How to Replace Job Hopping With Retention
Job hopping may be the latest technique to boost one's income, but that might not have to be so anymore. In comparison to 2016, data shows that job switchers are less likely to boost their wages. According to the ADP Workplace Vitality Report (WVR) for the third quarter of 2017, job holders' wages grew 4.4 percent, while job switchers' wages grew by 3.3 percent year over year. The tightening labor market as well as pressure to retain top, high-potential talent should be top-of-mind for HR leaders in 2017.
Employers Remain Cautious About Pay
While there's no crystal ball to reveal the reasons behind pay increases, wage growth is often a reflection of employers reacting to uncertain times. "Given the conflicting signs of how strong the U.S. economy is, employers are opting to remain cautious with their pay-budget forecasts," reports the Society for Human Resource Management.
Indeed, slower than anticipated growth in the first quarter of 2017, as reported by CNBC, contrasted by low rates of unemployment, leave businesses without a clear picture of what's next regarding growth and could still be impacting their decision-making in Q3 and beyond. Some employers may be holding off on pay increases until they have a better idea of what's ahead.
Pay Changes Vary By Markets
It remains to be seen whether the decrease in job switchers' ability to earn more in pay will have a widespread impact on labor markets regarding retention. For job holders, there were significant benefits of not leaving for some sectors. According to the WVR, job holders in the following categories enjoyed significant wage growth:
- Women (4.6 percent)
- Younger workers, aged 24 and younger (8.8 percent)
- Employees at midsized organizations (4.6 percent)
- Staff with short tenure (5.4 percent)
Concerning wage growth, jobs in the West (4.8 percent), as well as those in the leisure and hospitality industry (4.9 percent), fared the best.
The Value of Job Hopping Data for Retention Strategies
It's still important for HR to examine what job hopping offers and why workers would choose to leave. Gallup reports that the top-ranked reason employees consider making a switch is that "they want to do what they do best." Gallup reports that for workers who had recently changed jobs, income increases ranked third and career development opportunities were fifth on the list of reasons why they switched jobs.
3 Ways to Retain Your Employees
Armed with job hopping data, as well as insights regarding employees' varied needs, HR can create strategies that deliver compensation and benefits which adhere to budgets, build employee loyalty and increase retention.
1. Compensation Packages
Rather than focusing on merit-based or annual increases, consider creating a compensation strategy that considers cash availability. Look for ways to increase the total pay package with variable bonus programs, profit sharing or improved benefits.
2. Professional Advancement
One way for employees to grow their income is by obtaining a promotion. By recognizing high-potential employees within the organization, HR leaders can create a bench of top talent that's not only engaged but also ready to take on the next role.
3. Career Training
As Gallup notes, it's not just about the salary increase. Employees also want "to do what they do best." By offering on-the-job training for employees, employers provide learning and development opportunities that can entice employees to stay.
Talent drives business performance. As such, it's imperative to retain the employees who can help you unleash your organization's potential to thrive and grow in the marketplace. Data from the WVR provides invaluable insights for HR to make strategic decisions that can replace job hopping with retention.