ALEXANDRIA, VA – Today, the SHRM Research Institute released complementary reports, together forming Better Workplaces on a Budget study. The first report details major drivers of employee turnover, which shows 39 percent of HR professionals in the U.S. report inadequate compensation as the biggest reason employees are leaving. This report also offers insight into current and needed budgets to address turnover and identifies lack of career development and advancement as having the biggest budget gap.
"As each organization is unique, the first step is for HR professionals to identify key reasons why their employees are leaving. They can then benchmark those reasons and their available budget against the nationwide data and identify strategic solutions to create better workplaces," said Mark Smith, Ph.D., director of HR thought leadership at the SHRM Research Institute.
The workplace chaos wrought by the COVID-19 pandemic is finally subsiding, only to be replaced by the Great Resignation coupled with economic uncertainty that is forcing organizations to cut expenses. HR professionals face the difficult challenge of attracting talent and keeping top workers with little money to spend on the problems that are driving turnover. The SHRM Better Workplaces on a Budget Recommendations report offers specific strategies for addressing each of the main drivers of turnover. Importantly, many of these recommendations can be implemented with little to no additional budget.
Key findings and recommendations include:
- Inadequate total compensation was the most common driver of turnover, as it was ranked in the top three reasons by 74 percent of HR professionals and listed as the top reason by 39 percent.
- When asked how much more compensation budget would be required to address the issue, HR professionals generally agreed that 8 percent to 10 percent additional compensation budget would be required.
- The top recommendation for addressing this concern is providing total rewards statements. While this would not raise salaries, it would allow workers to see a more complete picture of what organizations are paying to employ them.
- The second-highest reason was lack of career development and advancement, which was listed in the top three by 61 percent of HR professionals and as the top reason by 21 percent.
- The top recommendation for addressing this concern is increasing promotions from within and publicizing these promotions to others in the company so workers can see realistic advancement opportunities.
- The third-highest reason for turnover was lack of workplace flexibility, which was in the top three reasons for 43 percent of HR professionals and the top reason for 13 percent of respondents.
- The top recommendation for addressing this concern is employing a "one-to-one" approach. As different employees are looking for different types of flexible arrangements, organizations should be open to unique and creative solutions.
- Fourth on the list was unsustainable work expectations—30 percent of HR professionals had this in their top three reasons, and 6 percent listed it as the top reason for turnover in their organization.
- The top recommendation for addressing this concern on a budget is conducting work reviews. For many jobs, there are work activities of lower priority that can be eliminated or reduced to alleviate overload for key employees.
- Fifth on the list was uncaring and uninspiring leaders, which was in the top three for 26 percent of HR professionals and in the top spot for 9 percent of respondents.
- The top recommendation for addressing this concern is clearly defining expectations for leaders. When organizations are clear in their definitions of proper leadership, they are much more likely to identify and keep good leaders.
Methodology
In August 2022, the SHRM Research Institute surveyed U.S. HR professionals from the SHRM Voice of Work Research Panel. Responses were collected from over 1,500 professionals. Because of the scientific nature of the survey, weighted survey results can be expected to accurately represent the population of HR professionals in the United States. The margin of error is approximately + 3.9 percentage points.
About SHRM
SHRM, the Society for Human Resource Management, creates better workplaces where employers and employees thrive together. As the voice of all things work, workers and the workplace, SHRM is the foremost expert, convener and thought leader on issues impacting today's evolving workplaces. More than 95 percent of Fortune 500 companies rely on SHRM to be their go-to resource for all things work and their business partner in creating next-generation workplaces. With 300,000+ HR and business executive members in 165 countries, SHRM impacts the lives of more than 115 million workers and families globally. Learn more at SHRM.org and on Twitter @SHRM