It’s a paradox faced by many HR departments and hiring managers. You’re told to employ more staff–but with less money available to persuade them. On top of that, in many regions and roles, there’s a shortage of people with the right skills in the first place—a supply-and-demand issue that typically means companies need to offer more money, not less.
In the US alone, the employee quit rate increased by 13% between December 2019 and 2022, according to the country’s Bureau of Labor Statistics. And our latest research of 4,000 professionals across the US and UK revealed that nearly half of employees are now willing to switch jobs within months as opposed to years. One reason: while it’s true that companies are raising salaries across the board, they’re still below inflation rates.
The good news is that pay isn’t the only thing that motivates a workforce. Our data shows, for example, that over 60% of millennials say they would be more loyal to a company with a good sustainability policy. “You have to offer employees something more than just the financial exchange,” says Ron Seifert, a Korn Ferry Senior Client Partner in its rewards practice.
Seifert advises that rather than focusing on wages, firms should emphasize their other benefits, such as the flexibility around working location and hours that many candidates now want. Our research reveals that 64% of employees say going back to the office will have a negative impact on their mental health.
An even more innovative solution, Seifert adds, would involve firms offering to relocate potential remote-working talent who are interested in moving out of big cities to smaller towns and rural areas due to the rising cost of living. “That would be super creative. It’s companies asking, ‘Where do you want to work?’”
In partnership with Fortune on this year’s ranking of the World’s Most Admired Companies, our research finds that successful career development is one key feature that distinguishes top ranked firms from their peers. Tom McMullen, a Korn Ferry Senior Client Partner and rewards expert, recommends putting yourself in the employee’s shoes to see if you can answer these two questions in the affirmative: do I see myself being here in another five years, and is the company giving me the tools, skills, and experiences I need to protect my job in both the present and long term? “If I feel I’m not getting developed or the company doesn’t care about my career prospects, I might look elsewhere,” says McMullen.
But it’s not enough to have development efforts in place, continues McMullen, who cautions that many firms are plagued by a ‘leader knows best’ mentality when it comes to program design. “Leaders to need to ask, ‘have we listened to our current employees to hear what they have to say?’” He adds that part of the fix is to engage middle managers who can not only direct the flow of information from leadership to employees but should also ideally be funneling feedback up the chain as well.
It’s important to remember that what excites people is building industry connections and making rapid progress within their field, posits McMullen. To that end, Seifert says firms should communicate that they have the power to integrate people into their extensive networks and accelerate their growth exponentially. “It would help if leaders could say, ‘I can develop you in two years when it might take you four or five years elsewhere.’”
To speak to one of our experts on Rewards and Compensation, contact us today. If you’d like learn more about today’s Total Reward trends and insights, join one of our sector-specific Total Reward Sector Forum webinars.
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