EOFY Budget Problem
Many businesses are busily planning for the new financial year. We are no different. We have our heads down, reviewing our performance, gathering data and imagining what next year will be like. And the team, of course, is who we are counting on to deliver the plan. Business is a people sport after all.
As an employer of choice our people plan is a critical part of the success of RedBalloon. I urge business leaders to make sure that they review their employee recognition strategies too. The people who supported us as we tightened the belt, got our heads down and did the work. There might not be a budget for salary reviews or bonuses – but those who are engaged simply must be recognized for their contribution – or they will leave.
While many organisations treat employee recognition as an investment and an essential part of business strategy, a significant number of employers continue to overlook employee recognition – it is simply short sighted.
The latest Hewitt Best Employers study involving 37,000 employees in Australia and New Zealand reveals organisations that genuinely acknowledged and recognised their employees throughout 2009 achieved double the growth in revenue (22 percent) than other organisations (11 percent). The numbers speak for themselves
However, in reality, a large proportion of Australia’s working population feel ignored and undervalued by their employer. Only 44 percent of employees believe they receive appropriate recognition beyond pay for their contributions and accomplishments.
In addition, only 37 percent believe the reward and recognition in their organisation enable them to produce the results they want. This demonstrates the direct impact of reward and recognition on employee performance and productivity, two vital elements that produce a financial return for any business.
We as CEOs cannot do it on our own we need people around us who are truly committed to the organisation – and managers that are also recognising those around them. A formal recognition program makes recognition engrained within your culture. It is about teaching senior leaders, managers and employees to notice the contribution of those around them. The budget must be dedicated to this and recognition programs must be measured and tracked. Recognition is simple, yet so often completely overlooked.
John Millican Managing Director at Recruitercritic.com, a free service to HR and hiring managers that find, assesses and recommends recruiters to fill job vacancies, has seen an increase in clients wishing to replace high performing employees following a resignation.
Millican offers, “In recent times disenfranchised staff have traded remuneration and benefits for job security. Senior leaders asked their staff to help them ride out the GFC. Highly valued employees agreed to salary freezes, cuts to soft benefits, bonuses and training whilst tolerating an increase in workload due to the redundancies of colleagues.
“Senior leaders must be commercially prudent and now acknowledge the contribution and loyalty of their staff during the tough times or suffer a rising cost of turnover.”
Perhaps an end of financial year gift would be good to recognize and thank the team. Don’t make the simple blunder of ignoring your people… if recognition has been slim this year… best make up for it now.