Compensation is important, but workers want career development opportunities even more.
Turnover rates in the US continue to rise at an unprecedented rate. More than 64 percent of HR professionals say their organization has experienced more turnover in the previous year than it typically does, and more than one-quarter of them say they aren't seeing a reprieve. Consulting firm Perceptyx surveyed more than 700 HR leaders and more than 2,000 US employees about compensation and retention and found a disconnect between companies' actions and employees' desires.
Most HR professionals report using two strategies to retain employees: company-wide salary increases and retention bonuses. The problem is that 40 percent of new hires who have been with their current employer for six months are earning the same or less money than they were at their previous company.
Compounding the disconnect is that twice as many surveyed workers say they prioritize career development over compensation when deciding whether to stay with an organization. Future career growth and development are two times as likely to lead an employee to change jobs than compensation or benefits.
That puts HR professionals in a difficult position. Perceptyx found that while financial compensation is one of the leading factors in attracting new candidates to apply for a job, it isn't as significant of a reason for job seekers accepting a position. For instance, there's a more than 20 percent gap between compensation making a position attractive and leading to workers accepting an offer. Vacation benefits have the same gap, and healthcare benefits show a 26 percent gap.
When it comes to future career development—a key theme throughout the report—employers believe that holds less appeal to job seekers (around 33 percent). But more than half of employees say it is a reason to accept a position—a 19 percent difference. The opportunity for future career development is also the top reason employees chose to leave their previous job. Healthcare benefits followed at 38 percent, and compensation was lower at 24 percent.
Seven out of 10 employees rated their salaries as fair. An equal number of individuals who recently left a position said the same about their prior salary. Data shows that compensation isn't the leading driver behind turnover. Rather, it indicates companies should focus their attention on career development offerings.