Voluntary staff turnover has risen in 29% of organisations over the past year. That’s one of the many findings in our recently released Hays Salary Guide, which shows that just 14% of the 2,752 organisations surveyed, representing over 2.6 million employees, reported decreased staff turnover during the past 12 months. The remaining 57% said it stayed the same.
The increasing number of resignations suggests that people are far more confident in the job market. They are aware that more permanent and contract roles are now on offer, and they know that demand is rising for highly-skilled professionals.
There are three key factors behind the rising staff turnover rate:
1.Confidence strengthens: Based on our survey almost two-thirds of employers (64%) experienced increased business activity over the past 12 months, with 70% expecting further increased activity in the year ahead. Staff levels are up too, with 39% increasing permanent headcount during the last 12 months – outstripping the 21% who decreased it.
2.Cost consciousness still prevails: Despite this positive activity, cost consciousness remains in vogue with 16% of employers offering no salary increases over the last year. Those employees who did receive a salary increase found that their wallets were not that much heavier. This is despite 82% of employers saying that salary and benefits have a major or significant impact on their employer brand – at a crucial time when skill shortages will make their presence felt again.
3.Employees respond to employers’ lack of action: It’s time form employers to recognise that times are changing. If employers do not respond to current market conditions, turnover will continue to rise as employees walk out the door to a role offering better career advancement, salary, benefits or work-life balance.
According to the Hays Salary Guide, projected salary increases for the year ahead are not that much better. Perhaps that’s why 41% of employees say they’ll take matters into their own hands and ask for a pay rise in their next review. Another 25% are as yet undecided about popping the salary question.
This means that employers need to be prepared for salary pressure. As soon as a few employers in a particular sector or industry start to use salary to compete for top talent once more – and they will – those at the back of the pack for salary increases will be the first to experience even greater levels of turnover.