- Why employees are leaving. A lack of transparency, flexibility and commitment to diversity, equity and inclusion, and employee well-being are driving factors behind employees’ wandering eyes.
- Eliminate bias. Employers should look to establish clear and open processes that determine employee compensation.
- Offer more flexibility. Fifty percent of male and 46% of female parents have considered leaving the workforce entirely due to the difficulty in balancing childcare needs with an inflexible work schedule.
- Improve well-being. Employees are paying more attention to companies that care for their own financial, mental and physical wellnes.
Today’s workforce is more equipped and informed than ever when it comes to finding the right job for them. With access to millions of job descriptions, company reviews, compensation information and benefits packages at the push of a button, 65% of Americans have considered opportunities elsewhere.
Millennials, in particular, are wondering if the grass is greener, as 75% considered resignation this year. With over 10 million job openings to roughly 6 million unemployed Americans, there’s a clear disconnect between what employers are offering to their own employees and what job seekers desire.
Employers everywhere have been left scratching their heads at the mass exodus of employees over the past year. With inflation on the rise, and a potential recession looming, a common sentiment is that people are simply leaving for higher pay.
But according to beqom’s 2022 Culture and Compensation Report, a lack of transparency, flexibility and commitment to diversity, equity and inclusion (DEI), and employee well-being are driving factors behind employees’ wandering eyes.
A Lack of Pay Transparency
When it comes to compensation, many employees have a simple request: they want to understand they are being paid fairly. If employers are not willing to discuss and explain compensation strategies with employees, they’re apt to host those discussions amongst themselves.
In fact, 58% of employees have discussed salary with their colleagues, and 43% of those opting to talk about their pay learned that a co-worker in their same position earns more. Coupled with the ability of today’s workforce to browse salaries elsewhere in their field instantly, it becomes clearer why nearly a third (29%) of employees believe their company does not pay fairly.
For one in 10 workers, they don’t believe they’re paid fairly because they don’t have any insight into why they’re paid their current salary. Additionally, more than half of Americans are unsure of exactly how much they will take home at the end of each year when considering their compensation, rewards and benefits, with less than half (48%) of employees claiming to know their total compensation for the year.
This may be why the report saw an overwhelming majority of workers (70%) preferring a higher base salary over a lower one with more potential bonuses.
To attract and retain more talent, employers should consider implementing more transparent compensation processes utilizing data and technology such as predictive analytics and automation to eliminate potential biases and remedy pay discrepancies.
Employees often feel their wages aren’t determined holistically, with respect to their performance and qualifications, due to minimal transparency and potential biases. In fact, according to beqom’s 2019 Changing Culture of Compensation Report, 34% of employees believe pay is solely determined by managerial opinions, rather than a combination of measured performance, skillset, and experience.
To help eliminate questions of bias and transparency within the workforce, employers should look to establish clear and open processes that determine employee compensation. For many employees, it’s not necessarily about paying more, instead people want to be paid fairly.
As companies begin returning to the office in varying capacities, many have enjoyed in-person work more than they thought. However, 68% would still consider leaving for a role with more location flexibility. While this may seem counterintuitive, it’s clear that employees want more options when it comes to where and when to work.
With the newfound ability to work remotely, working parents are leading the charge toward more flexible hours. Many companies are doing their part, with 47% of working parents noting their employer rolled back on enforcing a strict “9-5” schedule during the pandemic.
Yet, 48% of men and 42% of women with children still decided to reduce their hours, and 47% of male and 43% of female working parents cited their childcare commitments as the main barrier preventing a promotion or pay raise.
As a result, 50% of male and 46% of female parents have considered leaving the workforce entirely due to the difficulty in balancing childcare needs with an inflexible work schedule. Implementing more flexibility — especially for working parents — can help prevent employee churn.
DEI and Well-Being Shortcomings
More than ever, employers and employees alike are placing more emphasis on DEI in the workplace, with a Glassdoor study reporting that 76% of employees and job seekers emphasized diversity as an important factor when job searching.
Our report found that while 34% of respondents acknowledged their employer recently enhanced their DEI commitment (with 64% of enhancements including an advanced pay equity strategy), 46% of workers would still consider switching jobs for a company with a more comprehensive DEI strategy. Additionally, 37% noted that their organization keeps gender pay gap data under wraps, both internally and externally, causing potential confusion or mistrust.
On the well-being side, employees are paying more attention to companies that care for their own financial, mental and physical wellness. Some employers are ahead of the curve, with 28% increasing mental health and wellness benefits, 29% increasing or expanding 401(k) plans, 21% expanding childcare benefits and 31% improving their paid leave policy in 2022 alone.
Companies that increased these benefits should consider outlining them more directly in job listings, as listings that included benefits saw a 22% boost in applications last year.
In order to retain employees amid extreme turnover, companies should focus their efforts on the areas that matter most to employees. Pay transparency, flexible work environments and a commitment to the values and benefits that matter to their unique employee base are key to retaining and attracting employees in the current volatile talent market.
By considering these changes, employers can do their part in bridging today’s employment gap.
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