| RETENTION Pay not a major factor underlying employee dissatisfaction Labour turnover has increased by 25% in the last five years and a third of staff plan to resign from their jobs within the next two years, according to a new survey by the HayGroup. But employees are most likely to leave when their skills and talents are not properly developed or when superiors fail to take an interest in their career development, rather than because they are dissatisfied with pay. What's more, employees are much more likely to walk out of the door when they perceive a lack of clear direction on the part of their managers. These findings, published in The Retention Dilemma report, are based on the responses of almost a million employees in 330 companies across 50 countries. Hire and fire culture has undermined loyalty Sallyanne Houlton, an associate director from the HayGroup, warns that the hire and fire mentality that began in the late 1980s has severely dented employees’ traditional loyalty to their employers, and they will, in most cases, act more quickly than their employer if they are not happy in their current role. However, where managers take a strong interest in their employees’ career path, retention rates are radically improved. The proportion of those employees who planned to stay with their current employer for five years or more rose to 78% where respondents believed that managers took an interest in their careers. Key retention issues Hay asked employees about levels of satisfaction with various aspects of their jobs and organisations. Significant differences emerged between those who planned to stay and those who expected to quit within two years. Issues that had the widest disparities between these two groups — dubbed satisfaction gaps by Hay — in essence reveal why people leave their jobs. The results show that ultimately, people want to find meaning in their work. According to Hay's analysis, meaning is generally derived from non-economic factors such as the desire to deploy one’ s skills in a challenging effort — to be useful and helpful — and to be part of a team led by capable managers who have a clear sense of direction. Pay is ranked seventh of the eight factors listed in the table. This will not surprise experienced managers, says Hay, who know that although employees talk about money incessantly, it is not a deep motivator for most. Relationship between job satisfaction and employee turnover
Source: The Retention Dilemma, HayGroup 2001. Turnover costs Hay estimates that the cost of losing an hourly-paid worker is about half a year’ s salary, while each managerial or professional resignation costs the equivalent of 18 months’ salary. The costs include money spent on direct replacement such as advertising, headhunters’ fees and employee development. In a company with 5,000 employees, each earning an average of £ 24,589, Hay projects that staff turnover rates of 14% among clerical workers, 12.5% among professionals, and 5% among managers will cost the organisation £ 14 million a year, which could amount to a drain of 40% of profits. The cost of dissatisfied staff is also high — Hay estimates there is 58% more absenteeism in departments where employees are dissatisfied than in those where employee morale is good.
Want to know more? Title: The Retention Dilemma, HayGroup 2001. Methodology: Much of the data in the report comes from the Hay Insight employee opinion database. It includes responses to some 300 questions, and allows companies to benchmark their own employees’ opinions by occupation, industry, and country or region. Sample size: The database currently contains responses obtained in the past four years from about one million employees in 330 companies. Availability: To download the report in PDF format, free of charge, visit the HayGroup web site at . . . www.haygroup.co.uk/News/news_archive.asp#resign Posted 4 December 2001
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