The prospect of a salary increase is prompting more workers to change jobs while fewer employees are moving with the sole purpose of progressing their career, research has found.
A report carried out by Adare Human Resource Management suggested career progression is becoming a less important factor in workers switching jobs with 43 per cent of leavers citing it as their main reason this year. That compares to 65 per cent last year while at the same time salary increases caused 23 per cent of people to move jobs, up from 19 per cent last year.
“In some ways this was to be expected given the healthy state of the economy at present,” said Derek McKay, managing director of Adare Human Resource Management. “However, it flies in the face of much of the accepted wisdom in relation to the generation Y or the millennials who are supposedly more interested in purpose than profit.”
Adare’s 2018 HR Barometer found that 34 per cent of respondent companies indicated they’ll offer increased salaries to improve employee retention, up from just 14 per cent last year. That increase comes as the cost of replacing an employee has more than doubled since last year to €13,100.
Four in five of the 260 respondent companies reported having already increased salaries this year while just under half said they already intended to increase salaries next year.
Despite the upward pressure on salaries staff turnover remained relatively stable at an average of 11 per cent, compared with 10 per cent last year.
In the Republic’s contracting labour market, Mr McKay advised that the balance between “recruitment and retention is particularly critical” considering it takes large organisations more than six weeks to recruit a new employee.
“Retention initiatives should align to the reasons employees are leaving and investments in them need to be balanced against the cost of hiring new employees to replace those leaving,” he added.
Established in 2003, Adare is a provider of employment law, industrial relations and hum resource management advice. The company’s study covered companies with over 46,000 employees and the margin of error is plus or minus 6 per cent.