Rewarding loyalty

As of March 2023, Australia’s unemployment rate sits at 3.5 per cent – the second-lowest figure recorded since 2013.

For context, Australia’s unemployment rate peaked at 7.5 per cent in July 2020 – caused by the COVID-19 pandemic – with these statistics highlighting a job market that now favours the employee, rather than the employer.

Which is why attracting and retaining staff is now more important than ever.

Kinmarch Consulting Director Michelle Gilmore, who has more than 20 years of experience as a human resources manager, estimated the cost of replacing an employee to be between three and 12 months of salary.

“When you take into account the recruitment process and how long it takes to get new hires up to speed, it’s expensive to replace employees,” she said.

Therefore, rewarding employees for both their loyalty and performance is bound to have great benefits for retention and morale.

Setting your company apart

Ms Gilmore said rewarding staff for their commitment could differentiate you as an employer.

“People will see the company as actually valuing long service and loyalty,” she said.

“These days so many organisations don’t, and it makes the relationship between employer and employee very transactional.”

Ms Gilmore said some classic ways to reward dedicated employees were via long service awards and growing percentages of superannuation upon each year of employment, as well as emerging trends such as sabbaticals, which allowed employees to take career breaks for long-term travel or study and return to their position once finished.

Going above and beyond

Mining giant Roy Hill is a leading example of a company doing its utmost to reward their employees, with some benefits making news headlines. However, a lot of the lesser-known rewards from the company are what’s keeping staff onside.

“Recognising and rewarding employee loyalty and contribution has been driven by our Executive Chairman Gina Rinehart, who is genuine about delivering real benefits to our people,” Hancock Prospecting Group Operations Chief Executive Officer Gerhard Veldsman said.

“Rewarding loyalty boosts motivation, loyalty and morale, and lets our people know they are appreciated, which all helps with retaining our staff.”

The most well known and unique reward initiative implemented by Roy Hill are Ms Rinehart’s raffles around Christmas and on her birthday in February, where all current permanent and fixed-term employees go into the draw to win one of a number of $100,000 prizes.

The success of Roy Hill is shared with its employees through the raffle, as well as some of majority owner Hancock Prospecting’s profits, with each staff member receiving a cash bonus every December.

“We reward our people with financial payment for every year of service and celebrate and recognise those who have completed five and 10 years of service,” Mr Veldsman said.

While these bonuses and rewards celebrate employees’ loyalty and efforts for the year, Mr Veldsman said this was matched with regular performance reviews to ensure high achievers were also rightfully rewarded.

“These meetings provide clear guidance and mark employee performance against defined goals for the year, ensuring all people are meeting the expectations of their role individually and for the business. It also serves as the basis for the determination of individual short-term incentive payments,” he said.

“This incentive is available to all employees and has been tiered in a way to motivate and encourage people to exceed in their roles.

“We also have a program to allow managers to recognise individual contributions with store gift cards, which can be awarded at any time throughout the year, to an individual who has gone above and beyond.”

Why rewarding loyalty is important

Mr Veldsman said rewarding loyalty was an important aspect of retaining employees, as a significant loss of staff would impact the company’s performance and take resources away from other parts of the business.

“It has an impact on company performance through loss of experience and knowledge, and needing to divert time and resources away to recruit and retrain people, rather than improving initiatives and business priorities,” he said.

Ms Gilmore agreed, saying long-serving employees help to hold corporate knowledge and culture, and lowers corporate risk, with rewards for both loyalty and performance being crucial.

“When everybody walks out of a particular area, really important things get forgotten,” she said.

“Whether you intend to uphold a company with the same culture or shake it up, rewarding loyalty will help to keep it going or bring in a new culture while making sure you do not leave employees behind.”

“Employers can also choose how much they want to emphasise loyalty against performance or rewarding the right behaviours – it’s the modern way to go.

“You can be clever as an employer and choose the right mix.”

For Roy Hill, Mr Veldsman said its blend of rewarding loyalty, individual short-term and company-wide performance kept staff across the board happy with the business.

“Loyalty reward for us isn’t only financial, it’s providing development pathways, meaningful benefits for our people and offering industry-leading facilities to show that you aren’t just talking the talk,” he said.

“We want to keep staff morale high and not rewarding loyalty would not help us to be able to do this.”