Compensation, Culture, Engagement, Branding

Engagement and Retention Crisis: 46% of Workers Feel Underpaid

We all know that unemployment has reached record lows. Employees might be wondering when they will start getting paid more, given that competition for talent should be severe. Research shows that is not happening. How do employees feel about this discrepancy? New research shows that nearly half of all employees think they are not being paid adequately for their work. Short term that might not have a huge impact, but over time this could lead to poor retention and engagement; these two factors can cause severe business losses. Let’s take a look at the research.

The research was issued in conjunction with the release of the Robert Half 2019 Salary Guides, which provide starting salary ranges for more than 460 roles in the accounting and finance, technology, legal, creative, and administrative fields. This research found:

  • 49% of professionals feel they are paid fairly at their jobs
  • 46% think they are underpaid
  • The remaining 5% admitted to feeling overpaid

Some additional findings include:

  • Cities with the most workers who feel underpaid: San Diego led the pack (62%), followed by Austin (54%), Houston (53%), Nashville (53%) and Philadelphia (52%).
  • Cities with the fewest professionals who report being underpaid: Those in Miami (33%), Dallas (37%), New York (37%), Los Angeles (39%) and San Francisco (39%) were least likely to say they felt shortchanged.
  • By age: More workers ages 55 and older think they are compensated fairly (52%) than those ages 18 to 34 (44%) and 35 to 54 (51%).
  • By gender: Women (49%) were more apt to feel underpaid compared to men (44%).
  • By education and income level: Respondents with a bachelor’s degree or higher, as well as those earning more than $100,000 per year, were most likely to say they’re being paid fairly (50% and 57%, respectively).

Paul McDonald, senior executive director for Robert Half, noted reasons why pay levels may not feel up to par. “Some firms have not kept up with shifts in market demand and continue to use old job classifications and salary bands. If your organization has not reviewed its compensation plan within the last six months, it could be outdated.”

Another factor fueling thoughts of being undercompensated is word of mouth. Workers who have spoken with recruiters about new opportunities, or with friends who have recently changed roles, often hear about better pay and perks offered elsewhere.

While money is important, McDonald urged companies not to rely exclusively on high compensation to motivate employees. “Professionals earning a healthy salary may still feel undervalued or underappreciated for their contributions. Pay alone does not guarantee employee satisfaction or happiness. Organizations need to offer solid benefits, perks and incentives, along with a positive corporate culture, to attract and retain top performers.”