Is Your Workforce Safe From Poaching?

 

 Compensation looks to be going up in 2011 and you may need to keep an eye on your best people.

First, how do we know compensation is going up? Multiple surveys (Towers Watson & Co, Mercer, Hay Group and the Conference Board) have determined that median/average increases will be somewhere between 2.7 and 3 percent. That’s more than the last couple of years. A special report in Workforce Magazine, describes this as a “thaw” in compensation.

What does this mean? Is it good news for your project? The answer depends on what employers and employees think of the change. When employers are surveyed,

• 83% say that increased compensation affects retention
• 48% say that greater job security affects retention
• 56% say that more flexible hours affects retention

 Do employees agree? How far off (in percentage terms) do you think employers are from their employees?  When employees are surveyed

• 10% more employees than employers said that increased compensation affect retention
• 39% more employees than employers said that greater job security affects retention
• 24% more employees than employers thought that more flexible hours affected retention

Employers generally underestimate the impact of these factors. That means employers can be surprised by an exodus of workers when the stars align correctly.

US companies froze pay and reduced workforces more than other countries have over the last couple of years. In the near future, US companies are likely to maintain an emphasis on paying more for the highest performers, but they will also restrict salary increases for everyone else.

 So how will this affect your project? When other companies start raising salaries, your project workers are going to be interested. When other companies stop layoffs and start hiring, your project workers are going to be checking into job postings. When other companies start promoting their new flexible hours to attract the best performers, your best people will have a hard time rationalizing why they should stay put.

 It will take a while for the economy to start humming again, but this in no reason to become complacent about your workforce. Industries that have already started growing will be looking to poach your high performers - and your organization may be underestimating what it will take to keep them home.