By Dan Cook
solution provider PayScale has released a massive study that includes some predictions from employers about 2014 -- a year they expect to be marked by improved performance, a good deal of hiring and loads of retention challenges.
Last year demonstrated that companies were feeling gradually more confident about their prospects. That led to more and higher raises and cautiously more aggressive efforts to retain and recruit top talent.
The 2014 forecasting that emerges from the study offers insight into the ways that the last recession continues to shape financial outlooks and compensation and retention/recruiting strategies.
Although the economy clearly continues to trend up, executives are still feeling the burn from the last financial meltdown. Particularly within the enterprise, PayScale found, there remains a reluctance among fully a third of companies to believe in a continuing recovery. Now, their lingering lack of confidence can be seen in attitudes toward retaining talent.
continues to be a top concern for 2014 among employers,” PayScale reports. “This concern has increased steadily in importance since 2009, when most companies listed retention as only somewhat of a concern or not a concern at all.”
Of course, in 2009, everyone was still pretty much happy just to have a job. Now, resumes have been revamped, favors are being called in, and corporations are confronted with losing some very good performers. PayScale's interviews with the big bosses turned up trends that indicate companies are no longer sure what works best to keep the best people from leaving.
Let's consider some of the findings:
Overall financial performance
Hiring and compensation
- Companies are cautiously optimistic about 2014, with 72 percent expecting their financial situation to improve (up from 66 percent in 2013).
- Only 5 percent are expecting it to weaken (down from 7 percent in 2013).
- Small companies are the most optimistic about their future financial performance (75 percent of respondents).
- Medium companies are next, with a 72 percent confidence response.
- Just two-thirds of large companies expressed optimism about the coming year.
- The information, media and telecommunications industry is the most optimistic among major industries, with 84 percent of companies in this industry anticipating improved financial performance.
- Hiring is up over recent years with 54 percent of companies reporting plans to continue expanding in 2014.
- Raises are in the budget for 2014 at 88 percent of responding companies (compared to 83 percent awarding salary increases in 2013).
- The average raise will be 4.5 percent.
- Employee retention is either a high or top concern for 57 percent of companies, up considerably in the five years PayScale has done this study.
- Most concerned about retention were those in the Information, media and telecommunications industry, with a 70 percent “high or top concern” response.
- Companies plan to recruit and retain high-performing employees with merit-based pay plans and additional learning and development opportunities. But they are unsure of what sort of packages will keep top performers from testing the job market.
The lack of innovative retention strategic thinking demonstrated here underscores PayScale's conclusion that companies may be battling a raging inferno with a garden hose.
“In analyzing this year’s survey results, we saw more encouraging economic signs than we’ve seen in recent years as companies are growing in size and offering raises to current employees. Yet this increased optimism comes along with a good dose of caution as most companies lack sufficient business insight to know what to pay to effectively attract and retain the right people. With the more competitive economy of 2014, companies will be challenged to balance growth with smart decisions about how to compensate talent,” a summary of the report states.
Originally published on BenefitsPro.com