Pay ‘no longer as important to jobseekers’

Nick Elvin

Pay is losing importance as a decisive factor for workers, according to new research by business advisory firm CEB.

Overall, compensation remains the single most important point considered by workers globally when looking for a new job, but it was given priority by less than half of respondents (45.9%).

This figure is significantly lower in some countries such as the UK where only 23.6% considered pay to be the most important factor.

Internationally, dissatisfaction with pay comes second to lack of career opportunity as a reason for leaving. 35.5% of global workers leave their job because they are unhappy about their compensation package, compared to 41.6% who seek better career opportunities. In the UK, compensation is only the 8th most prominent reason for leaving (key for 24.7% of respondents), behind factors such as future career opportunity, people management and respect.

The expectations for switching premiums – the compensation uplift expected with a new job – are also on a downward trend despite the global economy and pay outlook recovering. The average employee today is expecting a 14.8% pay rise – compared with 16.8% in 2011.

CEB says the reasons why pay is in relative decline as a differentiating factor are twofold. Firstly, after a prolonged period of austerity, businesses are so focused on cost-control that there is very little room for manoeuvre on compensation and pay differences between companies are muted.

Secondly, Millennials – a growing presence in the workforce – believe they will work all their lives, in stark contrast with previous generations who looked forward to retirement. They focus less on earning enough for a comfortable retirement and more on doing a job that is meaningful to them – since they believe there will be no retirement to pursue interests and hobbies full-time.

Commenting on the findings, CEB executive director Brian Kropp, said: “Workers still want money – and always will – but this research demonstrates clearly that people are not just chasing the biggest pay cheque.

“Today’s employees crave opportunity to develop, to shine and to showcase their talents. At a time when few companies can afford dramatic salary rises, the focus for many will be on getting the non-financial aspect right.

“Even those with the biggest and most flexible recruitment budgets have to adapt to the new environment. Just throwing money at talent management is no guarantee of getting the best people in and keeping them; stimulating work and a good manager are every bit – and often more – important.”