New Zealand organisations are facing a serious business risk with almost six out of ten (58.2%) employees either actively or passively seeking new roles, according to Hudson’s Salary & Employment Insights Guide 2014.
Higher remuneration is the top reason employees are considering their options with half believing they would work even harder for a higher salary.
Other main motivators for employees changing jobs include a role they are more interested in and an organisational culture that will make them happy.
Despite encouraging economic indicators – business confidence is rising, unemployment is declining and hiring expectations are positive in most regions – Hudson’s research shows employers are facing the very real risk of losing key talent and need to take immediate steps to retain staff in order to deliver desired business performance.
“Illustrating just how confident the market is feeling, nearly two-thirds of employers believe their organisation will meet or exceed targets within the next six months,” says Roman Rogers, Executive General Manager, Hudson New Zealand.
“Importantly however, this optimism assumes that organisations will have the right talent in place to achieve what they need to.
"With employees feeling restless and the labour market tightening, the time is now for organisations to act, to scale their businesses, secure the best talent and take advantage of the opportunities that an improving economy offers.”
“Confident hiring sends a strong message from both a business growth and cultural perspective, and will help mitigate a potential triple cost scenario: the costs of a disengaged workforce, the high costs of replacing staff and the costs of losing key talent.
“The impact and cost of replacing, training and up-skilling new workers is likely to be much higher than retaining and developing staff that are already performing well, so employers need to exercise sound judgement about where to invest and implement retention strategies beyond salary increases.”
While salary was the top motivation in keeping employees in their current role, a promotion (17.0%), increased professional training and development (13.3%), greater flexibility around working hours (11.4%) and increased leave (5.5%) would also entice them to stay.
When it comes to package benefits most valued by employees, money talks again with bonuses ranking highest (68.9%), followed by increased annual leave (48.6%), flexible working arrangements (37.4%), increased superannuation (35.7%) and private health insurance (35.4%).
Hudson’s research also shows there is broad acceptance across the market that base salary increases in 2014 will be required, particularly to retain high performing staff. Seven in ten (71.1%) of employers intend to award increases in line with CPI growth (2-3%).
Hudson advises that as most people are seeking an opportunity to advance their careers, skill sets and experiences, effective retention strategies include enabling employees to develop their own career paths via options such as stretch assignments, secondments to other business functions, taking on new projects, training and development. Flexible working arrangements are also popular.
“Employers have options beyond salary, but they need to assess their retention strategies and act now to retain talent," Rogers adds.
"We know strong leadership impacts engagement, driving productivity and increased employee retention, so having strategies in place to ensure managers and leaders are able to lead effectively in the rapidly changing marketplace is a must-do in 2014."