Employees More Than Ready to Jump Ship for Higher Pay
April 20, 2016 – More than half of employees globally (56 percent) believe they must switch companies in order to make a meaningful change in their compensation, according to the ‘Global Salary Transparency Survey‘ released by Glassdoor.
The report also found that the majority of employees globally (69 percent) wish they had a better understanding about what is actually fair market compensation for their position and skill set at their company and in their local job market. Interestingly, the survey reveals fewer women understand how pay is determined at their company than their male counterparts (53 percent vs. 65 percent, respectively).
“Even in 2016, most employees — especially women — remain in the dark about what fair pay is for their particular role. The majority of employees report their companies do not share pay data internally even as most employees believe salary transparency is good for business and employee satisfaction,” said Dawn Lyon, Glassdoor vice president of corporate affairs and chief equal pay advocate.
Hunt Scanlon Releases New Trends Report On Executive Recruiting
Which way forward? This is the defining question being asked among talent acquisition professionals and the executive recruiters who service them. This 161-page industry report takes a hard look at the challenges ahead.
| Get Info |
“Employers need to understand that perpetuating salary sharing taboos can ultimately impact retention,” she added. “More than half of employees around the world feel that in order to get a significant raise they need to jump to a new company. Our data shows that by helping employees understand fair pay and providing clear pathways for advancement, employers can increase employee satisfaction, engagement and retention.”
Employees Believe They Need to Change Jobs to Earn More Money
Perception among employees appears to be that the grass is greener elsewhere, as many believe they could earn more at another company. Close to half (49 percent) of U.S. employees feel they must switch companies in order to obtain any meaningful change in compensation.
Among U.S. employees, Millennials aged 25 to 34 (57 percent) and Generation X’ers aged 35 to 44 (58 percent) and those aged 45 to 54 (53 percent) are more likely to believe they need to change companies to make more money compared to those 55 and older (32 percent).
Overseas, more employees in France (64 percent) feel they must switch jobs to obtain meaningful compensation changes than those in all other countries surveyed except Germany.
Most Employees Report Their Companies Do Not Share Salaries Internally
Times are changing, but sharing salary information among employees at a company is still not the norm, and the U.S. is behind when compared to other nations. More than one third (36 percent) of employees globally say they know their company discloses salary information internally. Fewer U.S. employees say their company discloses salary information (31 percent) than employees in the Netherlands (50 percent), U.K. (45 percent), and in Canada (45 percent).
Employed men in the U.S., France and Germany are more likely than their female counterparts to say their employer shares information about pay levels within the company. (In the U.S. 38 percent of men vs. 23 percent of women; France 42 percent of men vs. 23 percent of women; Germany 35 percent of men vs. 20 percent of women).
The differences along gender lines raises questions related to whether men have access to more salary data than women, if they perceive to have more knowledge about salary at their company (vs. actually having pay insights), or if they are asking more direct questions of leadership regarding pay levels.
Globally, the majority of employed adults (70 percent) believe salary transparency is good for employee satisfaction and approximately the same percentage (72 percent) believe it is good for business.
Lack of Understanding Persists Around How Pay is Determined
The survey also uncovers that globally, employees have a lack of understanding about how their pay stacks up in the market. More than two thirds (69 percent) of employed adults across the globe wish they had a better understanding of what fair pay is for their position and skill set at their company and in their local market.
More than one-third (36 percent) indicated they do not have a good understanding of how people are compensated at all levels within their company. More Canadian employees (71 percent) report having a good understanding of pay levels at their company than any other country in the survey (U.K. 61 percent; U.S. 60 percent; the Netherlands 56 percent; France 52 percent; Switzerland 49 percent; and Germany 43 percent).
Clarity around compensation practices is divided along gender lines. Globally, more employed men (59 percent) than employed women (51 percent) believe they have a good understanding of how people are compensated at all levels in their company. In the U.S. the divide is larger with 65 percent of employed men who believe they have a good understanding of compensation levels in their company, compared to 53 percent of employed women.
One thing regarding compensation that all employees agree on is that money talks. Multiple reports have found that employees are willing to switch jobs in coming months in order to achieve higher pay.
According to a study released by Penna, 48 percent of people claimed the main reason for a job change was that they were searching for better pay and benefits. Of those, the survey found that employees aged 18 to 24 were the most likely to be planning a move this year, while 25 percent of those aged 25 to 34 are considering leaving their posts.
And with hiring remaining competitive, companies may be feeling increased pressure to stay competitive with compensation.
A recent study by CareerBuilder revealed that while 25 percent of employers anticipate no change in salary levels in the second quarter compared to the same period last year, 25 percent expect to boost salaries by at least five percent. Forty-four percent anticipate there will be an increase of four percent or less while two percent expect a decrease and four percent are undecided.
From the employee perspective, workers are confident looking ahead when it comes to the job market, job security and pay raises, according to Glassdoor’s first quarter ‘Employment Confidence Survey.’ Nearly half (46 percent) of U.S. employees expect a pay raise or cost-of-living increase in the next 12 months.
According to the Korn Ferry Hay Group ‘2016 Salary Forecast study,’ workers are expected to see wage increases of 2.5 percent, the highest in three years.
“This year’s global salary forecast shows that for the majority of countries real wage increases in 2016 are set to be the highest in three years,” said Philip Spriet, global managing director for productized services at Hay Group. “Differing macro-economic conditions means there are stark variations globally, but overall decent pay increases, coupled with extremely low (and in some cases, zero) inflation, mean that the outlook is positive for workers.”
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media
