Employers should get out and promote themselves to staff who are thinking of leaving for greener pastures, and remind them that they had been retained through one of the harshest downturns in history, an employment specialist says.
Mercer New Zealand information products solutions manager David Little told the Otago Daily Times the message should be that employees still had a job.
The employees might be unhappy about no wage or salary increase, or their pay rate, but the employer had shown a duty of care to keep them in work.
There were several scenarios likely to occur for employers this year as their top staff recognised that the improving economy offered new work opportunities, he said.
Some employees would be happy with their salary or wage, knowing they had some left over each week for discretionary spending.
Some would need more to make ends meet, but the employer might not be able to pay more, meaning some people would leave.
Others would be happy with the money but unhappy about the way they were being treated.
Some of those might not be fully engaged at work, and the employer could resolve those issues by finding what would make the difference.
"It could be something as small as a better grade of coffee or it could be flexible working hours and working from home.
"It doesn't always have to be about money.
"The employee connection is very important."
With morale lower and employee uncertainty about the future potentially high, the need to focus on lifting employee engagement would be great, Mr Little said.
Managing an organisation's changed environment would be critical to success.
There was no "one size fits all" framework for change but in developing the capability to manage change, an organisation would be required to cement a view of where it was and where it needed to be, pay attention to the "journey" of the organisation and the employee and introduce things such as training, incentives, role design and leadership programmes to keep people engaged, he said.
Organisations would need to be smarter about how they allocated benefits and rewards to various segments within the workforce, Mr Little said.
Mercer's market survey, conducted in July last year, found pay rises would soon be harder to come by in New Zealand, with pay budgets expected to shrink further in the 12 months to June this year.
It showed that over the previous 12 months, national salaries for same incumbents (those who had remained in the same job in the past year) remained largely unabated, rising by 5.2%, a slight dip from 5.4% in the previous year.
By contrast, across-the-board salary growth was expected to fall to about 2% over the next 12 months.
"In the current economic environment, even if organisations are well into recovery, they will need to focus more broadly on ways of providing incentives to employees without cash by considering rewards to include career development, training and other intrinsic work factors."
The extreme volatility of 2009 had exposed executive remuneration programmes around the globe, he said.
For example, tremendous value had been created and lost very quickly through equity incentives, calling into question the link between executive reward and company performances.
Even though the executive packages in New Zealand companies did not tend to be as complex as those in Australia and beyond in terms of short- and long-term incentives, organisations reviewing executive pay programmes would be taking the opportunity to look for ways of balancing shareholders' interests with the need to attract and retain top executive talent, he said.
There would be renewed calls for balance in executive compensation, including a focus on retention and reward.
Organisations would rethink the relationship between risk and reward and, in particular, look for ways to ensure that rewards reflected sustainable performance results so that excessive risk-taking was not encouraged.
Leaders who could drive organisations through tough times while restoring confidence among employees would be needed this year, Mr Little said.
