27 May How to Save $32,500
If I could tell you how I can save you $32,500 would you be interested? I thought you might!
Did you know that to recruit an employee with a salary of $65k (inclusive of super), you have to add an extra 50% minimum on top of this figure (yes, that’s the $32.5k!), when you calculate all the on-costs such as:
- Recruitment agency fees
- Advertising fees
- The cost of time the role remains vacant
- Time to conduct the interview process
- Time for other employees to cover the vacant role
- Time lost for employees to train up the new individual
- Time for the individual to become fully productive
- Payroll tax for some
A smarter way to address this cost is to ensure that your employees – especially your best employees – don’t want to leave you. Then you only need to recruit to achieve growth.
Here are some ways that you can develop a great Reward and Recognition strategy.
- Compensation – the first and most obvious one. Employees need to be appropriately renumerated for their efforts, as a minimum. There are usually government directed minimum rates of salary and, in Australia, you can determine the minimum rates of salary from your Modern Award. Please note there are considerable penalties for getting these rates wrong, so double check that you are paying your employees legally.
- Increased Superannuation – this can be very attractive, especially for women who are typically under-funded, when it comes to their retirement savings – as a result of lower earnings and taking time out for raising children. This can have tax benefits for both the employee and employer, but do check the finer details.
- Promotion – many employees are very much driven by the opportunity to progress their career. I often hear from SMEs “but this is impossible with a small business”. Yes, it’s more challenging – granted – but don’t undervalue the opportunity to teach them what you have learned over the years. At least have the conversation with the employees, so you know if this might keep them with you.
- Share Plans – can be complex and have tax implications, so you definitely need to take legal advice before going down this track BUT it can be very attractive to employees and there is often an uplift to productivity, ownership and accountability as a result.
- Profit Sharing – this is generally less complex and can be as simple as saying, ‘if we get a profit of $700k this year, we’ll look to evenly divide $100k between the team. Watch the enthusiasm and teamwork grow as a result.
These are some common ways to look at your R&R strategy – which ones do you use now? If you would like some help to prevent your best employees from leaving you – ask us today.