Signs that the labor market may be softening hasn’t eased employers’ worries about finding skilled workers, then keeping them once they do.
One reason, according to The Wall Street Journal, is employees have figured out that remaining in place may not be in their best interests. There’s “relatively little value associated with tenure at companies,” Brian Kropp, vice president at the research firm Gartner, told the newspaper.
Workers can increase their compensation by around 15 percent when they switch jobs, Kropp said. If they win an internal promotion, their raise would average between 2 and 3 percent.
Signs the labor market may be softening hasn’t eased employers’ worries about finding skilled workers, keeping them once they do. #HR #HRTech Click To TweetPartly because of that, more U.S. workers quit their jobs last summer than have since the government began tracking the data in 2000. In 2018, companies spent $617 billion replacing employees. That’s nearly double the $331 billion they spent in 2010. The Journal said retention will remain critical during 2020, even if the economy “dramatically” slows.
Mixed Tea Leaves
All this comes as employers receive mixed signals about the economy. For example, ADP’s Workforce Vitality Report said year-over-year wage growth dipped to 3.2 percent at the end of 2019, down from 3.4 percent in 2018. Meanwhile, job growth gradually slowed. The report expected that trend to continue—job growth slowing as wages rise—as the number of job postings outpaces the number of unemployed workers.
The tight labor market itself is one reason job growth is slowing, ADP said.
“All eyes remain on the aging economic expansion and how workers and firms are dealing with difficult hiring conditions and increasingly uncertain future economic conditions,” the report said. “Fault lines appear to be emerging amongst companies of different sizes.”
To keep people on-board employers are offering clearer career paths, flexible work arrangements and benefits meant to aid work-life balance, the Journal reported. For example, one law firm allows new parents to receive full salary while billing 80 percent of their normal hours.
Experience Over Dollars
Such approaches bode well for HCM technology vendors who’ve developed features to help HR implement and manage programs that strengthen employee experience and culture. Over the last several years, the importance of experience has become an article of faith among HR experts and solutions providers.
Most observers say experience refers to most every interaction that occurs between employer and employee, including meetings as well as self-service applications. In January, Gartner recommended that employers pay increased attention to how their workforce feels about the experience they provide at all levels.
This dynamic has made experience a full-fledged buzzword in the HR tech marketplace. Last year, both Oracle and SAP SuccessFactors launched products built around an improved user experience while Phenom People began talking about “the talent experience journey.” Meanwhile, Qualtrics launched EmployeeXM tools that help IT executives measure technology experiences, then use the data to close gaps.
Susan Cicco, head of HR and employee experience for MassMutual, told the Journal that employers are under continued pressure to differentiate themselves to candidates. “We have to be in constant evolution, constantly listening to employees, getting the insight into what’s valuable to people,” she said.
There are some contrarian indicators, however. In October, iHire’s Talent Retention Report said that while job-hopping had become “the norm,” 76 percent of employees planned to stick with their current employer for up to five years. Nearly half—49 percent—said a raise or bonus would increase the chances they’d turn down an external offer. Only 22 percent who said “clear growth opportunities” would do the trick.
Sign up for our newsletter here.
Image: iStock
