Frozen salaries, stalled careers hint at 2022 retention crisis
Findings from this year’s Hays Specialist Recruitment Salary Guide show two-thirds of Canadians (65 per cent) are seriously considering leaving their current role — an all-time high for the annual report.
The new figures represent a 16-point spike over last year’s high of 49 per cent as employees cite factors including compensation, well-being, declining job satisfaction and a lack of career growth, according to a news release.
Hays experts say the country’s rebounding economy and tightening job market are contributing to a worsening staff retention crisis and warn that employers should brace themselves for a long, difficult road ahead.
Based on responses from more than 4,200 employers and employees, the 2022 Salary Guide finds the majority (86 per cent) of Canadian employers have confidence in the country’s economic recovery.
Nearly a third say their business is in a state of growth and more than half (53 per cent) plan to increase permanent headcount in the next 12-months.
In contrast, when asked about well-being, only 34 per cent of employees describe it as either positive (34 per cent) or somewhat positive (48 per cent) and a combined 18 per cent report feeling somewhat or very negative.
Employee sentiments also show a year-over-year decline in job satisfaction (51 per cent versus 58 per cent one year ago).
As the country’s post-pandemic recovery gains momentum, most employees appear to be directing their energy into quitting their current job and finding work elsewhere.
“People are reading headlines about the roaring job market and that’s lessened their perceived risk of switching jobs,” says Travis O’Rourke, president of Hays Specialist Recruitment Canada.
“Employees are also motivated by two years of stalled salaries and they’re packing up for the company down the street that’s paying more. The pandemic clouds are parting, people have seized on the country’s economic and employment rebound and they’re making moves with wellness and dollars in mind. As much as it pains me to say it, many employers will have to get comfortable with turnover throughout 2022.”
Retention and raises
Confirming that staff departures are more than empty talk are Hays’ numbers that show staff have already begun their exit. Forty per cent of employers concede that people have walked over higher compensation offered elsewhere and they are having difficulty filling vacancies.
Some might assume the salary issue will be resolved in the final weeks of the calendar year, a time when staff typically receive raises however, employers have other ideas. Less than a quarter (23 per cent) of employers say they will increase salaries and where raises do happen, staff can expect conservative amounts between one and five per cent, which is only a slight bump over 2021 when nearly three quarters of salaries were frozen.
“We’re seeing everything from no raises to unsustainably high levels of spending to get new candidates through the door and both approaches are problematic,” added O’Rourke. “Paying too little triggers departures but throwing big dollars at staff could lead to layoffs when the market levels out in 2022 or 2023. Employers need to understand what their people are worth and adjust accordingly.”
While findings show that the talent struggle is real, employers were asked about their other strategies for retaining staff. Encouragingly, half are building better communication and 39 per cent are focused on improving company culture – moves considered critical when much of the country’s labour force is still working remotely. Employers have also started making changes in support of their teams including encouraging people to take vacation, actively promoting work-life-balance and mental-health days.
- Recruitment processes: 38 per cent of employers say they have made no changes to how they attract candidates
- Training and skill development: 44 per cent of employees say no training or skill development has been initiated by their employer
- Diversity is a must-have: In a companion study, 72 per cent of employees say it is important for their employer to have ED&I goals but Hays found only a third of companies have something in place
- Outsourcing: As employers struggle to find applicants, 22 per cent already have or are planning to outsource some jobs and 19 per cent already have or are planning to nearshore positions in the next three years
- Automation on the rise: Top areas companies are looking to automate or have already automated positions include accounting and finance, operations, administration and human resources and payroll.
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