Saving the superstars

Has the focus on staff retention slipped down the agenda in these challenging times? According to recruitment experts, it certainly shouldn’t. The message is clear: the best people are in demand and, if you want the best people, you must work hard to keep them.

Phil Parry, chairman of Spinnaker Consulting, agrees that in the wake of the 2008 crash and subsequent cost-cutting and redundancies, employees still at their desks have been keen to keep their heads down and keep their jobs.

But that isn’t always the rule. “We also saw good staff getting the jitters as the doom and gloom factor infected everybody; they didn’t necessarily know what their future was, or the future of the companies they were with, so we noticed two or three months after the recession hit a short influx of good quality staff who jumped ship before the ship sank.”

After that, throughout 2009 and most of 2010, the approach was ‘a job is better than no job’, he says. “But throughout all of that time, the absolute truism is that superstars were, and are, still in demand.”

By superstar, he means someone in very short supply, or in a key commercial role – the rainmaker. “If you can find yourself a superstar, then they are always going to be in demand. So companies realised, having trimmed down, that they needed to do things to look after and retain their superstars, because these are the people who could keep them going through the recession and help them run uphill faster when we start to come up and out of recession.”

Mark Charman, group chief executive of Faststream, says many companies cut very deep during the crunch, reducing staff numbers, and now they have to look towards the future again.

“There is more confidence amongst employers towards medium to long-term prospects in their business – not necessarily in the short-term, but they recognise short-term is the opportunity to get out there and get the right people on board,” he says. “This is true even in the container market, where you wouldn’t necessarily expect them to be out there recruiting, given the state of the market. There is demand out there for the right people.”

Many people may be desperate to change jobs, but they stay put in recessionary times – concerned that if they move, they could be ‘last in, first out’ with their new employer, says Mr Charman. “But as the market starts to come back, the reasons why these people wanted to change jobs in the first place return and they feel more confident.

“Things are moving again and have been moving since about October, when it was as if someone had turned the light on; since then, the upward curve in terms of companies hiring has not stopped.”

This is a bit of an upward spiral – one company decides to get ahead of the competition, then others see that company recruiting and join the ‘feeding frenzy’, says Mr Charman. “The general demand for people has increased.”

Employers have a misconception that it is a buyer’s market when it isn’t, he adds.

“A lot of the best people have kept their jobs and have not been unemployed; they have all been bear-hugged by their employers and stayed where they are. They will have one eye on the market, but these are the harder ones to attract.”

Phil Parry says pay rises are forecast to average 2.7%-3.2% in Europe and the US this year, but much higher rises are expected in South Asia (5%) and India (9%). In the ‘old days’, pay reviews were often applied across the board. Today, employers are increasingly differentiating among staff – using a ‘merit matrix’ to set salary increases based on individual people’s performance, specifically to accelerate the higher performers.

“This is definitely being used as a retention tool, to push the budget towards those more deserving of it and to make them know they are getting more,” says Mr Parry.

During the boom times, staff retention became a huge issue and companies introduced a number of new long-term strategies; the really significant fact is that those strategies have been maintained through the recession to keep the best people on board, he adds. “That has been a definite change from previous recessions, where a lot of retention strategies went out of the window completely, including investment in training. This time, people have been a little bit more long-term about it.”

What really works in terms of retention? Apart from paying ‘outlandish sums of money’, it is final salary pension schemes, says Mr Parry. “Of course, that is not really a strategy and not something they are doing any more of, but a lot of staff have a benign set of handcuffs that keep them and we find that even if someone is very keen to move from their current job, the final salary scheme is such an attractive benefit that the cash compensation you need to replace it is too high. So it becomes the most effective retention tool in the market.”

In the shipping world, he says, the past decade or so has seen a significant increase in the number of employees getting bonuses on top of their salaries. Unsurprisingly, these were much reduced in the past two years overall – but bonuses have continued being used widely as a reward and retention tool for the ‘superstars’.

‘Salary sacrifice’ schemes have been around for years in other sectors but are a relatively new arrival in the maritime sector. These involve employees taking a lower level of pay in return for flexible rewards – perhaps life or medical insurance thrown in, or additional holiday entitlement.

Mark Charman says large organisations are increasingly offering menus of benefits. “You choose what matters to you from the menu. A forward-thinking organisation might give you the opportunity to buy more holiday. Or you might be someone without a family who would prefer less holiday but more money into your pension.”

Other benefits might include healthcare for family members, childcare vouchers, tailored hours, or additional training. “Companies taking this flexible approach recognise this is part of the work/life balance and part of attracting and retaining the best people in the industry,” he says. “These menus recognise that we have a mixed workforce, mixed generations, including parents of young children all the way to baby boomers still working. They all have different needs.”