As workplace managers face a swiftly evolving employment market that’s increasingly favouring the demands of white-collar employees and jobseekers, bosses are falling under mounting pressure to preserve their workforce or else risk a brain drain.
The relatively new post-pandemic trend of employees upending their jobs and seeking employment refuge with better perks elsewhere, often dubbed as the “Great Resignation”, has become a growing headache for employers within the finance, technology, and business support sectors. They now face the challenge of having to compete with more attractive offers regarding salary and flexible work-life balance.
That’s the finding of a new independent research run by global talent solutions provider Robert Half, which highlighted that 86 per cent of employers are “concerned” about valued team members leaving in favour of new opportunities.
The numbers published in Robert Half’s latest Salary Guide for 2022, illustrate a difficult path for employers feeling the pressure to create conditions that will retain employees, with 75 per cent predicting turnover will increase this year compared to the pre-pandemic period. The research found that 80 per cent of employers are planning award salary increases this year as a means to retain existing employees.
But while nearly half (46 per cent) of business leaders said they are planning to increase salaries for all employees in finance, tech, and business support, just over one-third (34 per cent) said they are only planning to increase salaries for their top performers.
And those salary increases may come at a great cost to the employers, but with potentially high gains for valued employees, as the research from Robert Half found that specialised professionals with highly demanded skills may find themselves in a better bargaining position that could net them an average pay rise of 11.4 per cent.
Robert Half cited the Australian Bureau of Statistics (ABS), noting that is more than 9 per cent above the forecast national annual wage growth of 2.3 per cent.
The research said it’s crucial for employers to offer competitive salaries to minimise the risks of high turnover in 2022, but warned that boosting compensation is “only part of a swathe of new tactics taking aim at retaining top talent in the year ahead”.
“With flexibility being cited as the number one reason for the rising turnover, work-life balance benefits have become a must-have for most employees in today’s market and most companies are actively taking steps to meet those demands,” the research said.
And employees may find relief in the numbers reflecting employers’ more welcoming attitudes towards remote working, with 55 per cent of employers new focused on offering flexibility and work-life balance through remote work arrangements, and 48 per cent allowing employees to autonomously set their own work hours.
Robert Half senior managing director, David Jones, said employers in 2022 have reason to be concerned about losing employees this year.
“In stark contrast to the past few years of stagnancy, skilled talent are actively being poached by competing organisations and have multiple job offers with generous salary packages from businesses who are undertaking exciting growth initiatives,” Mr Jones said.
He said that it is one of the most “fruitful” times to be a jobseeker in recent years, and employees are aware of their bargaining power, so that will translate into a higher rate of job switching.
“Employers looking to retain their top talent will be under pressure to financially incentivise loyalty or risk an exodus of tenured knowledge. Remuneration will be a key driver behind whether an employee chooses to remain with an employer – perhaps more so this year than pre-pandemic because inflation is high, yet national wage growth is low, so employees who remain with a company without a pay increase are ultimately going backwards,” Mr Jones added.
He called on businesses to approach this new employment trend with a “dynamic ‘always on’ approach” to employee retention, working on the basis that their top performers are the most likely to be poached by competitors.
He also feels that alongside salaries, businesses will also need to bolster retention efforts through clear career development pathways, offering competitive bonuses, and heeding demands for flexible working arrangements.
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