The job market is always hot for key talent, says WorldatWork’s Kerry Chou, and with the economy improving, it’s just going to get worse.
Chou, who is Senior Practice Leader, Compensation, at WorldatWork, offered his tips at WorldatWork’s Total Rewards 2013 Conference and Exhibition, held recently in Philadelphia.
Why Key Talent Leaves
Employers are always concerned about retaining top talent, says Chou, and most are getting a little more concerned as the economy brightens. However, the truth is that the job market is always hot for key talent.
Here’s what a recent WorldatWork survey shows are the top reasons that key talent looks elsewhere:
1. Better Pay
The number one reason key people leave one employer for another is for better pay, says Chou. There is a widely held perception that people leave because of their managers (“Employees come to the organization for better pay, but they leave because of bad management”), but that theory is not supported by the research, Chou says.
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The research shows that top performers are more likely to leave over pay than over having a bad manager or any other reason. (That doesn’t mean you can ignore bad managers.)
2. Lack of Promotional Opportunities
Key workers are always thinking about their careers and what’s next for them. If they don’t see opportunities ahead in your organization, they’ll certainly be looking else- where.
One of the common problems Chou sees is “stacking.” That refers to the situation where older workers with the more senior positions, who in former times would have retired to make way for the next generation, are still there at work. That leaves key talent stagnated at lower level jobs longer than they want to be, and that’s not a good place to be from a retention and engagement standpoint.
3. Perceived Pay Inequity
The third most common reason for key players to leave is perceived pay inequity versus colleagues. (External pay equity is covered under reason #1.)
There is a lot of research to show that high-performing employees appear to be particularly sensitive to whether their higher performance is rewarded with above-average pay increases, while low performers prefer low-contingency pay systems, says Chou.
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Fortunately, some experts believe that it’s not so much the dollar amount of the difference as much as the fact that there is a significant difference.
The average difference now is about 50 percent, but Chou recommends 200 percent. (More on that in tomorrow’s Advisor.)
Research also shows that people with a high need for achievement and higher feelings of self-efficacy prefer pay systems that more closely link pay to performance, says Chou.
4. Dissatisfaction with Job or Responsibilities
High performers want to be learning and growing on the job. If they feel stagnated or if the job is just boring, they will be thinking about moving elsewhere.
In tomorrow’s Advisor, more pay equity questions and answers, plus an introduction to a handy collection of prewritten HR policies.
Interesting. These results seem to run counter to all of those surveys we hear about that say pay isn’t the top consideration–that employees care about how they’re treated, etc., just as much or more. Or is this focus on pay perhaps specific to “hot talent”?
I think there are 3 main factors that affect people’s committment and if one or more of the factors are missing, then people start looking for other opportunities; Those factors are: Like what you do, Like who you work with, and trust who you work for.
Jim
I agree with Barb – surveys I’ve seen and my own experience in HR tells me that pay may be a deciding factor in taking another position, but one of the root causes of beginning a job search is their relationship with their manager.
…and the first people to eye the exit sign will be your top performers. We recently posted a 3-part blog that detailed the reasons and common sense, cost effective actions that business can take to keep the people you want to keep. Check out the three blogs at http://www.affintus.com.
Re: pay as a driver – Pay by itself tends not to motivate someone to look for a new job – surveys conducted over the last 60 years show pay generally in the top five reasons to leave, but not at the top. If pay keeps pace with similar positions in the geographic area, the effect of pay on the decision to quit is reduced. But combine pay issues with the absence of opportunities for growth and ineffective management practices and you have a recipe for voluntary turnover.
Could you site what “the research” is that does NOT support that employees leave primarily because of their managers. As Barb referenced already, this is contrary to everything that we are seeing, or is this compensation research. Certainly I think the overall need that is driven is to feel valued and appreciated, and that can be measured by compensation, but it can also be measured by so much more and this is rather groundbreaking if there really is valid research out there now that’s stating people really are in it primarily for the dollars above all else.
I’m also surprised to hear #1 is pay. Was this survey conducted by employees who resigned, or by employers responding about employees who resigned? If it’s the later, and exit interview information was used, this survey may skewed by “politically correct answers” provided in exit interviews.
I’m curious where, “Employees leave managers, not jobs” comes in now.