UK employers need to renew focus on pay if they are to attract and retain talent as workforce churn escalates, according to global study
British employers need to get a better grip on pay and how it is delivered if they are to attract and retain top talent, according to research from Willis Towers Watson’s Global Workforce Study. The study shows that a third (32 per cent) of UK employees say they are likely to leave their current employer in the next two years, and rank their salary as the number one motivation to consider leaving.
The research also provides evidence of continued money worries in the workforce, with nearly half of employees (49 per cent) anxious about their financial future and only half (48%) feeling what they get paid today is fair.
This news comes as a simultaneous Willis Towers Watson global study of companies confirmed an upturn in the job market. In its Global Talent Management and Rewards Survey, nearly a third of UK employers said hiring activity has increased compared with the previous year. Additionally, a similar number (29 per cent) indicate that employee turnover is rising and that retaining high-potential employees and top performers is becoming increasingly challenging.
Tom Hellier, GB Practice Lead, Rewards at Willis Towers Watson, said:
“As churn increases in the labour market, employers need to get savvier about what makes staff tick if they are to succeed in bringing the best people into their workforce and importantly go on to keep them in the business. Increased pay transparency through websites like Glassdoor, coupled with mounting anxiety fuelled by headlines about stagnant pay growth has re-focused workers’ minds on their salary and whether they are getting a fair deal.
“Putting more money into the salary budget is a difficult task for business leaders in the current economic climate. However, improving perceptions of fairness is still possible if companies are able to articulate how pay decisions are made and demonstrate effective differentiation through better alignment between pay and performance,” said Tom Hellier. “Companies should also ensure that employees understand the value and rewards that are included in their total package.”
Willis Towers Watson’s studies of employers and employees indicates disconnect between what employers think are the key drivers of attraction and retention and what most workers actually want from the employment deal. According to the research, as part of the recruitment process companies are underestimating the value employees put on fundamentals such as job security and overestimating the importance of the relationship with line managers.
The research also shows that just a third say their organisation hires highly qualified employees, while even fewer (23 per cent) think their company does a good job when it comes to attracting and retaining the right workers.
Tom Hellier continued:
“With talent mobility on the rise, employers might benefit from listening more closely to their employees and paying attention to available data on the drivers of attraction and retention. Going beyond this and asking employees what they value most when it comes to total reward presents employers an opportunity to reallocate reward spend and deliver genuinely positive returns. While this sounds simple, offering competitive rewards remains an enduring and critical challenge for employers when attracting and retaining employees.
“Shrewd employers recognise the cost of not securing talented candidates and of high staff turnover in terms of frequent recruitment investment, but many still underestimate the impact to their bottom line from reduced productivity among employees resulting from high levels of disengagement. In contrast, improved employee engagement would help UK employers improve their financial performance with the talent they already have today.”