Are you aware enough with the fact that a growing job market in the New Year will serve to shift the balance of power in
favor of the employee, leaving the door wide open for employees to jump ship to a better opportunity elsewhere.There are five things that human resource managers do not know about how their employees are thinking in present time:
The Majority of Employees Are On the Hunt For a New Job In fact, the number of employees who describe themselves as "very likely" to leave their current job has increased more than 50% in the past year, as compared to Salary.com's last year research.
The Most Productive Workers May Be The First to Leave It is also true that companies are most likely to lose employees who have been in their jobs between three and ten years. This is considered to be the period of an employee's tenure when his/her productivity is likely to be the highest. If realized, excessive turnover in this group could have large soft costs to
employers. Taking into account that HR professionals estimate turnover costs to be about 30% of the annual salary of the person being replaced, this potential mass exodus of employees could significantly hurt a company financially.
Relationships, Not Compensation and Benefits, Matter Most At Work "Knowing what is important to employees can enable a new kind of dialogue between HR and their employees. This can significantly help to reduce employee turnover and replacement costs", says Bill Coleman, Senior VP of Compensation at Salary.com.
Employers, who generally regard compensation and benefits as the keys to employee happiness, have to realize that good relationships are actually the primary thing that their employees covet at work. Salary.com's survey showed that employers are focusing on the wrong issues while trying to bolster employee retention.
Human resource professionals list the top factors of employee happiness as:
(1) Adequate Benefits (2) Friendly Coworkers (3) Fair Compensation (4) Good Managers
(5) Compatibility With Corporate Culture
On the other hand, employees rate the top five factors in overall workplace happiness as:
(1) Friendly Coworkers (2) Good Managers (3) Desirable Commute (4) Adequate Benefits (5) Good Working Hours
This proves that the factors employees value the most at work, such as friendly coworkers and managers, a short commute and good working hours, are much more work-life oriented than employers think. Fair compensation was not even in the top five factors of overall workplace happiness. When thinking about retention and recruitment issues, HR managers should look beyond benefits and compensation to the factors employees care about most.
Many Employees Wrongly Believe They're Underpaid Ironically, when asked, "What makes you want to leave your current job?" employees report inadequate compensation as the most significant factor. The other top factors included: no opportunities for advancement, no recognition, boredom ,insufficient benefits
Employers are on track when it comes to knowing the reasons why their employees are leaving, also citing inadequate compensation, no opportunities for advancement, and no recognition as the top three reasons employees leave.
The disconnect here lies in the fact that the majority of these employees who are looking to leave their company because they believe they are underpaid are actually not underpaid at all. Salary.com found that less than 20% were actually underpaid, meaning that the majority - more than 80% - were not.
From a human resources standpoint, HR managers should strive to educate employees on proper job description matching, benchmarking, and why they are paid at a certain level. Human resources holds the responsibility of making sure that employees have an accurate job title and job description based on job duties. These benchmarks should match a corresponding salary, while the company's pay philosshould also be clearly articulated.
Counter-Offers May Be Worth It When it comes down to it, it is always going to cost employers more to replace employees than it would to keep them. On average, HR professionals estimate that turnover costs are about 30% of the annual salary of the person that is being replaced. Conventional wisdom suggests that the actual cost could range from a minimum of 50% to several times the incumbent's annual salary, depending on the individual being replaced.
Salary.com also asked employees to name the minimum salary increase required to keep them in a current job that they are dissatisfied with. The results showed that employers might be able to stave off turnover with salary increases between 6% and 12%, depending on the reason for the employee's dissatisfaction. Despite potentially astronomical turnover costs and a relatively low monetary threshold for an employee to stay, one-third of employers still never make counter-offers. Those that actually do make counteroffers do it infrequently and offer only an average of 8.4%.
Although one might be inclined to think that an across-the-board salary increase could solve a lot of problems, this is not practical, and in the long-term, dissatisfaction would probably return. These number do, however, shed some light on what it would cost in salary dollars to overcome individual employee satisfaction problems.
Coming time is the time of the employee, so look for HR professionals to mind the gap between employee and employer thinking in order to meet their recruiting and retention goals.