The ‘Great Resignation‘ has led to discussions about benefits, company culture, and retention schemes. But talk is not enough, and professional services company Ernst & Young (EY) has found that 43% of employees are likely to leave their current job in the next year.
As part of the EY 2022 Work Reimagined Survey, the company spoke to 17,000 employees and 1,575 employers across 22 countries and 26 industries. EY asked them about the drivers of retention and attrition.
The findings show the need for action as well as the severity of the challenges that companies, particularly in the US and UK, face.
The job market
EY found that job vacancies are up 50% since 2019 in the UK and US. Interestingly, Germany has managed to avoid this trend and keep a relatively consistent amount of vacancies.
The reason for the US and the UK’s demand for staff is clear, 68% of employer respondents said employee turnover has increased in the past 12 months. Given that 43% of employees said they’re likely to leave in the next year, there are serious issues that employers must address.
To add insult to injury, the number of people who are likely to leave their current role has risen by 7% since 2021. Those who most frequently said they were going to leave their role are Gen Z or millennial workers in the US (53%) and those in the technology and hardware industries across the world (60%).
Employees feel empowered; this is evidenced by their ability to leave work that doesn’t meet their needs. However, it appears that organizations may be misguided in their attempts to give staff what they want.
What do workers want?
Although surveys can offer a look into the experience of employees, often leaders are still unsure about what they can deliver that will improve retention.
This study by Ernst & Young highlighted the challenges employers face when it revealed that the most popular thing that employees want is the opportunity for more pay (35%). Behind this was flexibility (32%), and the opportunity for better career advancement (25%).
Contrary to the wants of employees, employers thought that staff wanted investment in learning and skills (37%), flexible schedules (36%), and investment in wellbeing (32%).
Although it is a positive sign that employers and staff see flexibility as an important factor in the increasingly hybrid working world, there are other challenges that need to be addressed.
Employees clearly want pay rises; this can be for a myriad of reasons. If a company is losing staff, then those who stay are often required to pick up the slack and skill gaps. This situation means that often employees will be working even harder without any incentive.
Naturally, doing extra work without pay can lead to remaining staff looking elsewhere for an employer that pays them more to do a similar role.
Additionally, employees are facing the most severe cost of living challenges in a generation. On the back of this, company loyalty may be abandoned for the ability to keep the lights on.
In the report, EY stated: “For employers, pay represents a fixed cost during a time of growing inflation.
“Only 18% of employers believe pay increases/reviews are needed to address employee turnover, showing a clear disconnect to what employees say they want in a new role, and what employers are expecting to most deliver to help employees thrive.”
Addressing the needs of employees
While learning may help fill a skills gap, and improve an employees abilities, it may also be seen as an insulting incentive if workers are not getting paid for the extra work they are already doing. On top of that, employees may not have time to learn as they are working extra hours to cover staff who have left.
Equally, investing in wellbeing initiatives may not be helpful if a member of staff if their wages mean that their quality of life is disintegrating. After all, personal issues do impact work.
In short, the world is pretty depressing at the moment. You don’t necessarily need to open a blank checkbook and start adding zeros. However, you need to actually listen to employees, and understand what their problems are and where they want to be.
Doing this can help employees map out effective learning and wellbeing strategies.
In the concluding statement of the report, Liz Fealy, EY global people advisory services deputy leader, and Roselyn Feinsod, principal of people advisory services at EY, wrote: “Work has been reimagined by employees and employers but their visions don’t always align.
“Both see flexibility and hybrid work as the new normal, though further details reveal divisions.
“Employees are still willing to leave their jobs to advance their career and pay potential. Global uncertainty connected to inflation and labor costs are fueling reluctance among employers who are not eager to reset pay and career opportunities.
“If companies don’t address pay equity between internal and external labor markets, then efforts toward improving culture, productivity, and D,E&I will be neutralized by turnover.
“By acting with intentionality, leaders can build trust and orient their organizations toward an optimistic future.”
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