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As the Covid-19 pandemic enters its third year, New Zealand employers are likely to face one of their biggest challenges yet. Coined the “Great Resignation”, it is predicted that many employees who stayed put in New Zealand during the pandemic may be getting ready to jump ship and/or head overseas in 2022.

This is unsurprising, given the Government’s pivot from Covid-19 elimination to one living with the virus, and the subsequent reopening of our borders. This raises the questions; can employers do anything to prevent it? Are there lawful ways to try and retain staff during this time?

While employers certainly cannot stop employees from resigning, there are several measures that can be taken to incentivise staff to remain in their employment. It is generally acceptable to take such measures, provided that they are fair and reasonable, and proper processes are followed. Broadly speaking, any arrangement to retain staff should also be in writing and signed off by both parties.

We outline some retention options that you may want to consider as an employer below:

  • Identify roles in your business that are in high demand and check whether the market remuneration for those roles has inflated recently, and adjust accordingly if so.
  • Identify any key staff to your organisation that you want to retain, for example, they may hold a particular skill set or knowledge that is crucial to your business. Now is a good time to check in with these people and to offer them something that is above and beyond their existing package to incentivise them to remain employed. For example, a retention bonus, a one-off bonus, a health and wellness stipend, a phone allowance or additional annual leave. It is important that any bonus or additional payment made is recorded in writing with all implications carefully considered.
  • Review your current HR practices and work arrangements to ensure that they are reflective of the ‘new normal’. For example, the demand for more flexible working arrangements has increased significantly since the pandemic and many employers have introduced working from home policies. Such flexibility would not only enable you to hire applicants who have otherwise been beyond reach, but your existing employees may find it a benefit worth staying for. Of course, you must always consider any flexible working request made by an employee regardless of whether you have a policy or not.
  • Bond employees to your employment for a period of time in return for a benefit. Common examples include agreeing to pay for further training or education for staff, agreeing to top up the Government-funded parental leave payment or offering sabbatical leave in exchange for the employee agreeing to remain employed for a fixed period of time. In any event, you must not bond an employee without consideration or for an unreasonable period of time (generally not more than two to three years).
  • Get creative and think of other ways to keep your staff happy. Further benefits may relate to, for example, the community, the environment, or staff health and wellbeing. These things don’t need to cost money, but can be about creating a workplace culture that employees know will be hard to replicate elsewhere.

With the Great Resignation looming, now is a good time for employers to communicate with employees and align benefits and compensation with their priorities (keeping in mind that some priorities may have changed since the pandemic). This will require employers to step up and think outside the box, particularly in industries that are highly competitive or those already facing staff shortages, such as registered nurses in the aged care sector.

Regardless of how pressed a business is for staff, employers must be careful when creating terms around someone’s employment. If you would like further advice on any of the above retention measures, please contact a member of our specialist employment team.