Attracting and retaining key staff with affordable incentives

Attracting and retaining key staff with affordable incentives - Happy Employees - Demos HR Solutions Blog - Image by Nataliya Vaitkevich on Pexels

In today’s competitive job market, attracting and retaining top talent is more challenging than ever. With the cost of living rising, and employees seeking not just good pay but also meaningful work and benefits, employers must think creatively about how to incentivise their workforce. Fortunately, there are affordable and effective strategies that can help you keep your best people engaged and motivated without breaking the bank. In this blog, we explore a range of incentive options, from flexible working arrangements to offering shares in your business (something that a lot of employers have started to implement), providing you with practical ideas to enhance your employee value proposition.

Flexible working and work-life balance

Whilst legal changes have been made and further changes proposed affecting the way employers respond to flexible working requests from existing employees, offering flexible working as a benefit has become a significant factor for employees when choosing or staying with an employer. Flexibility can take various forms, including job-sharing, remote working, flexible hours, and working compressed, annualised, or staggered hours / workweeks. These options allow employees to better manage their work-life balance, which can lead to higher job satisfaction and productivity.

Flexible working arrangements can reduce overhead costs for a business while giving employees the autonomy they crave. By promoting a culture that values work-life balance, you are more likely to retain staff who might otherwise look elsewhere for a role that better fits their lifestyle.

Recognition and reward programmes

Recognition plays a vital role in employee engagement. Simple gestures like acknowledging hard work through employee of the month awards, shout-outs in team meetings, or personalised thank-you notes can go a long way in making employees feel valued.

Consider implementing a structured reward programme where employees can earn points for various achievements, which they can then redeem for rewards like gift vouchers, extra leave days, or small bonuses. Such programmes are relatively low-cost but can have a significant impact on employee morale and loyalty.

Professional development opportunities

Investing in your employees' growth can be a powerful retention tool. Offering training, mentoring, and opportunities for career progression demonstrates your commitment to their long-term success.

Providing access to online courses, funding for professional qualifications, or setting up internal mentoring schemes are all affordable ways to encourage professional development. These opportunities not only help employees feel valued but also equip them with the skills to contribute more effectively to your business.

Offering shares in the business

One of the most compelling incentives you can offer key employees is a stake in your business. Employee share schemes provide a way to align the interests of your employees with the success of the company, giving them a direct incentive to contribute to its growth.

Types of employee share schemes

In the UK, there are several types of tax-advantaged share schemes you can offer to your employees:

• Share Incentive Plans (SIPs): Employees can buy shares directly from their pre-tax salary, and employers can match these shares or give additional ones as a reward.

• Enterprise Management Incentives (EMIs): Aimed at smaller companies, this scheme allows businesses to offer tax-efficient share options to key employees, with the potential for significant tax savings.

• Save As You Earn (SAYE): Employees can save a monthly amount and, at the end of a fixed term, use the savings to buy shares at a discounted price..

Benefits of employee share schemes

Offering shares can be a highly effective way to retain staff, especially those in senior or specialised roles. Employees who own a stake in the company are more likely to be invested in its long-term success, which can lead to increased productivity and a stronger commitment to the organisation. It also provides a potential financial benefit to the employee, creating a sense of ownership and loyalty that is hard to match with other forms of remuneration.

Recent changes and considerations to employee share schemes

Recent updates under the Conservative government aimed to simplify and expand these schemes to encourage wider participation and make them more accessible to smaller businesses. However, it’s essential to stay informed about any changes that may be introduced under the current Labour government. The government's website provides up-to-date information on tax treatment and eligibility for these schemes, which can be found here and here.

Attracting and retaining key staff doesn’t have to involve exorbitant salaries or costly benefits. By leveraging flexible working, recognition programmes, professional development opportunities, and innovative incentives like employee share schemes, you can build a motivated, loyal workforce that is committed to driving your business forward.

When implementing any type of employee incentive, it's crucial to consider the administrative aspects and ensure that your employees fully understand the benefits and potential risks. Consulting with a HR professional as well as an accountant and / or legal advisor can help you set up a scheme that aligns with your business goals and meets tax and regulatory requirements (we have a couple of recommendations for accountants and legal professionals if needed).

If you need tailored advice on implementing any of these strategies, the Dêmos HR Solutions team is here to help. Please contact Debbie Mosley on 07974 695 365 or email debbie@demoshr.co.uk.

Tags: #talentretention #employeerewards #happyemployees #attractingtalent #employeeshares #flexibleworking,