2007 shapes up for retention crunch

Dec 20 2006 by Nic Paton Print This Article

The New Year has traditionally been one of the most popular times to move jobs, but with three quarters of U.S workers saying they want a change, 2007 is likely to be even busier than usual

More than three quarters of U.S workers are actively looking for new jobs, and this New Year is going to be a prime time for people to hand in their notice and move to a different position, latest research has suggested.

A poll of 462 employees and 367 HR professionals by the Society for Human Resource Management and The Wall Street Journal's CareerJournal.com found that more than a tenth of workers 12 per cent had resigned voluntarily since the beginning of 2006.

And a separate study by recruiter ExecuNet has predicted that, with U.S unemployment at its lowest level in five years, 2007 is going to be a very competitive and expensive year for talent.

Firms, it forecast, will have to pay more and look at more innovative benefits and bonus strategies to attract and retain key people.

The SHRM/CareerJournal poll found that non-management employees were the most likely to resign, according to nearly three quarters of the HR professionals surveyed.

Seventy-three per cent of the HR professionals said they were concerned about the level of voluntary resignations at their organisations.

And half said their organisations were scrambling to put in place special retention measures as a result, up from just over a third in 2004.

These included promoting qualified employees, offering competitive merit increases or salary adjustments and providing career-development opportunities.

Although salary increases were often perceived as the most valuable incentive for employees to stay with their current jobs, they were also among the most difficult to provide because although the economy was improving, organisations were still somewhat cautious about increasing spending, said the SHRM.

"As the economy and job market continue to improve, employee retention poses a greater challenge for HR professionals," added Gail Griffin, general manager at CareerJournal.com.

"The top three reasons people voluntarily leave their organizations are for better compensation elsewhere, career opportunity elsewhere, and dissatisfaction with the potential for career development."

Susan R Meisinger, SHRM chief executive, added: "Offering competitive salaries is important to employees, however, compensation alone is not sufficient for a complete retention strategy.

"Career-development opportunities and work/life balance are also important, and employers must consider these types of benefits in their retention practices if they want to maintain or increase retention at their organizations," she added.

The top reasons employees chose to leave their organisations were: better compensation, better career opportunity and dissatisfaction with potential for career development, the poll found.

The ExecuNet research, meanwhile, has suggested that, with executive talent in high demand for the fourth consecutive year, companies will be forced to add yet more incentives, including bigger bonuses, to their compensation packages in an effort to lure talent from competitors and keep key leaders from walking out the door.

The use of options and equity is also likely to climb significantly in the year ahead, as recent gains for stocks increase their appeal.

The demand for executive talent will increase to new levels as small and medium-sized businesses continue to create a steady stream of new job opportunities across nearly all industries and functions, it forecast.

At the executive level, job growth could increase by as much as 12 per cent, it suggested.

But the number of workers at all levels who's prospects will be harmed by "digital dirt" will also rise sharply, it forecast.