The ever-tightening job market holds a message for U.S. employers: work harder to hold on to employees, or they’ll be gone.
Almost two of every three workers at mid-sized employers are open to leaving for another job, according to a 2016 survey from the ADP Research Institute released Friday. While a 13 percent increase in pay would be a trigger to move, 46 percent of employees said they’d consider another job even at the current salary or less, provided other expectations such as a better career path were met.
Employers, already having a hard time finding new hires of the kind they want, also need to focus more on retention amid the lowest jobless rate since 2007. The theme was reinforced by three other reports this week: Subdued firings kept unemployment claims last week near a four-decade low; job openings reached an eight-month high in March; and in April, the proportion of small firms citing job openings as hard to fill was the highest since 2000.
Seventeen percent of workers are actively engaged in a job search and another 46 percent would consider moving if a tempting offer came along, amounting to 63 percent of the staff being open to leaving, according to ADP’s survey, taken in September, of 2,156 employees and 800 mid-sized businesses with 50 to 999 workers.
It also showed employers have only a partial grasp of how much of their workforce they risk losing to the competition. Firms overestimated the share of active searchers, and underestimated the share of those who were passively looking for a switch.
Wages matter, but they’re not always the clincher for those who seek more from their workplace, ADP said. For some, a better work-life balance and opportunities for immediate advancement would be among the incentives to move to another employer, even if the new pay package resembles the old.
Overall, 27 percent of workers said in the first quarter that they had switched jobs in the past year, the largest share since ADP began the separate series in 2014.
The U.S. is near full employment, one reason why Federal Reserve policy makers — who also watch job-market churn — are expected to raise interest rates in June. Yet pay growth remains relatively modest. Hourly earnings adjusted for inflation rose 0.4 percent in the 12 months through April, the Labor Department reported on Friday.
Clearly, the tight labor market is driving a wedge between what employees want and what employers are offering. At some point, though, workers in America could see fatter paychecks, and more.
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