“Attracting and retaining talent is tougher than it has ever been, workers are quitting at high rates. The lack of qualified candidates and a competitive market pose significant challenges,” reports Forbes Magazine.
Knowing this, Global Talent and HR Managers may find themselves in a difficult position of serving two conflicting, yet simultaneous corporate directives:
1) containing costs; and
2) enticing talent to relocate.
To address these, consider how applying permanent versus temporary policy changes can impact overall company goals.
Short-term and Long-term Decisions
While one’s bottom line may improve with permanent policy changes in the short-term, temporary modifications often result in better long-term results to offset transitory situations:
- Permanent -- or “non-reversible” – policy changes may be brought about to reduce costs. However, it is important to fully appreciate the problematic side-effects that may follow:
- Cutting benefits may not be in alignment with other company goals, such as being competitive to attract talent.
- Business-critical employees may be discouraged from relocating again if benefits are discontinued or uncompetitive.
- Employees may feel the need to negotiate for compensation provided in other ways, thwarting company cost control opportunities through efficient relocations.
- Dissatisfaction may occur if similarly positioned individuals realize others negotiated more compensation to offset the lost benefits.
- Temporary changes are for short periods – 6, 12 or 24 months – and are also reversible based on company culture and shifting market conditions. Examples include modifying eligibility parameters for receiving mortgage or high cost of living subsidies or offering loss on sale assistance for changing market conditions.
NEI is seeing more companies adding flexibility to programs to attract / retain employees. This can include – but is not limited to – offering:
- homeowners a BVO or GBO home sale benefit;
- current renters new home closing costs; or
- more policy exceptions.
NEI team members are skilled in counseling employees how to maximize approved policy benefits while being mindful of client costs.
Redirect Resources Toward Good Costs
Paul Leinwand and Vinay Couto wrote in the Harvard Business Review, “The best-run companies…think of cost management as a way to support their strategy. They put their money where their strategy is and continually cut bad costs and redirect resources toward good costs.”
Though each company has its own unique definition of good or bad costs, NEI recommends programs remain proactive with temporary modifications that reflect shifting trends and business drivers. We review each client program holistically and provide permanent and/or temporary recommendations to reduce costs, including adjustments to program structure, benefits, and/or streamlining processes and administration efforts.
If you would like to discuss this or other trends, please contact your NEI representative at any time and if you found this information helpful, please follow us on LinkedIn for weekly industry updates.