Content provided by a guest contributor.
If your business is serious about attracting and retaining talent, it must factor in these hard knock realities:
1. The Law of Supply and Demand
Economics 101: assuming that all other variables are equal, the higher the demand for labour (scarcity), the higher the remuneration offered and vice versa. Easy in theory! While the economic tsunami has wrecked demand and remuneration offers in the short term, the war for talent will still be around in 2020. The demand for individuals that possess an ever increasing skill set, to occupy jobs of the future will push remuneration up.
2. The Skills Shortage in SA
Closely linked to the above, is the ongoing skills shortage in this country. (I will ignore those on the fringes that claim that there is no skills shortage). The majority camp has been pressing the panic button for years – there remains for example, a shortage of accountants, artisans, doctors, drivers, engineers, programmers, teachers, nurses and teachers.
Given the time required from pre-school until one qualifies in some of these fields, the time taken to gain experience and eventually practice competently, fills the skill gap could well take a generation.
3. Government, Regulators & Unions
Government and regulators are going to be busy for a long, long time. We need an education system that works for business, an employment friendly dispensation to promote job creation, effective skills development, favourable taxation of employment income and a functioning public healthcare and retirement system.
It will have far reaching implications for business performance, earning your keep and securing your future. Trade unions champion the basic protections of employees, pay and benefit inequities and job security. In 2009, employers experienced unprecedented union action on these issues and I expect more of the same in coming years. Employers should expect to be challenged especially on the remuneration and benefits front.
Once upon a time, the world ran on a single clock, engaged only in the physical domain and hoarded information. Information technology arrived. It brought servers, computers, cell phones, software and cyber world. Now, we live on 24 hour online clocks, surf new life in a virtual worlds and openly share information. Technology has irrevocably changed how we think about work, talent and reward.
Going forward, it means better reward and payroll administration, benefits reporting, e-learning and performance tracking. We will also need to overhaul traditional reward programmes, and incentives, on account of work and performance no longer being confined to the office.
Revenue – Cost of Sales = Gross Profit – Expenses = Profit before Taxation
Accountants will tell you this is an oversimplification of their recording, analysis, treatment, reporting and disclosure of financial transactions. That would be fine, if the business owner and every employee was conscious of this reality and aligned their performance to the bottom line.
How many employees in your organisation can explain exactly how the business makes money? What is the contribution of your reward strategies to profitability, especially as organisations prepare for the upturn? (If you don’t know, get started today!)
In conclusion, these hard knock realities, are alive and kicking. To attract and retain talent, your business should understand each reality, factor it in the business and astutely navigate the challenges ahead.
The content in this article was provided by Yusuf Mahomedy (CA(SA), AdvTax). This article is adapted from his latest book, Smart Reward Strategies – Authentically Attract and Retain Talent