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SPA Consultants say high pay is bad for us


Happy Bunnies Stay In Their Hutches....

In many parts of the UK there are areas of rich employment opportunity for talented and less talented people. The 30 mile corridor that stretches from London to Swindon is one such area. This creates certain conditions that are detrimental to both employers and employees.

The employees find lucrative alternate employment from employers hungry for talent. Employers in turn offer increasingly attractive salaries and benefits to attract badly needed skills. This creates a vicious spiral in which employers and employees price themselves out of the market. Employees, because their salaries grow out of proportion to their abilities or increased skills, and employers because the salaries they are paying make their products uncompetitive. This dysfunctional spiral is often fuelled by recruitment consultants who recycle a group of individual’s on their books in search of ever increasing fee revenues. Nobody wins.

To break this spiral or slow it down employers have to increase the sense of fulfilment in their staff. To achieve this they need to do two things:

1. Improve the quality of the supervisory management in their organisations.
2. Focus employees on careers rather than monetary rewards.

Improving the quality of supervisory management.
When a business grows fast, able staff (professional, administrative, skilled and technical staff) are often promoted to supervisory and management jobs long before they are ready to shoulder the responsibilities and obligations these jobs demand. Some may never transition from being talented specialists to managers. This means that those working for them will be mismanaged. This mismanagement takes different forms but the most often experienced symptoms are a stifling of personal development, a reduction in the individual’s sense of achievement and a diminution of the individual’s creative autonomy.

In environments where salaries and benefits are roughly equal these three feature as the most priced and valued rewards. But poor management practices rob staff of this more valued prize. The poor management practices most often observed are that specialists continue to be specialists because they do not understand what it means to manage. They therefore tend to over supervise, keep the more interesting and challenging work to themselves and hand out the mundane. In addition they are likely to dictate how staff should do what is assigned to them rather than tell them what outcomes they expect and give people the freedom to achieve those outcomes in ‘their own way’. This is well understood by senior managers but they are often too busy running the business to create the time to correct this situation. So, they throw money at it believing that money will solve the problem for them. But it does not because unfulfilled staff feel well paid but undervalued?

Changing the value systems of employees...

These high employment corridors tend to have high infrastructure costs. Housing is expensive and the opportunities to spend money on a ‘good life’ are plentiful. So it does not matter how much employees are paid they will always want more. Stories of large bonuses in the City fuel this desire. So, when an attractive offer materialises they take it. There are many triggers for their willingness to move although, time and again, it has been found that being unfulfilled is the primary trigger.

Others could be that they may have just come to the end of an interesting assignment; their progression may have slowed or stopped or they may conclude that jam today is much better than jam and honey tomorrow. So the employee leaves to join a new employer who offers more money and similar benefits and describes a work situation that is more attractive than the one being left. The new employer uses the knowledge and experience the employee brings but may not add to the employee’s skills base or sense of fulfilment. To rectify this deficit the employee contacts the recruitment agency and sets the cycle in motion. The agency, recognising the commercial value of a talented individual and checking that the penalty period for commission reclaim has expired, finds the individual a new job. So 18 to 24 months later the same person is probably working for another client of the same recruitment agent. In this cycle, the employees build their bank balances in the short term but not their careers and they know it but cannot remedy the situation on their own. They need enlightened management to help them jump off the merry-go-round to nowhere.

What should employers do?

Employers need to grow good supervisors and sell the benefits of careers to their staff. To grow good first line managers employers need to start with the best ingredients – those who are willing to learn the interpersonal and business skills necessary to be good managers. Since they are in short supply, it is also important to teach individuals to manage themselves. Employers also need to stop throwing money at the problem. Money, after all, is the cheapest commodity available to employers of growing businesses. But careers are an entirely different proposition and not all businesses can offer staff good careers. Employers should therefore offer careers to talented individuals especially those who have done a few job hops. Because they would have realised that swapping employers to gain incremental increases in salary is a short term expedient leading them to nowhere land.

These potential career-seekers can often be identified by the fact that they have just entered into a stable relationship in their personal life (i.e., just got married, have young children) or have achieved levels of income and benefits such that job quality and working relationships are more important to them. Once you have attracted these people you need to take special care of them – treat them like you would treat a

How can SPA Consultants help?

SPA Consultants believe that it is essential to develop a Staff Retention Strategy that has as its end objective a HR process which is focused on careers rather than remuneration. To achieve this, we offer a 7 step process which involves doing the following things.

1. Understand the problem and measure the impact of staff turnover on your business.
2. Conduct confidential interviews with leavers to determine the real reason for their leaving and validate their opinions by investigating their claims within the company.
3. Carry out an industry review to identify potential competitor companies and why they could prove attractive to your employees.
4. Develop the management skills, styles and culture of your company, especially at the supervisory level, to ensure that they match the needs of employees and enable them to realise their full potential.
5. Work with staff to help them understand their real sources of value and teach them how to exploit it within the organisation.
6. Help build team cohesion at the supervisory level to increase the sense of community, team loyalty and team achievement.
7. Provide a continuous audit of staff fulfilment by validating the organisational climate to check that it matches that most conducive to staff retention.

Phil Syson, SPA Consultants.


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