Homeowners don't typically think about installing a new alarm system until after they've been robbed. The same can be said about employers when it comes to protecting staff – their most valuable asset. If the 2018 job market turns out how I think it will, employers will need to immediately change their mindset to avoid having their best people stolen from under their noses.
Reading the Globe and Mail's recent report on Canada's jobless rate hitting a four-decade low reinforced the results from our annual Salary Guide Report. We connected with thousands of employers across Canada to get a read on their attitudes heading into 2018.
One common theme is that most employers are charging into the new year with confidence about their business and the economy. More than half told us their business activity increased over the past year and nearly three-quarters said they expect similar results in 2018. By most accounts, it was a great year and in response, many employers began building up their permanent staff levels.
But a new threat is looming that many employers have overlooked: In such a strong job market, an increasing number of employees are prepared to walk out the door for another job.
There are several factors influencing this attitude. A majority of Canadian employers plan to offer pay raises that amount to less than 3 per cent – a low we haven't seen in six years. Confidence is up, plans are ambitious and hiring levels are really rolling, but employers are either unwilling to commit financially to their teams or they simply don't understand the level of risk associated with this path, particularly in the face of our current economy.
I'm struck by the number of employers who appear ready to capitalize on a better market but haven't given thought to how a surge in staff turnover could adversely impact their business. Perhaps they haven't suffered the effects of good people walking out the door. Stated simply, things have changed and bitter lessons await those business owners and operators who fail to adequately take heed and protect themselves.
In 2014, 78 per cent of Canadian employees were prepared to leave their current job for "the right offer." That number was unchanged for years. Today, that figure sits at 89 per cent. The job market is extremely strong and the risk once associated with quitting is no longer. "If it doesn't work out, I'll find something else" is today's attitude.
In response, many employers say they've taken a "no holds barred" approach to hiring new talent and admit to side-stepping their own salary rules to get new people through the door. This is what's known as a "two-speed approach" to salaries and it's exceedingly dangerous territory that can do irreparable damage to relationships, reputation and morale. There are few things more emotive than finding out that the new guy is paid more than you. And remember, with Ontario minimum wage workers recently receiving a $2.40-per-hour pay hike, expectations for workers at higher pay grades have been raised.
So, what is to be done about this? A quick answer is to increase salary levels but in many instances, it's not always that simple or for that matter, affordable. Thankfully, there's more to compensation than dollars and cents.
While pay is important, in fact, it accounts for about 40 per cent of career considerations. The remaining balance comprises job progression and opportunities for growth, company culture, and benefits. In my two decades of monitoring work force trends, I can say without fear of contradiction that people routinely accept less pay if the company offers a clear-cut career path and a workplace culture that matches their personality and work style. The good news is that small and medium-sized companies are better equipped to react to these needs than they might think.
When employers consider staff expectations for career progression, they often think in terms of promotions and salary increases. In fact, people actually want to feel like they are learning new things. People believe that the relationship they have with their boss is a major contributor to professional development and how they feel about company culture. "If I respect my boss and feel like I am learning from them, my needs are being met." Investing time and effort into training and mentoring is great for staff development, and overall company stability.
Finally, benefits can have a considerable impact. Often employers offer benefits that are disconnected from what people really want and make little to no difference on how people feel (car allowance, anyone?). Start by taking the time to ask staff what they want. My money says that training will come out close to the top. A 2-per-cent increase in salaries and investing in some professional training could cost less and have a more positive effect than a 3-per-cent companywide salary increase.
In any event, the job market has changed and it's practically guaranteed that employees, no matter how loyal, will be on the receiving end of unsolicited job offers this year. Whether or not they act on that offer comes down to whether employers have taken the right steps. Are you protected, or will you be burgled in broad daylight?
Rowan O'Grady is president of recruitment agency Hays Canada.
Source: The Globe and Mail