Study Reveals Recruiting and Retention Trends, Employee Perceptions

The second annual Employment Dynamics and Growth Expectation (EDGE) Report released late last month by Robert Half International (RHI) and Careerbuilder.com shows hiring managers and employees with very different perceptions of the job market. Recruiting is more challenging today than one year ago, hiring managers say, with 81 percent reporting difficulty in finding qualified candidates, up from 55 percent last year. Employees, however, are less likely to negotiate higher salaries today. Only 12 percent of employees plan to seek higher salaries in 2006, down from 20 percent in 2005. The survey was conducted from July 27 through 31 among 3,000 workers, including 1,000 hiring managers, in all industries, nationwide.

RHI and Careerbuilder.com say that the survey was designed to compare and contrast the perspectives of hiring managers and workers to determine which group has more clout in the job market.

Hiring managers said the primary cause of problems finding qualified workers was a shortage (52 percent), followed by an inability to offer competitive compensation (21 percent). The EDGE report also found that:

  • More than 80 percent of hiring managers anticipate that it will be equally or more challenging to locate qualified candidates 12 months from now;
  • Nearly half of hiring managers believe their ability to recruit in the next 12 months will be hampered by high energy prices;
  • Hiring managers consider professional and technical staff-level positions the most difficult to fill.

According to the EDGE report, a separate RHI survey found that some firms have already instituted policies to assist staff with high gasoline prices, including increased expense guidelines for employee-incurred mileage, allowing more staff telecommuting and encouraging carpooling.

In 2006, as in 2005, most hiring managers (54 percent in 2006 and 60 percent in 2005) do not plan to increase salary packages for new hires, although the results show a growing number of managers who see compensation levels increasing.

Employee turnover has been steady for the past two years, at 21 percent, but 30 percent of employers report having instituted programs aimed at preventing turnover, with salary increases, bonuses and flexible work schedules mentioned most frequently. Bonuses were more common this year -- 20 percent of managers reported bonus awards -- than last, when only 12 percent of managers gave bonuses.

Employees do not seem to be aware of their relative strength in the current job market, the EDGE report says. Most find the job market today similar to what it was a year ago and one-quarter (26 percent) are looking for a new job, a slight decline from last year (28 percent). But in response to the question “If you were to accept a new job offer today, how likely would you be to try to negotiate a better compensation package with your new employer compared to 12 months ago?”, only 29 percent said that they were more likely to negotiate.

The EDGE study did not ask employees about compensation increases in the last year, but in the company’s press release, Matt Ferguson, CEO of CareerBuilder.com, said, “Forty-five percent of workers reported their compensation has increased in the last year, yet a much smaller number are willing to ask for a better deal going forward, likely due to insecurities about the United States economy and job market.”

Employees cited health insurance as the most important benefit to them, followed by flexible work hours and a 401(k) plan.

“While competitive compensation and benefits are important to employees, so is working for a stable company with a positive work environment,” said Max Messmer, chairman and CEO of RHI. “Firms that cannot offer top salaries should look at what they can offer that others do not, including professional development programs.”

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