Score more with a longer stay
New economy companies are paying out 25-30% as cash bonuses if employees stick on.
By Shreya Biswas, TNN |
NEW DELHI: Faced with rising attrition and frequent job hoppers, companies are exploring ways to keep their employees hooked and engaged while delaying their departures. From innovative insurance schemes, subsidised degrees and diplomas from top-notch colleges to deferred bonuses and in-house mutual funds, compensation experts and companies are doing all they can to retain their employees. Especially, high attrition sectors like retail, telecom, financial services, IT and ITeS are party to these innovative schemes.
For companies not listed on stock exchanges, shadow options are being used to retain employees. Candidates are being provided the book value of the shares over a period of 3-5 years, a part in third year, a part in fourth year and the rest, if you stick on for the fifth consecutive year in the company. Kicker bonuses - performance-linked bonuses paid over a staggered period - are also being used for the senior management. Retention bonuses have worked well for companies in reducing attrition. “It worked when Gecis and BPL Mobile were being sold. People were asked to stay on for 18 months and promised huge bonuses.” says EMA Partners International’s managing partner K Sudarshan.
The high-growth retail is another sector that is experimenting with some of these retention schemes. Two months back, Pantaloon Retail introduced a unique insurance plan, where relatives of an employee, in the event of death, get the pay package as the insured sum for the service period left in the company.
Pantaloon Retail HR head Sanjay Jog says: “This is particularly beneficial as the pay packages are revised at equal intervals. It has received immense response from the employees and families.” It is specifically targeted to the top three levels, starting from store managers.
Subsidising management development programmes are also drawing attention among employees. Companies are doing it for entry level and mid-management candidates. Some even sponsor the spouses along with employees for management programmes at Harvard, and pay back a certain percentage of the fees after completing the course and returning to the companies.
GE Money is an case in point. It has tied up with Mudra Institute of Communications, Ahmedabad, to offer a marketing course for graduates who have spent more than 6 months in the organisation. About 75% of the fees for the one-year course will be reimbursed if they stay back. Pantaloon Shishya, an employee training and development program, has helped it control attrition, the company said. But nothing compares with the cash-based plans. Mercer India’s human capital product solutions business leader Gangpriya Chakraverti says, “New economy companies are paying out 25-30% as cash bonuses if employees stick on for 12 to 24 months.”
For companies not listed on stock exchanges, shadow options are being used to retain employees. Candidates are being provided the book value of the shares over a period of 3-5 years, a part in third year, a part in fourth year and the rest, if you stick on for the fifth consecutive year in the company. Kicker bonuses - performance-linked bonuses paid over a staggered period - are also being used for the senior management. Retention bonuses have worked well for companies in reducing attrition. “It worked when Gecis and BPL Mobile were being sold. People were asked to stay on for 18 months and promised huge bonuses.” says EMA Partners International’s managing partner K Sudarshan.
The high-growth retail is another sector that is experimenting with some of these retention schemes. Two months back, Pantaloon Retail introduced a unique insurance plan, where relatives of an employee, in the event of death, get the pay package as the insured sum for the service period left in the company.
Pantaloon Retail HR head Sanjay Jog says: “This is particularly beneficial as the pay packages are revised at equal intervals. It has received immense response from the employees and families.” It is specifically targeted to the top three levels, starting from store managers.
Subsidising management development programmes are also drawing attention among employees. Companies are doing it for entry level and mid-management candidates. Some even sponsor the spouses along with employees for management programmes at Harvard, and pay back a certain percentage of the fees after completing the course and returning to the companies.
GE Money is an case in point. It has tied up with Mudra Institute of Communications, Ahmedabad, to offer a marketing course for graduates who have spent more than 6 months in the organisation. About 75% of the fees for the one-year course will be reimbursed if they stay back. Pantaloon Shishya, an employee training and development program, has helped it control attrition, the company said. But nothing compares with the cash-based plans. Mercer India’s human capital product solutions business leader Gangpriya Chakraverti says, “New economy companies are paying out 25-30% as cash bonuses if employees stick on for 12 to 24 months.”
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