C-Suites view compensation and retention as their top internal concerns for 2019, according to a global survey by the Conference Board. The numbers are based on a survey of over 800 CEOs and over 600 other executives, primarily from the United States, Asia, and Europe. Participants weighed in on the top business challenges facing their organizations in the future, and their strategies for meeting those challenges.
Robust Job Market Equals High Quit Rates
The Job Openings and Labor Turnover Survey report for April show the quit rate is at 2.3 percent—which equates to 3.5 million people that quit their jobs in the past month. The quit rate hasn’t hit a peak this high since 2005 and it could be the renewed confidence in the job market. The job openings rate remained steady at 4.7 percent, while the number of hires came in at 3.9 percent.
Employees hold the keys in a healthy job market and factors like compensation, company culture and engagement will be enough to force people to look the other way when their current employment situation does not meet their standards.
As the economy remains healthy, employees become increasingly unhappy with pay—in fact, employee perception of fair pay has declined from 57 percent to 52 percent over the past years, and the idea that pay is monetarily linked to performance has dropped from 55 percent to less than half at 44 percent, according to a Mercer/Sirote analysis of employee satisfaction data.
Onboarding and Retention
Dr. Frederick P. Morgeson, Ph.D., professor at Michigan State University said that onboarding provides an opportunity to set clear expectations and objections at work, as well as help new hires adjust to the social and performance aspects of their jobs.
A study from Society of Human Resource Management showed that 69 percent of employees are more likely to stay with a company for three years through a great onboarding process, while over half (58 percent) are more likely to be with the organization for more than three years.
Twitter attempts to mitigate this with a 75-step ‘Yes to Desk’ program where handoffs between HR, Recruiting, IT and Facilities occur quickly and seamlessly. New hires have dedicated time with senior leadership every month and receive a rotating schedule of presentations on Friday afternoons so the newest team members can absorb projects around the company.
According to a different survey by SHRM, the average cost per hire is $4,129 (hiring, onboarding, training, etc.) and the average time to fill a position is 42 days. Although the reasons for employee separations vary, improper salary valuations ranked fifth of the top five categories that workers cited for leaving their current employee.
The financial impact of employee loss has been seen to be substantial. On average, one-fifth of an employee’s salary can be reallocated to recruiting and replacement. When broken down by seniority, the average cost to replace an entry level employee is roughly 16 percent of the annual salary and upwards of 200 percent of an annual salary for executive positions.
With a job market more abundant than it has been in decades, the opportunity to jump ship and land in a better employment situation is here. Employee onboarding, constructed to delight new hires from day one, may prevent hiring teams from spending more money to fill holes that displaced workers create.
With the job market as plentiful as it has been in decades, the opportunity to jump ship and land in a better situation is there. Today, employees hold all the cards in the deck and with the options available, businesses will have to go the extra mile to keep their workers in their desks.