Compensation Management News
State:
Category
Topic *Please pick a topic
March 22, 2001
Employees Again Saying 'Show Me the Money'
WhaFor a Limited Time receive a
FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with
customized information for your industry, location, and job.
Get Your Report Now!
While stock options were the hot currency of the New Economy scarcely 12 months ago, employees today now regard cash and freedom as king, according to a new nationwide survey of working Americans.
In the third annual BridgeGate Report, conducted in February, employee retention is more likely to be influenced by salary increases than by improved benefits, flexible work schedules or stock options. A total of 682 part-time and full-time employees were asked which factors would be most likely to convince them to continue working for their current employer.
The majority of respondents, slightly more than 50 percent, indicated that "a raise" would most influence them to remain with their present company, up from the 46 percent who cited a salary hike in last year's report.
By contrast, just 40 percent of those surveyed placed non-monetary concerns ahead of increased pay. This year's survey marks the first time in the three-year history of the BridgeGate Report that significantly more respondents said they would remain at a job for higher compensation, over the combined total of respondents most interested in non-monetary offerings: benefits, flexibility, stock options and training.
In perhaps the most significant finding of the report, fully one in seven of those polled could not identify any specific action employers could take to ensure retention, up from one in 16 two years ago.
Stock options have taken a dive as a retention tool, thanks largely to a tumbling Nasdaq and diminished valuations of pre-IPO startups; just seven percent of respondents placed stock options first, compared with 12 percent last year. The survey also recorded a small decrease in the number of workers who placed improved benefits at the top of their list. The latest BridgeGate Report did note a slight increase in the value of more flexible work schedules - 14 percent in 2001, up from 12 percent in the year 2000 report.
"Increasingly, people are again saying, `show me the money,' I'll figure out the rest of my life on my own," said Dudley Brown, managing director of BridgeGate. "Half of those in this year's sample don't buy the idea of assigning responsibility for their career to their employer. It's like investing, individuals want to take control of their destiny, whether in the market or with training, benefits and the like. That's especially true now, amid the growth of enabling services that let you do it yourself."
"Employees don't even know what it would take to get them to stay, how damning for employers, and bad news for workers as well," Brown said. "What's truly frightening for companies is simply this: how do you make an employee happy who doesn't even know what it would take to get them to stick around? They're that disillusioned, and the percentage is going up every year, more than doubling since our first survey."
"All of this underscores the trend toward a 'free agent nation' and signals a decisive move away from corporate paternalism," said Brown. "And that in turn raises a huge issue for employers and employees alike: how do you compete with people who are thinking like free agents?"
In last year's survey, 46 percent stated they would stay on for a salary increase, with an equal percentage (in the aggregate) responding to various non-monetary rewards: employee benefits, flexibility, stock options or training. The inaugural survey, released in early 1999, found that less than half the sample (43 percent) named "a raise" as the primary influencing factor, while 50.5 percent cited non-monetary options.
Employee loyalty and factors influencing retention were often based on the gender, age and income of the respondents:
- Female employees are more interested in a flexible work schedule than their male counterparts (17 percent vs. 11 percent) and were more likely to respond positively to "a raise" (52 percent vs. 48 percent); 18 percent of males cited improved benefits, as did 14 percent of females. Only eight percent of males identified stock options, as opposed to 17 percent of males in the year 2000 survey. The female response to stock options remained consistent from last year's survey, at six percent.
- In every age group but those 55 and older, roughly 50 percent placed the highest value on increased pay. For those 55-to-64, 48 percent cited "a raise," but for employees over 65, that response dropped dramatically to nine percent. Interestingly, both the oldest group, the over 65s, and the youngest, the 18-to-24s, ranked flexible work schedules as their second priority, at 31 and 23 percent, respectively. Among those ages 35-to-44, improved benefits received the second highest response, at 23.5 percent.
- While household income plays a role in the employee retention debate, that role isn't always predictable. Of those respondents with household incomes of less than $25,000, 47.5 percent said more money would influence a decision to stay with an employer, while 21 percent ranked improved benefits first. Conversely, of individuals with household incomes in excess of $75,000, 52.5 percent said they would continue with a current employer if given "a raise," while a scant 11 percent cited improved benefits as their employer's top lure.