Its the money, stupid

2004

Proponents of 'trendy' human resource strategies such as flexible working and employer branding will doubtless disagree, but a new survey suggests that if bosses want to hang on to their talent, all they need to offer is decent pay, career progression, and a stimulating working environment.

Research into staff retention from the Recruitment Confidence Index (RCI) has found that nearly half of employers think pay and rewards, career opportunities and organisational culture are key to retaining good staff.

Only a quarter think that flexible working has a high impact on keeping hold of people, and a similar proportion believe that it has no impact at all.

The survey's controversial findings go on to suggest that employer branding, hailed by many as the solution to talent management problems, also has little impact on retaining the best people.

A mere one in five employers believed that their employer brand had a high impact on their retention rates, while one in three felt it had no bearing whatsoever.

Cranfield School of Management's Professor Shaun Tyson said: "These figures suggest that it is not sophisticated branding or flexible working options that are keeping staff, it is more basic issues - convincing people there is a good future through pay and careers to stop them moving on to competitor organisations."

Tellingly, however, the RCI did not canvass the views of employees. A government survey earlier this year that found that seven out of ten job seekers now want to work more flexibly and almost half would also look for flexible working over any other benefit offered by employers.

Meanwhile, almost six out of ten people quizzed by Aon Consulting last month said that they would be prepared to forgo some of their pay if they could have between three and six months unpaid leave.

Many public sector employers also take a different view. Almost seven out of ten say that they use flexible working benefits as a means of attracting and retaining staff compared to only four out of ten employers in manufacturing organisations and half of those in the services sector.

But other statistics tend to back up the RCI's findings. This year's National Management Salary Survey by the Chartered Management Institute (CMI) and Remuneration Economics found a strong correlation between a slowing in the rate of increase in salaries and bonuses and the growing number of resignations amongst executives.

When it comes to reasons why staff leave, the RCI found that pay and rewards figure highly again. Half of employers say this prompts staff to move on. But fewer than one in five (18 per cent) say staff leave to improve their work/life balance.

Perhaps unsurprisingly, one in five of the employers surveyed for the RCI said that they had problems retaining staff, with problems most severe among junior managers, clerical staff and new graduates.

However, women and directors tend to stick with an organisation. Only one in ten employers said that they have problems retaining female workers, while a mere three per cent of employers cannot keep board directors.

Mark Moorton, HR Director with AXA PPP healthcare said that the results made "interesting reading".

"Perhaps for HR professionals, highlight the need for some rethinking on how to attract and retain high calibre staff," he said. "It demonstrates that HR strategic management needs to be constantly reviewed and monitored to ensure that employers are getting the best out of their people spend."