Employees leave companies for a variety of reasons: dissatisfaction with the work; personality clashes with managers or coworkers; long commutes; poor work/life balance; etc. But according to a new Office Team survey, compensation is still one of the primary reasons employees switch jobs. And, in a tight labor market that favors employees, their ability to do that is on an upward slope.
Low Unemployment Rates Mean Options for Employees
Unemployment rates remain at historic lows; however, wage growth has been relatively stagnant. In fact, real wages—wages adjusted for inflation—have actually dropped over the past year according to a report for NPR by Stacey Vanek Smith and Cardiff Garcia. Over the past year, real wages have fallen by .2%, according to the report.
Real wages are wages adjusted for inflation. “So wages have gone up,” says Smith and Garcia. “People’s paychecks have gotten bigger. But at the same time, the prices of the things people buy have gone up even more.”
When we break down the numbers, some groups are doing better than others. Specifically, people who switch jobs have seen greater wage growth than those who are staying put, according to the Workforce Vitality Report for Q4 2017.
And Challenges for Employers
For cash-strapped companies, this may be somewhat terrifying news—caught between the rock of employee brain drain and the hard place of paying higher salaries. But it’s not necessarily time to panic just yet.
It’s important to note that while pay is almost always a key consideration when employees consider switching jobs, it’s not the only consideration. “Money doesn’t tell the whole story,” says one expert. “While low pay remains a key cause of dissatisfaction, job security and development opportunities also affect whether an employee will stick around for the long haul, especially among the younger set.”
Low unemployment and stagnant wages are a recipe for employees seeking out better-paying opportunities, and data suggest that those who do are being rewarded for their decision.
At the same time, employers have other tools to help hold onto their talent—namely, improving employee satisfaction and providing opportunities for growth and development.
Now is a good time to take steps to assess whether you’re meeting employees’ needs, both monetary and nonmonetary, and giving them ample reason to avoid job-hopping.