By: Evan Rodd, PayScale
Surges in growth and hiring have created a growing concern about the retention of top talent, as evidenced in Payscale’s 2014 Compensation Best Practices Report.
The report’s findings are based on data collected from more than 4,700 survey respondents, including human resources professionals, business line and executive managers who share their thoughts on compensation, talent retention, and recruiting.
Why Employees Leave
As companies of all sizes begin to recover from the recession, the smart ones are looking for new innovative ways to get smart about employee performance and compensation structures.
In 2013, better compensation was the number one reason employees sought employment elsewhere. As more jobs become available, employees may start to look towards greener pastures, especially if green means more money.
2013 Industry Growth
Information, media and telecommunications companies showed the most development, as reported by 63 percent of respondents from these industries.
Interestingly enough, only 51 percent of respondents from the finance and insurance industry reported financial growth as 13 percent saw a decrease in size.
Respondents from the healthcare and social service industries are the least confident, and 8 percent expect a decrease in financial performance. Across the board, small and medium sized businesses are growing the most in 2014.
A Need to Retain Talent
Many companies are feeling optimistic about fiscal performance in 2014, but only if top talent sticks around. Of the companies surveyed in the report, nearly 60 percent listed retention as a top concern. Additionally, 54 percent of businesses plan to hire in 2014, while 88% plan to give raises.
The Payscale report also states that small and medium-sized companies are the most optimistic about financial performance; many reported a need for market-based, real-time salary data; 75 percent reported some degree of dissatisfaction with their current data and insights. The job skills gap is also a concern, with half of companies surveyed citing the challenge of filling skilled positions.
Industries that experience growth also tend to experience an increased concern in employee retention. Companies are willing to pay more to remain competitive; 88 percent of the companies surveyed intend to give raises in 2014. Small companies reported the highest wage increase of 4.9 percent.
No matter what your financial outlook, here are some key points to consider as you begin to reevaluate your compensation strategy. If left ignored, you may need to open the doors for new hires.
- Retention has continued to remain a top concern for many organizations. Even if you aren’t concerned now, your competitors may be. Additionally, salaries will increase across various industries, so up-to-date data and insights are crucial.
- While there is still some debate regarding The Fair Minimum Wage Act, 40 percent of companies surveyed are in favor of a $10.10 minimum wage.
- The majority of respondents, regardless of company size, chose to either maintain or increase their organization size. Larger companies are the most likely to downsize, especially in industries where wage growth is slow.
- 23 percent of respondents indicated their organization grew by 0-5 percent since January 2012, and another 23 percent report growing 6-10 percent.
- Many respondents indicated that school reputation is less influential when it comes to hiring decisions; 40 percent felt experience is more important, while 31 percent value skill set over pedigree.
A Gap in Growth and Hiring
Even with the projected growth, companies are treading cautiously when it comes to expansion and hiring. Half of respondents agree with the statement: “There is a lack of qualified applicants for our open job positions,” indicating that the skills gap is still a big concern for many business leaders.
Although there may be a greater demand for in-demand positions, the talent is not necessarily available to hire. Large companies seem to really be feeling the pinch, as 50 percent reported having positions open for six months or more, compared to their small and medium counterparts.
Social Media in the Workplace
Beyond compensation, social media usage in the workplace is another area where companies are beginning to evaluate employee usage, and recruiting potential.
Larger companies are most likely to have a formal social media policy in place, while small and medium-sized companies reported a more relaxed attitude in regards to employee social media access. 61 percent of respondents in PayScale’s report indicated that social media was an important recruiting tool.
Regardless of industry or size, it seems that many companies are looking to grow and expand their workforce in the coming years, with the demand for fresh data being vital to maintaining a strong workforce.
Take a look at Payscale’s 2014 Compensation Best Practices Report to see how your industry performed.