Despite the ongoing skills shortage, a new survey shows that attracting talent is seen as the least important purpose of a remuneration strategy, with only 2 per cent of business owners placing value on it.
Despite the ongoing skills shortage, a new survey shows that attracting talent is seen as the least important purpose of a remuneration strategy, with only 2 per cent of business owners placing value on it.
Despite the ongoing skills shortage, a new survey shows that attracting talent is seen as the least important purpose of a remuneration strategy, with only 2 per cent of business owners placing value on it.
Remuneration strategies are not being used strategically, according to the Grant Thornton International Business Report (IBR). The survey also shows that less than one third (30%) of business owners are using remuneration and reward strategies for the sole purpose of retaining their staff.
When asked to rank the top objective of their remuneration strategies, staff retention was seen as most important by just 30% of businesses, followed by maintaining a positive staff attitude (19%).
The survey* of 250 Australian business owners of medium to large corporations, also reveals incentivising performance in line with Key Performance Indicators (KPIs) ranked as a low priority for the remuneration strategies of business owners (8%), as did growth in sales (11%). What's more, two per cent of businesses have no remuneration strategies in place at all.
Tony Markwell, National Head of Private Business Services, Grant Thornton, said:
"Whilst staff retention is seen by business owners as essential, it is surprising to see that so few businesses use remuneration strategies for this purpose, despite the obvious impact on the bottom-line.
"What is even more astounding is that only two per cent of business owners recognise that a competitive remuneration package is a key driver in attracting high calibre staff. In the face of the current skills shortage, business owners need to be doing more to attract and keep the best people and smart remuneration strategies must be a key part of this," said Markwell.
Of the businesses who participated in the survey, having the best people (18%) ranked as the most significant factor that has made their business better than their competitors, followed by world class service (14%) and the ability to adapt and respond to market needs as necessary (13%). Some owners also indicated their product (9%), brand (7%) and customer loyalty (4%) as reasons for success in the market.