Economic recovery reveals gap in employer strategy to retain staff
Despite the enhanced risk of losing talent, less than half of HR professionals (47%) said that their company had a strategy in place to deal with staff retention and, of those who did have a strategy, only 43% had updated this since the beginning of the economic recovery.
The latest Labour Market report from the Office for National Statistics (ONS) shows that the number of roles available has increased by 23,000 on the last quarter which gives those seeking a new role more choice.
When a rival offer is made 64% of HR professionals said that their company would make a counter-offer to retain top talent but most (69%) were not willing to step outside existing salary structures to do this. Making a counter-offer proved successful with 38% of HR professionals successfully retaining an employee by doing this. However, 42% had experienced the rejection of a counter-offer by an employee.
Nicholas Croucher, Managing Consultant at Specialist HR recruiter Ortus commented:
“The economic recovery is in full swing across all sectors, in fact it has been revealed that the UK economy grew faster than expected in 2014. Smaller firms and large companies are feeling a renewed sense of optimism within the market and as a result are looking to hire new talent.”
“This is great news for job seekers and the number of vacancies out there is increasing, but with a limited pool it’s clear companies need to work harder to retain their top talent. We would recommend that companies who have not done so create a clear retention strategy which can then be applied as a bespoke tool to staff, looking at their needs and aspirations.”
Career development is catalyst for leaving
The reasons most frequently cited by employees for moving company were career development (75%) then salary (72%) and improved work/life balance considerably less at 29%. According to the CIPD Employee Outlook report 32% of employees surveyed felt that progression in their organisation is unachievable 31% felt it was achievable with 31% neutral.
Despite these findings, only 30% of counter-offers include guarantees about future career progression. When it comes to salary, 25% would match the salary element of a rival offer and 75% would come back with a counter-offer that is higher than that of the rival. The average premium on a rival offer was 6% of salary.
Counter-offers also emerge at the job offer stage with over half (54%) of HR professionals surveyed also experiencing the loss of a potential new recruit to a counter-offer.
Nicholas Croucher continued:
“Career development is the most frequently cited reason for employees moving to a different organisation but only 30% of HR professionals said that guarantees about career development would form part of a counter-offer.
“Companies are generous in monetary terms when it comes to counter-offers but need to be more creative – employees aren’t exclusively focused on remuneration. Just like the now enhanced importance of CSR in retaining top talent, they are looking for development and enrichment from their employer, as part of a more individualist approach.”