Could hoping from one company to another lead to a greater wage growth than patiently waiting for a promotion? Yes, but the problem of employee retention goes beyond the simple issue of salary.
In 2014, the Ordre des conseillers en ressources humaines agréés forecasts an average wage increase of 2.7% in Quebec, against an inflation rate of 1.7%. This means that the actual increase is only of 1%. The temptation to go elsewhere for a bump in one’s pay is therefore clear for employees.
A profitable decision?
If frequently changing jobs can surely boost short-term earnings, it is not necessarily a beneficial choice in the long term. “People lose sight that they are not building seniority in the rankings,” states CHRP and GE’s former Senior Vice-President of Human Resources, René Jolicoeur. “Ultimately, they lose out in terms of pension plans and benefits related to seniority.”
From the employer’s perspective, accelerated employee mobility has both its advantages and disadvantages. While it increases recruiting costs, it helps to bring fresh blood into the business and allows for inadequate or otherwise demotivated employees to leave. “A greater turnover rate can also make it easier to comply with pay equity laws,” says Jolicoeur. In terms of training, a frequent arrival of new employees can indeed be costly, but the fact that most people have recently been trained elsewhere could be an added benefit.
Potential Solutions
For the human resources consultant, companies would benefit should they provide their employees with larger sets of information. “We have to explain the company’s policies on social benefits, wages and wage growths,” says Jolicoeur.
Improving worker retention also requires a better consideration of other elements that will make them stay. For Jolicoeur, the question of compensation is often secondary. “The salary is rarely what motivates an employee to resign,” he says. “Job hoping is better explained by a fear of commitment and a lower tolerance for employers who drag their feet in helping employees develop within the organization.”
Jolicoeur therefore recommends this tool for businesses: the stay interviews. Rather than waiting for an employee’s exit interview to learn more about the reasons for their discontent, it is preferable to get continual updates throughout the journey. “When I worked for GE, I used to conduct these stay interviews with people who had potential and I asked them what made them stay and what would make them leave,” he says.
Investing in the training of front-line supervisors is also a requirement. “Because we join a new company, but we leave behind a boss,” says Jolicoeur.
Accelerated employee mobility mostly concerns Generation Y. Developing specific mechanisms aimed at those particular employees will allow for a greater worker retention. “We must find out what the younger generation wants, work for it and surprise them,” believes Jolicoeur. Achieving this means investing in coaching and mentoring programs.