Employment Matters
August 01, 2006
SHRM report shows retention concern, noncash reward use rising.
By Donna M. Airoldi
Not surprisingly, rising health care costs were cited as the top trend in the Society of Human Resource Management's (SHRM) new Workplace Forecast, released in June at the association's annual conference, held in Washington, D.C. But in the employment segment of the report, a greater emphasis on retention, increasing productivity and increasing the use of noncash rewards were also key—and arguably related—concerns among HR professionals, indicating opportunities for the incentive industry.
"The retention trend surprised me, especially since it didn't even show up in the last report [two years ago]," says Jennifer Schramm, manager of the Workplace Trends and Forecasting Program at SHRM and author of the report. "One reason it has become an issue of concern is that expectations for hiring have been stronger, especially in the past few months. Another possibility is Gen X and Gen Y really coming into the workforce. Those are the groups that cause the most concern for HR professionals when it comes to retention."
About 48 percent of respondents cited developing retention strategies as the trend most likely to have a major impact on the workplace, a figure that tied with rising health care costs. Work intensification and increasing productivity were noted by 40 percent, while 37 percent cited the increased use of noncash rewards, including flex time and training.
"Talented employees now have enormous choice over where they work, and the social stigma about moving from companies is less than ever," says Dave Ulrich, professor of business administration at the University of Michigan in Ann Arbor. "What an employee may want varies, but it might include a sense of purpose; the chance to learn, grow and be recognized; impact, or doing work that makes a difference; incentive, in terms of pay that is equitable; community; and flexibility. When employees who give a lot have a personalized value proposition, they stay and are engaged."
The forecast also shows that 70 percent of employers use noncash awards, such as bonus leave, trips, entertainment and special training. (The forecast also cites the Mercer 2005/2006 U.S. Compensation Planning Survey, which said another 9 percent have considered adding noncash awards to their programs.) That makes the use of such awards the top reward practice for the sixth year in a row. The prominence of noncash awards can be attributed to employee demand for customized benefits, as well as higher benefit costs and wage pressure.
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