For anyone looking to find a practical example of the economics of supply and demand, look no further than the talent market.

Buffeted by two years of pandemic disruption, employees across all demographics are recalibrating their view of work and rescinding their jobseeker status in a shift that carries various implications for employers.

Most pressingly, it has created a significant recruitment challenge for companies with roles to fill. Indeed, almost two thirds (65%)of companies surveyed for the CIPD’s Labour Market Outlook report anticipate they will have problems filling vacancies in the next six months.

And because there are noticeably fewer candidates knocking on the front door of a business, employers are placing greater importance on retaining their existing talent and ensuring they don’t leave via the back. Wage rises might be an important part of this equation, but in the face of inflationary cost pressures, this is unlikely to be a strategy companies can pursue over the long term.

Levers for employee loyalty

There are more sustainable alternative approaches to building employee satisfaction and loyalty, including attractive packages of employee benefits or a positive company culture. Interestingly though, employers are increasingly finding that the crossover between these two areas – benefits and culture – is where real results can be delivered in terms of engagement.

In this space, there is a more ‘horizontal’ colleague-to-colleague dynamic in contrast to the more traditional, ‘vertical’ employer-employee dynamic of days gone by. It draws on our instincts as social animals to look across and take note of what our peers are doing and saying – and sometimes prioritising that over the messages that come from the leader of the pack.

Various studies have highlighted the importance of peers in driving engagement levels, and many companies are putting this theory to effective use in the form of peer recognition programmes. These can range from facilitating praise among colleagues using ‘Email High Fives’ to peer involvement in annual reviews and even peer-nominated bonus awards, as employed by Google “to recognise a fellow Googler who has gone above and beyond”.

Applying social laws to benefits

This social model makes sense in the context of a workforce who are likely to already be connected with each other via platforms such as LinkedIn and Facebook, and who are not only comfortable drawing on social sources as part of their media and information mix but increasingly expect this to be the case.

Concepts that apply on social media can, therefore, be successfully channelled by employers in relation to the promotion of employee benefits. An example is FOMO – the fear of missing out – which is a powerful force within social groups, who naturally tend to conform and converge on agreed points of advantage.

As such, in the context of employee benefits, one colleague might feel compelled to learn more about their pension contributions or find new appreciation for the value of their healthcare cover if they can see that others are engaging with, and deriving value from, those benefits in a way that they are not. Testimonials and leaderboards are examples of mechanisms that companies can employ to help achieve this aim.

Another example is the expectation that information is shareable – a concept inherent to social media. While some employers might be reticent to cede some control in this area, the growing influence of platforms such as Glassdoor highlight how sharing will happen anyway, irrespective of whether it is within the company’s walls or not. This means there can be a benefit to providing the workforce with the tools and platforms to communicate amongst themselves within a safe, shared space.

A way to unlock wellbeing

Perhaps one of the most crucial areas where the intersection of employee benefits and company culture delivers real advantage is in the area of worker wellbeing. In recent years, this area has come to the fore as a key priority for both employer and employee, amplified by the personal challenges that some have experienced from the requirement to work remotely, such as growing feelings of isolation.

Providing healthcare benefits that support workers in this area can be delicate, given that it can touch on sensitive areas such as mental health. However, this only serves to underline the importance of delivering such offerings within a complementary company culture, where colleagues feel that benefits are genuinely aligned with any statements of intent made by company management.

Ultimately, employers will remain responsible for successfully engaging and retaining their talent, but sharing some of this responsibility with the workforce could empower individuals to higher levels of engagement while enabling them to inspire others to the same.

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