In a world of fickle consumers and runaway inflation, employers are under immense pressure to retain their top talent. This is particularly true for employers in the financial services industry, where the competition for talent is cut-throat and employees are highly sought-after commodities. Banks are searching for ways to retain their highly skilled staff and offer them lucrative career opportunities, while also providing a fulfilling life for themselves. 

One avenue banks are exploring to achieve this is offering attractive benefits packages and an inclusive culture, something that the employee retention credit aims to encourage.

The Employee Retention Credit

A few years back, employers started to see a problem. The cost of employing someone was rising, but so was their productivity. It was clear that these workers were vital to the company and played a crucial role in keeping the business afloat, so their employers would continue to offer them attractive packages and pay them accordingly. 

The problem was that many companies could not afford to keep paying these inflated wages. As a result, they started to see a drop in productivity and engagement levels. If companies were to survive and thrive in today’s world, they needed to find a way to reverse this trend.

To tackle this issue, firms have started to trial and implement innovative policies aimed at retaining their employees. One such initiative is the Employee Retention Credit. This is a type of loyalty credit scheme that rewards employees for staying with the company. Incentivising employees through non-monetary methods is proven to increase productivity and engagement – two pillars of a successful business.

How Does It Work?

The Employee Retention Credit works on a like-for-like basis. This means that for every hour (or part of an hour) that an employee contributes above and beyond their contracted hours, the employee is able to claim back a certain amount from their employer. The aim is to help employers afford to pay their employees enough to keep them happy and motivated, while not having to worry about unaffordable payroll costs.

The amount of the credit that an employee is able to claim will be based on the number of hours (or parts of an hour) that they contribute above and beyond their contracted hours. For every hour (or part of an hour) that an employee stays above and beyond their contracted hours, they are able to claim back a certain amount from their employer. This amount depends on how many hours the employee contributes above and beyond their contracted hours. To calculate this credit, simply divide the total number of hours (or parts of an hour) that the employee contributes above and beyond their contracted hours by two.

When Does It Start And Stop?

The Employee Retention Credit starts from the beginning of the first hour that the employee contributes above and beyond their contracted hours, and stops when the employee quits or is dismissed from the company. The employee has to provide evidence of their continued employment throughout the year, in the form of a payslip, in order to be able to claim back any credits that they have accumulated. This is to prevent employers from taking advantage of employees who may have been under the misconception that the program only applied to the hours that they spent at work.

Where Can I Find Out More?

If you’d like to find out more about the Employee Retention Credit, you can contact the CBI (formerly the Commission for Employment and Skills) who currently administer the program. You can also visit the CBI’s website to read up on the legislative framework relating to the program. To find the contact details of your local branch, please visit the CBI‘s website.

The Employee Retention Credit is a promising scheme that aims to tackle the declining engagement and productivity levels experienced by so many businesses across the country. Offering employees additional pay to stay with the company and use their skills is a step in the right direction. This type of scheme allows employers to retain the staff that they value most, while also satisfying the employees’ desire to be financially rewarded for the value that they add to the company.