Employee Retention? Is the Same As It Was 20 Years Ago?
Long time ago, employers thought that employees would be with the same company for 20+ years. If you got hired by a large multi-national corporation in a very traditional industry (automotive, oil and gas), the thinking that just treating employees well throughout their tenure will keep employees happy and engaged for years to come. Employer compensation and perks have changed drastically within the last 20 years. Very few companies offer an employee a Defined Benefits Pension Plan but rather offer a Defined Contribution plan. Only 37% of Canadian employers offer a pension plan. In 2021, employers are putting retirement planning in the hands of the employee instead of themselves. What motivates an employee to stay with their company if these perks are being taken away?
The War for Employee Retention Is Real.
If your company is not updating its technology, IT Infrastructure and staying on top of employer benefits plans, why should an employee stay? In order to lure top level candidates, many start-ups and IT companies are offering signing bonuses, perks , and updated technology development platforms. Additionally, before pandemic times, workplace culture was drastically changing. Paid lunches, juice bars and table tennis inside offices were added to make employees be more creative. So, if you were not adapting to current workplace culture trends, employees would start to look for other opportunities.
Are Your Salaries In-Line With Today's Marketplace?
I always hear money is not what motivates an employee to make a change. Is this a myth? If employees feel that they are being underpaid for the work that they do, they leave their company. Plain and simple.
Furthermore, people talk especially within their own industry. I find the employer mindset on base salary needs to change. If an electrical engineer hired 8+ years ago was paid a certain amount of base salary and decides to leave, what makes an employer think that they can offer the same base salary as they did 8 years ago? House prices, goods and services and inflationary rates rise yearly at an average of 2.7%. Management should recognize that the entry level process engineer salary is not the same as it was 10 years ago. However, many manufacturing industries still lack the modern day mindset and think they can get a qualified candidate with the same salary as they did 10 years ago.
Unfortunately, with salaries not keeping up to date with today's inflationary costs, talent suffers. This makes it very hard to attract top candidates with a non-modern day mindset. In the end, if you're not changing to fit current times don't expect to have top talent knocking on your door step.
It's A Candidate's Market
In our post pandemic world, it's a candidate's market. Gone are the days where a candidate will receive 1 employment offer. Every top level candidate that is actively looking for a role can expect to have 2 or 3 offers to choose from. On top of choosing multiple offers, the candidate might even negotiate salary and title from their current employer. All this goes to show that in today's society the candidate holds all the cards. If your compensation, work/place culture , pension and benefits plans are not better than the rest, expect competition from multiple offers. But also prepare yourself for a tough negotiation from your candidate on your compensation and perks.
