Robert Half, through its survey, reveals the shift in employee awareness with regard to their roles in an organization and what they expect in strenuous times such as the COVID-19 pandemic.
Over the years many reasons have been identified as the factors that drive engagement and retention within employees. While several parameters have been revealed, pay continues to remain the top one.
Robert Half’s new surveyOpens a new window reveals that 88% of the senior managers surveyed are worried about their company’s ability to retain valued staff, with 47% of them being ‘very worried’. From the entire set that shared they were worried 39% have indicated that their concern stems from salary reductions or planned salary freezes for the near future.
When the pandemic hit the world, the first thing that businesses did were pay cuts and salary freeze announcements followed by layoffs and furloughs. This is the typical reaction of companies as employee pay/wages has been thought of as a cost center. Few companies think of it as an investment. That is why during a crisis, the cost-cutting measures most certainly involve employee pay cuts.
New Pay Trends Reflect Changing Employee Awareness
The concern of the managers regarding the current employees exists alongside their openness to discuss and negotiate pay with new hires. 86% of the senior managers shared that they are more likely to negotiate salary when it comes to new hires today than a year ago. From this set, 36% said they are more open to discussing the starting pay with candidates now.
“Professionals are savvier about salary trends than ever before, and many candidates are comfortable talking about pay early in the interview process,†McDonald noted. “Employers should research compensation trends regularly and be prepared to move quickly and negotiate as soon as they come across promising talent.â€
Both the above insights with respect to existing talent and new hires is displaying the heightened awareness of pay that employees have now. They are also able to overcome their hesitation to ask for better pay or analyze their compensation in the context of the value they add to their organizations.
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Right Pay Impacts Employee Retention and Talent Attraction
The data is clearly pointing in the direction of how compensation needs to become much more than a cost that is added in the balance sheet. When used strategically and fairly it can become the most powerful way to attract and retain talent.
Current Employees
When pay cuts were announced by several firms the broad idea was to preserve more jobs. Understandably so, since the reduction in pay would allow the companies to sail through a situation where revenues had become next to non-existent. Some like Tesla did it for a short term where pay reduction was between 10–30 % based on the role of the person and other steps such as delaying merit increases, promotions, and bonuses in that quarter. At the end of June, the period of pay reduction was over. Others have announced pay cuts with no clear sign of when they will end. But maintaining the current pay levels was important, especially when many workers have had their partners losing their jobs. This might result in disengagement which is worsened due to the fact that they cannot leave the firm either considering the lack of jobs in the market. With firms being cash-strapped the only thing that can enable them to ensure engagement is the presence of voluntary benefits. This has been shared even through surveys such as the Corestream one.
New Hires
Millennials and other new-age employees have a higher degree of awareness related to their compensation and how their work is valued by the employer. Their understanding of what is right pay is clear, especially from an equity perspective. This places a higher onus on organizations to vary of the trends and the type of compensation packages that can attract them.
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One important aspect of compensation that gets missed out often is communication. Whether internal employees or potential candidates, employers need to invest time and effort in designing the right communication strategy to convey changes.
Note – The online survey is conducted by an independent research firm on behalf of Robert Half from July 10 to August 9, 2020. Responses include 2,800 senior managers at companies with 20 or more employees in 28 major U.S. cities.