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Australia is in the grip of a talent shortage, which is unfortunate for anyone trying to recruit the right people into their organisation. Not only are businesses being forced to recruit from a small pool of talented people – a situation fuelled by declining unemployment rates and the retiring of many “baby boomers” – but they’re also under immense pressure to retain high performing employees, given the mounting costs involved in replacing staff.
According to a recent survey by recruitment giant Hudson, 85 per cent of human resource hiring managers blame Australia’s talent shortage for the increase in the average time it takes to recruit a new employee, with almost one quarter (23 percent) saying they have experienced increases of more than six weeks.
During this “waiting period”, organisations are not only faced with an obvious loss of productivity while operating under capacity, but could also see low morale among staff left to absorb the extra work, and reputation damage as a result of advertising vacant roles, particularly in the instance where a number of positions need filling simultaneously.
In attaining a lower staff turnover rate, it seems organisations are becoming increasingly comfortable to go beyond the traditional salary package boost to engage staff. On the back of recent concerns over high staff turnover, several incentive travel organisers have reported a higher-than-average level of enquiries from clients wishing to retain employees through team-building and recognition award programs.
Marc Thompson, general manager of one of Australia’s largest adventure companies, Adrenalin says he’s experienced an influx of clients approaching him with the desire to build incentive programs to keep their people motivated.
“For the past few years, salary levels have been increasing and pay for performance programs have been on the rise, but it seems this hasn’t been solving the problem of retention. We’re finding that clients are now looking for other incentive-oriented initiatives to compliment financial incentives. These have a far-reaching impact as they’re designed to reward a range of staff demographics, psychographics and levels within an organisation.”
He suggests this renewed interest in incentive programs is due to the increasing challenges that organisations face in achieving both retention and high performance from staff, particularly in a market where competition for human capital is high, and replacement and training costs are significant.
“Global companies are undergoing a transition in how people are valued,” Mr Thompson says. “Once thought of in terms of cost, people in successful companies are now valued as rich sources of talent, skill and diversity, which are critical to the success of the business. We’re now working with many of these organisations to help them demonstrate how valued their staff are within their business.”
Karen Mathieson, director of sales and operations for PCO and DMC company, ID AUSTRALIA, also reports a growing interest from clients in incentive and reward programs.
“We’ve noticed an increasing amount of companies looking to develop travel rewards, rather than merchandise,” she says.
“This seems to be a result of management recognising time-poor staff, thus aligning the company’s rewards to experiences that can motivate and create team-building opportunities.”
An increase in demand for incentives and rewards has led to a broadening in the type of programs that are in vogue.
“The ‘sun and the sea’ incentives are still foremost in people’s minds,” Ms Mathieson says.
“Although there are companies who like to add in an educational element, whether that is visiting a world heritage-listed site or getting involved in philanthropic activities.”
In Mr Thompson’s experience, incentive program preferences tend to reflect the latest travel trends, which are currently centred on experiences and adventures.
He says “No longer are the five-star beach resorts, or just an exotic destination, motivators for staff. People now want to experience once-in-a-lifetime events. They want an experience that will contribute to how they are living their life, which will broaden their mind and challenge their character.”
Experiences develop employees on a personal level while also allowing professional development to occur, which is obviously what many employers are keen to see coming from an incentive program.
Another shifting trend is the frequency and length of incentives. Companies are moving from the traditional once-a-year incentive trip to smaller rewards leading up to a major yearly incentive – a formula which Mr Thompson says allows companies to maintain higher motivation and productivity levels throughout the year, generate a level of self promotion throughout the staff, as well as providing another method to reinforce objectives and culture.
He also says that although individual incentives have been around for some time, companies are opting to provide group incentive programs which outweigh individual rewards.
“The benefit of a group incentive is that it’s a cost effective solution. Businesses can combine roadshows, strategic planning, launch activities and organisational communication to key staff members one time in one location. Budgets can also be shared across a number of departments. We often see sales, product management, finance and marketing joining together to share the cost of the incentive.”
The increase in the take-up of incentives by Australian companies is positive, but there’s no denying that the benefits of such programs need to be promoted ongoing in keeping awareness levels high and ensuring budgets continue to be allocated to this area of business.
And with the current state of the employment market, it would seem now is as good a time as any to start waving the incentives flag.
To perfect the art of endorsing incentives Ms Mathieson says, Australia could learn a lot by following in the footsteps of some of the world’s leaders in the market, such as the US, China, North America and South Africa.
“I think we could certainly take a leaf out of the Americans’ book with a little more self promotion about the benefits that travel rewards encourage,” she says.
With an incentive travel industry worth $3.41 billion in total dollar volume (source: Convention Liaison Council 1995) and average group sizes of 60, the US would certainly be a good role model for the industry here in Australia.
She also adds that a nationwide study with useful statistics on productivity, staff retention and general morale in Australian workplaces would be invaluable to the incentives market going forward.
Photos supplied by Adrenalin.
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