I am often asked how you create loyalty amongst employees. Our experience suggests that too many companies rely purely on financial incentives to create employee loyalty – when there are possibly other, more effective methodologies to apply.
Most importantly, it’s worth noting that loyalty is often very personal. Where the employee completely buys into the vision / mission that their CEO has outlined, and they are wholly committed to ensuring its successful execution they often see it as a real personal betrayal if they ‘abandoned’ their sponsor, manager or colleague – particularly if they are midst a complex transformation. By engaging key individuals and making them an integral part of a change-journey, leaders ensure that their key employees are less likely to stray from the path – no matter how tempting the external offer might be.
Also, the employee needs to feel valued by the organisation – what David Novak, the legendary former CEO of Yum! brands calls his OGO (O Great One!) philosophy aiming to regularly recognise achievements in a workforce, and address what he calls the “global recognition deficit.” Indeed, Novak believes recognition creates an energised work force and inspires people to do great things.
One of my highlights of last summer was being a guest at Dishoom’s annual family Mela – a celebration, organised by the founders, Kavi and Shamil Thakrar, to thank their workforce (and their families) for everything they do for the ever-popular restaurant business. Held in a vast East London field, they organised a first-rate festival for their team with a combination of live music, DJ sets, endless street food, fairground rides, games and pampering. What an amazing way to show your appreciation for a hard-working team – I wonder how many other hospitality businesses are willing to close their entire restaurant estate for a day to recognise and thank their team members?
Businesses where employees enjoy coming to work are surprisingly hard to extract key talent from – even for a role that is a step-up or pays more. Our observation is that the physical working environment plays a big role here. At MBS we’re fortunate enough to visit tens of client offices each week – and, almost without exception, workspaces that have been designed with the employee in mind, are best at creating environments where colleagues enjoy coming to work. At a most basic level, this includes providing enough desks for each employee (it is amazing how much goodwill is lost through a culture of hot-desking – which can create a nomadic feeling), through to excellent facilities. Showers, barista quality coffee, all the way through to catered staff canteens, break-out spaces – and also space for recreational activities – are now the norm in best in class working environments. For example, we are constantly surprised just how much employees at Google talk about the slides in their offices (even if they have never been down one!) and the freshly cooked lunches they have made for them – or just how much colleagues at Pets at Home value the ability to bring their pets into work, and love that there is an outside space where their pets can exercise.
This thinking goes beyond the physical office space – it’s also very possible to build an organisational culture that people want to be part of and keeps them motivated, through soft benefits – non-traditional, and non-financial ‘perks’ that the employee themselves could not, or would not be able to afford to buy. While they still greatly value salaries, bonuses and even stock options, our sense is that employees place disproportionate value on the non-financial elements of package.
For example, one retailer offers all its senior team membership of the exclusive SoHo House – whilst, some traditional airlines offer free first-class travel for employees and their immediate family. Once you’re used to travelling first class, it is hard to turn right on the plane – and this perk has been one of the key reasons for such little employee turnover over many decades in the airline industry. Likewise, leaders in the fashion industry are used to healthy ‘clothing allowances’ to allow them to look the part in and out of work – and in the drinks sector, a healthy supply of spirits creates loyal brand advocates for life.
Of course, not all businesses have flights they are fortunate enough to be able to give away to encourage loyalty. Most businesses need to work hard to create a bundle of ‘benefits’ to make the employee feel truly wanted and engaged. Rapha, the sportswear brand, gives employees up to 2 extra days paid time off to participate in a cycling event or a similar sports activity – that’s on top of an annual clothing allowance so employees can ‘live’ the Rapha lifestyle. Innocent, an early pioneer in offering holistic candidate packages offers its employees access to yoga clubs, subsidised massages, sabbaticals, mental health resources and a free on-site gym. There are companywide get-togethers four times a year, followed by a weekend away in summer and a great big party at Christmas. Innocent also provides scholarships every quarter to help a few of their employees do something they’ve always dreamed of. Likewise, premium dog food brand, Lily’s Kitchen prides itself on activities – ranging from sports clubs, through to a choir – all “designed to make the team smile”.
In recent weeks, parents in the UK employed by drinks giant Diageo – regardless of gender – are now all entitled eligible for 26 weeks’ paid leave, retaining their corporate benefits and bonuses. This is a potentially game changing move on many levels – not least equality. Additionally, it does mean that if you’re thinking of starting a family, leaving Diageo really isn’t an option. What a clever way to retain a young generation of future business leaders at critical junctures in their life – and at the same time contribute to much greater gender and sexual orientation equality in the sector.
As employee’s attitudes to their work/life balance continue to change so too have the benefits that make one job more desirable than another. These soft benefits are becoming an important part of employee retention strategies – probably disproportionate to their cost.
Providing these ‘benefits’ are of course not without significant expense. On-site massages, international company retreats, and free beer all add up. However, it’s no more expensive than constantly recruiting to replace departing employees – and, obviously, avoids the unnecessary disruption of ‘regretted losses’ from the business.
Finding innovative ways to attract and retain workforces is the only way forward for employers. A unique culture with alluring benefits, make companies stand out, attracting and keeping the best talent.