greatly impacted their satisfaction with their employer.”
Does your organization have benefit and reward programs that address employee concerns? If so, remind employees and communicate often (once per year at the very least). Consider highlighting a different benefit or reward in quarterly communications with your staff.
Keep your personal opinions on company policies to yourself. For instance, you may not be a fan of your company’s benefits package, but don’t share that with employees you supervise.
Respondents were asked what rewards and benefits they valued most, regardless if it was offered or not by their current or most recent employer. The most valued reward/benefit for all generations was health care benefits. When analyzing data specifically from pork producers in the Employee Compensation in Pork Production survey, only 68% of mid-size operations offered medical coverage to employees, while nearly all (96%) of large operations offered the benefit. Considering responses from the Total Rewards Survey, health care was one of the biggest concerns for employees as well as the most valued benefit. Health care benefits are a vital component in competing with other employers, both inside and outside of the pork industry, in recruiting and retaining top talent.
Generation X and Baby Boomers both selected retirement savings plans as one of their most valued benefits, while Generation Y put more value on flexibility and opportunities for advancement. The value of paid time off (PTO) decreased slightly for each generation, from youngest to oldest.
Consider the generational differences in most valued benefits when recruiting, and highlight certain rewards based on your audience. For instance, at a college career fair, you may want to emphasize paid time off and advancement opportunities. In contrast, when negotiating with an experienced professional, emphasize retirement savings plans and health benefits.
When looking at gender differences in valued benefits, female respondents valued paid time off, flexibility, professional development and learning opportunities more than men. Meanwhile, male respondents valued vehicle benefits more than women. The full report includes a detailed breakdown of responses by gender and generation, thus providing important insight to employers for developing a customized total rewards plan.
Respondents were questioned about rewards and benefits offered by their employer that they do not participate in or utilize. The most underutilized benefit was Employee Assistance Programs (EAP), which provide employees with confidential counseling and advice services. The next highest unused benefit was tuition reimbursement, followed by child-care assistance and gym membership. If your organization offers benefits that are rarely used, consider moving those resources to programs that employees value most, such as health benefits, retirement plans or paid time off.
More information can be found in the full report of the survey results from AgCareers.com; visit the Resources/News > Market Research page to download a free copy. The Total Rewards Survey results demonstrate how employees feel about rewards and benefits. Determine how your company’s practices compare to the results and consider altering your total rewards plan to align with what employees’ value most. A total rewards program can have a far-reaching effect on employee satisfaction, recruitment and retention, thus generating efficient processes and long-range success for your organization.
Bonnie Johnson is a Marketing Associate with AgCareers.com, the leading online career site and human resource service provider for the agricultural and food industries. In her role, she supports the AgCareers.com team and brand through marketing and communications efforts. This includes internal and external communications, email marketing, company branding and market research projects. Bonnie was raised on a farm in Northeast Iowa. She received her undergraduate degree from the University of Northern Iowa and her Masters from Iowa State University. Bonnie has worked in marketing for 15 years and has been with AgCareers.com since 2010.