The latest tallies from the Bureau of Labor Statistics make it clear: it’s a candidate’s job market.
In July the number of U.S. job openings hit a record 6.9 million. And, according to Work Institute’s 2018 Retention Report, voluntary turnover is projected to set back U.S. companies more than $600 billion this year, with each lost employee costing a company 33 percent of the employee’s base pay on average.
The good news for job seekers? They’ll have their pick of the litter when it comes to new job opportunities. But employers, on the other hand, are desperately trying to hold onto their talent.
Surprisingly, employees’ loyalty to their companies hasn’t seemed to waver. We recently surveyed 2,000 full-time U.S. employees and found that most (82 percent) have a high sense of loyalty to their current employers.
This loyalty doesn’t appear to be iron tight, however. The report also found that 45 percent of employees who have been with their current companies for less than a year have applied to new opportunities after a bad day at the office. In addition, 59 percent said they would leave because of a more appealing offer from a new company, not because they’re seeking an escape from their current company. So even the most loyal employees can harbor a wandering eye if they feel like other companies can provide them better support or career growth opportunities. This trend isn't great news for employers, because it's a huge drain on productivity and profitability for firms to invest in employees only to have them leave shortly thereafter.
At a time when the economy is strong and employees have plenty of options to choose from, organizations need to make sure they’re keeping employees engaged for the long haul.
Across the board, employees have high ambitions for sticking with their current employers long term. Our research found that half plan on staying at their current employer for another five years or more. On top of that, should they receive an offer to leave, more than a quarter said they would require a 20 percent or higher pay increase to justify the move.
In taking a generational view to employee loyalty, we found that 62 percent of Gen Xers (those between the ages of 39 and 54) and 43 percent of millennials (those between the ages of 25 and 38) see themselves staying at their current employers for five or more years. While millennials are nearly 20 percent less likely to aspire for a five-year stretch, the fact that more than two in five plan to stay at their employer for such a significant amount of time suggests the “job hopper” stereotype might not hold true.
Interestingly, more employees consider themselves dissatisfied (21 percent) than disloyal (12 percent), meaning most view any unhappiness at work as a temporary rut — but in a war for talent, employers can’t afford to ignore even short-term discontent. Sixty percent of employees have received inbound interest from recruiters or other companies for new opportunities in the past six months, and 43 percent of employees have pursued at least one of those opportunities.
So what makes a loyal employee start looking elsewhere? According to the report, a lack of professional growth opportunities is employees’ top reason for leaving a company.
Large companies often have the ability to provide the kind of professional growth employees want given their size and wide array of established career paths. Our data shows that nearly one-third (31 percent) of respondents from companies with 1,000+ employees have been at their company for 11+ years.
Smaller companies, on the other hand, are still growing and often have less-clear career paths. Our study found that little more than a fifth of respondents from companies with fewer than 1,000 employees have been at their company for 11+ years.
But while small and mid-sized organizations may not have the same level of growth opportunities as larger companies, they have something most large companies don’t — agility. They’re perfectly positioned to rapidly and effectively implement measures that motivate employees to stay for the long run, as long as they’re focused on the right initiatives.
As a small or mid-sized company, start by asking employees if they understand their progression path and if they see themselves with the company beyond five years. If the overwhelming response is no, then encourage employees to explore other interests and opportunities within the firm. Seventy percent of employees surveyed said they’d have some level of comfort with switching to a new role or department within their current company.
In addition, provide employees with the right technology to free up their time for more meaningful and engaging work. But you can’t stop there — be sure to provide the training necessary to use these tools. According to a study we did earlier this year, 65 percent of companies have adopted automation technologies in the workplace, yet 41 percent of managers say the biggest challenge of managing their team is being too bogged down with administrative tasks.
Finally, once you have addressed the need for a clear career path, don’t forget to re-evaluate some simple but effective measures. The aspects of a company that would make an employee stay (i.e. perks) are different than the aspects that would make them leave, like a lack of professional growth. Consider changing some of the perks you offer to employees to show they’re valued. Forty-five percent of respondents say the top reason for staying at their company is vacation/PTO benefits. Health coverage (34 percent) and work flexibility (29 percent) also were also among top answers. To feel motivated enough to grow and climb the ranks at work, employees have to feel supported in other realms of their lives, and employers should invest wherever they can to make that possible.
Overall, our survey shows that employees want to stay with their current companies. That’s good news for employers who would otherwise spend thousands of dollars and months trying to backfill roles, putting an enormous strain on profitability and growth. But in a tight labor market, there will always be other options for those who feel stuck or idle in their current jobs. If you want to make sure your employees stay happy and engaged long term, show them they can have the future they desire right at home within their own company.