As our economy picks up, Saskatchewan employers are finding it challenging to attract and retain good employees. Not only is there small pool of qualified people in some trades, such as machining or engineering, but good employees are already well taken care of because smart employers know it costs much more to acquire good employees than to retain them. In times of uncertainty, employees are not willing to move unless the offer is really attractive.
However, a workplace “turnover tsunami” is predicted as COVID-19 subsides, presenting a ripe opportunity for attracting employees. How can suppliers that support the industrial, mining, and energy sectors prepare?
Saskatchewan organizations pay, on average, the equivalent of 16.8 per cent of salaries in benefits, including pension contributions. Two of every five firms (40 per cent) spend 20 per cent or more¹.
Do you know what your company currently spends on benefits, pension, and other rewards as a percentage of payroll? What is your desired market position? Are you in the middle, spending 17 per cent of payroll, or do you need to lead to attract the top employees now looking elsewhere?
One manufacturing client states, “Our strategy is to actually pay above market because we believe if you do you are going to attract better people and retain them.”
One big frustration we hear from clients is that employees are not educated on their total compensation: “Wages are only part of their compensation, and they don’t understand the value of everything else.”
Ken Cenaiko, owner of Croatia Industries, says, “The work they do as craftsmen is very rewarding and meaningful. The nature of their work is that they become fully engrossed in the project they are working on. A part works or it doesn’t, which makes the project’s success tangible.” Similarly, employers can communicate benefits and pension in a tangible way. By translating benefits and pension into a dollars per hour figure, the value of the total compensation can be better understood and appreciated.
For example, a machinist:
- Wage: $40/hour
- Group Benefits Plan: Annual premium, about five per cent of payroll; company contributes 50 percent of premiums, which equates to $1/hour
- Group Retirement Savings Plan: Company matches five per cent of contributions, which equates to $2/hour
- Health Spending Account: Annual $500 allowance equates to $0.25/hour
- Additional Benefits: Bonuses, service awards, boot and safety glasses allowance, training, sick days, etc. equal about $1.75/hour
- Value of Benefits: $5.00/hour
Imagine being able to communicate the value of your total compensation in dollars per hour when hiring. Chances are that a prospect’s current employer hasn’t communicated the value of their benefits this way. Instead of that potential employee leaving the interview knowing only that the compensation is $40/hour plus benefits and pension, they will understand that the total value of the package is $45/hour. What a powerful message demonstrating how much you invest in your employees and in their safety, health, well-being, and financial future.
Quality cannot be inspected into a product. It must be built in. As Jenelle Cooney, HR manager at Prairie Machine, states, “Employees that feel appreciated and valued, and that are provided a physically and psychologically safe work environment, tend to go the extra mile for their employer. The result is higher-quality products, happier customers, and continued company growth. Not to mention higher employee morale and loyalty.”
The whole is greater than the sum of its parts. We know benefits comparisons will never be apples to apples, but employers that can articulate the value of the whole “apple cart” may be better equipped to take advantage of the potential turnover tsunami and add some great people to their teams.
¹ (Saskatchewan HR Trends Report, Fall 2019).
Published in the August 2021 edition of the Potash Producer E-Newsletter.
