For HR professionals it’s crucial to understand what drives different segments of employees to consider jumping ship, even if they’re happy – or worse, stay even when they’re not happy – and what it takes to keep a diverse talent pool engaged and performing at their best throughout their careers.
A survey was conducted by The Nielsen Company through its online research panel over five weeks in the summer of 2018 asking 2000 full-time employees in North America about their relationship with their current employer and their career plans. Below is a summary of the findings.
When the grass looks greener
When it comes to retention, complacency may be an organization’s worst enemy. The survey shows a large proportion of respondents have roving eyes. Only slightly more than one in four employees surveyed (27%) say they have no interest in a job outside of their current company. While 37% of respondents are looking either actively or casually, the other 36% would still consider a new position if they were approached.
Even “happy” employees could be swayed with a competitive offer
But some kinds of employees may still be a higher flight risk than others. The survey revealed that among 18- to 24-year-olds, 55% of respondents are pursuing new positions (actively or casually), compared to 39% of 35- to 49-year-olds, although another 41% are still likely to answer calls from a recruiter. Their interest in devoting time to finding new work is generally lower, but their loyalty can be tested.
Start strong to go long
One of the most striking lessons in the research is that cultivating loyalty and engaging employees must begin at the very outset. When asked how many more years they would like to work for their current employer (in contrast to the optimal time frame for staying at any employer that keeps them happy), there is a significant drop between those within their first year of service and those in the first to fifth years. In other words, when the honeymoon ends and they start to weigh their options.
Build the case for retention early and often
In fact, most employees can determine within the first year of a new job if they are going to stay long term – and the younger the hire, the more decisive they are. More than three quarters of respondents aged 18 to 24 will discern before their first anniversary the prospects for a long-term employment relationship.
Why employees leave
Not surprisingly, financial compensation is the leading reason cited by all age segments for leaving their last job, although 37% of people aged 18 to 34 responded this way, compared to 28% of people 35- to 49-years-old, and 24% of those 50-plus – a trend that aligns to role seniority.
However, it’s not all about the pay. Employees surveyed also consider how interesting their work is, among other factors that rank nearly as high, including the level of respect they received and the opportunities they had for taking on more responsibility. For people aged 18 to 34, the issue of expanding their scope was a slightly more common reason to leave (18%) than whether they were respected (17%), had interesting work (16%) or had “terrible” benefits (16%). Among respondents in the 35-to-49 cohort, 28% left due to their pay, but 16% said it was due to a poor relationship with their manager, the same proportion as who said the work wasn’t interesting.
Why employees stay
When asked why they remain at their current job a different range of priorities emerge. When respondents could choose multiple options, benefits were the commonly cited reason (30%), just ahead of pay (29%), their relationships with colleagues (28%) and job security (27%).
But what if they are asked to pinpoint the single most important aspect for staying, above the other factors they selected? More people said they love what they do (15%) over other reasons. Salary, job security, benefits, and work flexibility were all less common responses, but made the top five.
There are a few takeaways from this. First, it seems on the surface to be a promising indication that more employees stay because they find their job interesting – isn’t this what we all strive for in our careers? However, only 15% of people responded that way, which suggests a low level of engagement. While not all work is going to deeply nourish one’s spirit, organizations need to find ways of challenging and stimulating employees. Providing a larger sense of purpose helps to drive not only loyalty, but also performance.
How jobs satisfy
Everyone grumbles about their work some days, but the research shows that most respondents are generally happy at their jobs. As noted above, 77% report they are happy. However, some interesting distinctions stand out by classifying respondents by the different career stages. For instance, as employees get older, they become less satisfied with their jobs. While that may not be surprising, it does raise the question for organizations with aging workforces.
The factors that make a difference
What aspects of work life contribute to job satisfaction? The research found that those who are permitted to work from home and work for a company that offers training are more likely to indicate happiness with their jobs. Similarly, those who work in a traditional office setting are found to be happier than those who work in modernized office settings such as open-concept, virtual or co-working offices.
Several other aspects of work life are more closely correlated with job satisfaction and retention. Three-quarters of employees surveyed (75%) work at a company that provides resources for learning – anything from workshops and virtual webinars to attending formal classes. Those who do work for such a company are more likely to feel happier with their jobs (83%) and stay longer (7.8 years) than those whose companies do not (58% and seven years, respectively). In fact, 86% of respondents say it’s important for employers to provide learning opportunities – 51% say extremely so – including 91% of 18- to 24-year-olds, 93% of 25- to 34-year-olds, and 90% of 35- to 49-year-olds.
An organization can recognize an employee’s contributions in a few tangible ways, such as a bigger pay, more responsibility (with or without a new title) or more opportunities to work on new projects. This study reveals that when it comes to compensation and promotions, companies and employees often see things differently. For HR professionals, this presents a challenge – employees that don’t think their work is properly valued or appreciated will not feel loyal to the company, nor put in the best performance.
For example, only 58% of employees surveyed feel they have had adequate pay increases based on the amount of time they’ve been at the company – although 65% of people think they’re paid fairly in relation to other people at their company with similar job titles. What do they expect? According to the survey, respondents expect a median salary increase of 5% a year, although those who have been with their organizations between three and 10 years, as well as those with higher seniority, expect a 10% increase in annual salary.
Climbing the ladder
Similar misalignments are evident regarding promotions. Only 52% of employees surveyed think their companies give promotions when deserved. Moreover, respondents cite two years, on average, as a reasonable timeframe to receive a promotion with their current employers yet report that they themselves have received a promotion in five years, on average.
The search for growth
One of the most revealing findings of the report is what pushes even satisfied workers to consider a job change. Not surprisingly, income growth is one key factor: 28% of respondents considering a move in the next few years say it’s because they don’t think the company will be able to meet their salary expectations. However, a larger number of responses indicate that what employees really want is career growth. A desire to tackle new challenges every few years drives 39% of respondents to look outside their current company, while 32% say they feel they need to leave to advance their career.
Growth is one of the biggest drivers for people wanting to move. If people realize their careers are stagnating, they’ll start to look. Once again, the trends are clearest among those lower on the corporate ladder. A higher proportion of people in junior and intermediate positions – even if they are currently happy in their jobs – feel the need to look outside their company for career progression and to make more money.
Companies should have regular, fulsome discussions about career progression and performance management more often – with every employee, regardless of title, pay, role or tenure – and be transparent about their prospects. As leaders, we should be addressing opportunity all the time, whether that opportunity is in development and succession, or it’s recasting or exiting. Those discussions, when held the right way, will actually drive better experiences for our people, and show the commitment that we have as an organization. However, this study reveals only 54% of respondents have discussed career progression in the last six months.
Personalization: HR organizations should create flexible retention strategies to accommodate the unique circumstances of employees’ career and life stages.
Transparency: Employees need clarity on what to expect about compensation, promotions and their career trajectories at the organization. Regular check-ins keep everyone on the same page.
Total Wellness: Shift from a transactional relationship with employees to one of mutual support. Organizations that support the complete financial, physical, social and emotional well-being of employees, at any stage of life, inspire dedication and loyalty.
Career growth: Employees want new challenges, even those who aren’t in line for a promotion. Find ways to offer new opportunities to the right people at all levels.
Provide purpose: Ensure every employee knows the impact they make on company goals and empower them to drive results.
Spend time building your retention strategies around those employees who are the future of your business. No matter the age, role or tenure, you can keep a diverse talent pool engaged and performing their best throughout their career.