How Low Unemployment and Stagnant Wages Affect Employees Looking for New Opportunities
Among these hiring hardships, many positive changes have revealed themselves since the Great Recession. One of the developing changes is the falling unemployment rate, which recently reached a low of just below 4 percent. Still, there hasn’t been a significant trend in wage increases among employed people in the US — a stark contrast to what most economists would predict, especially given the economic climate. Typically, low unemployment would be met with rising wages, and that’s simply not happening.
Since there are plenty of available jobs but wages aren’t on the rise, business owners like you are focused on attracting and retaining top talent. According to the 2018 Conference Board C-Suite Challenge study, failure to attract and retain top talent is now the top issue on the minds of CEOs, even more important than the disruptive nature of technology. If this scenario is ringing any alarm bells for you, you may need to reevaluate the investment you’re making in your employees.
How to Retain Top Talent When Employees Are Looking for Other Opportunities
There’s no surefire way to gauge if your employees are totally happy with their work or if they’re beginning to check out. But valuable offerings such as compensation and growth opportunities are often at the top of the list of benefits that employees value most.
If you’re a business owner struggling to keep up with the rate of inflation and the dwindling applicant pool, it’s imperative that you focus on engagement. With this competitive job market, your employees could be searching for a similar job with better pay or benefits, and it may not be hard to find. In addition, making employees feel valued and giving them development opportunities will become drastically more important in this economy. One major corporation getting on board the better benefits train is the Walt Disney Company, which recently announced they’re offering to pay tuition for their hourly employees — another way to attract and retain talent in what is becoming an increasingly competitive job market.
This year, QuickBooks Payroll surveyed 1,000 small business employees about their pay, job satisfaction, and career plans. The responses showed the struggle to retain employees, even when significant pay raises were available and offered, indicating that lower unemployment could be taking its toll on small businesses.
While 74 percent of employees surveyed got a raise, 65 percent said their pay hasn’t kept pace with the cost of living. Only 24 percent said they were dissatisfied with their current job. Yet, 43 percent said they’d change jobs in the next two years. Overall, the study found employees are looking these major incentives from their employers.
Three Incentives That Employees Care About
1. An Increase in Pay
One reason for the slacking wages among American employees could be that employers have changed the way they pay their teams. By offering bonuses, incentives, better insurance, and PTO, business owners are retaining employees with more competitive benefits packages. Still, it seems like nothing can top the almighty raise, and employees who can expect more money in the future will be more likely to stick around, even when the wages are low across the board. Around 16 percent of the respondents in the QuickBooks Payroll survey who said they’d leave their current job in the next two years marked pay as the No. 1 reason for doing so.
2. Lower Stress
Health and wellness matters, and let’s face it — burnout happens. Employees who aren’t making high wages are more likely to be overly stressed and not have the resources to deal with it. Nearly 13 percent of respondents in the QuickBooks Payroll survey who said they’d leave their job in the next two years marked lower stress as their main reason for doing so.
Focusing on employee health and wellbeing is another factor for retention. Are your employees getting the work-life balance they need and deserve? Is there anything managers can do to better oversee workloads and monitor morale to ensure employees aren’t taking on more than they can handle? Maintaining a healthy work environment is paramount for employee recruitment and retention in the most competitive markets.
3. More Career Opportunities
With room to grow within the company, an employee feels valued and can envision a future role. Eighteen percent of employees in the QuickBooks Payroll survey who said they’d leave their company in the next two years rated finding better career opportunities as the top reason for making the change. People who have career opportunities within their companies will be less likely to seek out other avenues to advance their careers, instead bringing their strengths and experience to more coveted positions. If your company isn’t offering opportunities for advancement, offer learning and development benefits so each employee can grow in their current role.
As wages stagnate, employees will naturally begin looking for opportunities to advance their careers. Employers who invest in employees will have better luck retaining their most valuable workers and keeping a competitive edge, no matter if the unemployment and wage rates continue to deviate.
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