At the end of a second year of pandemic disruption, the impact on the aviation industry continues to unfold. The Great Resignation has begun across a wide range of industries and levels of seniority, and the ripple effect is continuing to spread. Last year, the question on everyone’s lips was “Will companies still pay bonuses?” This year, companies need to look at the bigger picture of how to retain top performers.
Salary is a major factor in retention of course. Competitive pay brackets and incentive raises are one of the larger factors that your staff will consider when deciding to stay or to go.
But it’s not the only one! There are 5 different types of benefits that the Aviation Leasing companies we work with are offering to their staff.
Bonuses and Long-Term Incentive Plans
Despite the financial pressure of 2020, we still saw 60% of aviation leasing companies prioritise bonuses for their staff (source: HES Benefits Report 2020.)
Performance-led bonuses are the obvious way to incentivise good performance and encourage your staff to work hard. A long-term incentive plan can motivate your executives in a similar way. Unlike benefits which are the same for all staff at one level, they can help to attract and retain highly motivated employees.
However, although cash bonuses are great, they do have some downsides. Bonuses and incentives are taxed, whereas other benefits, like a pension, are not. Likewise, some benefits, like working from home and other fringe benefits, reduce expenses that staff would otherwise pay for after tax. That means the money saved on a gym membership or train fares increases beyond the face value of the item.
As such, bonuses alone are usually not sufficient to retain high-performing staff and executives. A combined package of benefits is much more effective.
Pension
Over 90% of Aviation Leasing companies provide a company pension, so it’s essential you make sure yours is competitive (source: HES Benefits Report 2020.) Increasing your employer contribution into their pension pot has long term value to the employee.
The biggest reason for this is the tax saved on money paid into a pension. Employees near to retirement may prefer higher pension contributions to a bonus, especially if they’re already in a high tax bracket.
But even younger employees can understand the value of paying more into a pension earlier in their career. The sooner the money is invested, the more it compounds. A small increase to the employer contributions now can make a big difference to them later.
Paid leave and health care
The statutory requirements for paid parental leave are different across the US, Europe and other parts of the world. This means the way employees approach it as a benefit can vary too. Likewise, statutory healthcare provision varies wildly between regions, which means the expectations of private health insurance vary too.
So, when you’re considering how each of these benefits plays into your employee retention plan, there’s a few things to consider.
Firstly, the impact of the pandemic on family life and health care services has been quite significant. Your employees may be thinking differently about these benefits than they have in the past. It could be helpful, if you run an employee survey, to find out how they feel about their current options, and if there’s anything they’d like to see you change.
Second, it can make sense to offer varying levels of these benefits in different regions.
Typically, companies aim to ensure parental leave is competitive in the employment market their employees are in. For example, Government support subsidises maternity pay in Ireland for the first 6 months, so for staff in Dublin 9 months at full pay is normal. In contrast, paid maternity leave is not mandated or funded by the US Government. This means even a few weeks of paid leave may be harder for employees in Miami to find at another employer. Paid parental leave for fathers is often variable so expectations and preferences will be different here too.
Expectations around healthcare really contrast with those around parental leave! Private health insurance is a normal, expected, essential benefit for most jobs in the US. Staff in Europe, and other parts of the world, see private healthcare as a luxury, not a necessity. Even still, waiting times and quality of service varies in different countries. This means the perceived value of private insurance varies too and can be quite nuanced. If you’re unsure how to navigate this across different regions, it can be helpful to speak to a recruitment partner. An industry specialist, with local experience, can advise you on what’s competitive in that area.
Work from home
In 2019 and prior, working from home, or remotely somewhere else, was a pretty niche benefit. Most employees and executives expected and were happy to come into the office five days a week to work, and work-from-home was more commonly used to retain stellar employees who had a change in circumstances.
Since the first lockdowns began, that has all changed. Many people, who never had the opportunity to work from home before, have discovered that they love it. And even those who still want time in the office are more likely to opt for a hybrid model. In 2020, almost all aviation leasing companies had staff working from home. Only, 53% planned to bring all their staff back to the office as soon as they could (source: HES Benefits Report 2020.)
In fact, one of the driving forces behind The Great Resignation is a mismatch between employees and employers over working from home. If your employees have worked well from home for this long, they’ll need strong justification to for coming back to office full time. And if you won’t offer them the flexibility to work from home, they’ll go somewhere that will!
When it comes to WFH arrangements, there’s only one way to deal with it that will help with retention. You have to make sure they can voice their preferences for their own working pattern, and then do what you can to accommodate them. Of course, you don’t have to accommodate every request! But this is one area where employee retention is less about how much money you spend, and more about how you make your employees feel. If the budget for raises and bonuses is tighter this year, this is one area you can step up your game.
Fringe benefits (gym, food, travel etc)
Beyond the four areas we’ve discussed already, there’s a lot of other smaller benefits that can help you retain staff, if approached correctly.
The most common, among aviation leasing companies, are continuing education (77%) and a gym membership (source: HES Benefits Report 2020.) But we’ve also seen a significant number offering allowances for meals and travel or offering catering and parking on site.
If these are part of a holistic, person-centred approach to employee retention, they can be effective. I mentioned employee satisfaction surveys earlier on – these can be one way of finding out what kind of extras your employees value.
But a gym membership on its own won’t retain an employee who’s been offered a large bonus or better working conditions elsewhere. You’ve got to consider these small benefits alongside the big picture. How happy are your staff, do they feel listened to and valued or secure in their roles, how well are they supported, and what does their overall compensation package look like?
Conclusion
Employee retention, in 2021, has come with a host of new challenges. People are revaluating their priorities and making significant decisions. Their ideas on the work they want to do, how they want that work to be structured, and how they want work to fit in to the rest of their lives are changing. While some employees may follow the trend of The Great Resignation, you can take care not to lose others in the reshuffle. You have to make sure they are well compensated, and that includes their benefits package.
Not all employees want the same things from their benefits package, so it makes sense to cover a lot of bases. If you’re not already, be sure to include
- a bonus or incentive plan
- a pension
- health care insurance and paid leave
- work from home flexibility
- one or two fringe benefits
If you don’t, there’s a good chance you could lose talented employees to a competitor who does. A lot of companies now have gaps to fill and are willing to up their game in a bid to find those replacements.
If you want to up your game too, you can download the Horizon Executive Search 2020 Benefits report. It gives the full picture of the data that we’ve used to inform this piece. And if you’re interested in contributing to the 2021 survey or getting a copy of the report when it’s published, then please do get in touch!