The Herman Trend Alert|
July 12, 2006
Salaries Becoming Competitive Tool Again
For the past few years, money has not been the strongest motivator in the employment market. Meaningful work and life-work balance have become the most influential attractors. People are particularly looking for flexibility in working hours so they can enjoy more personal time.
Indications are that more people are making employment decisions based on personal values. They are looking for work that they can enjoy, people they like to work with, and a work environment that is both comfortable and pleasant. Money has not been a major differentiator, since workers have become satisfied with their earnings levels. Of course, we all want more money in our pockets; compensation has just not been a driving force in choosing between one job and employer and another.
When competition for competent employees intensifies, employers tend to emphasize earnings potential. They increase the levels of wages or salaries—and benefits-—to entice people who actually would have been happy with their current incomes. When workers have a choice for doing what they like for satisfactory incomes versus performing their preferred kind of work for higher incomes, the decisions are easy.
The monetary incentive to leave one employer and join another can be strong, especially if the income level is seen as the only difference. When employers need to increase staff, attractive compensation packages can be effective tools to lure talent from one employer to the competition.
From India comes news that as employers compete in the recruiting and retention wars, salaries have increased substantially. A recent Salary Guide published by Kelly Services reports that India has seen the highest average salary increase of 13.9 percent. The greatest movement is in the information technology-enabled industry, where a 17.9 percent average increase has been experienced.
The Kelly study, the first of its kind, showed that IT, ITes (Information Technology enabled systems), telecom, and pharma were the most active in offering high salaries and instant job offers. Companies in these sectors are expanding and increasingly need more workers.
Wise employers will strengthen non-financial bonds to retain talent, but may still find themselves caught in a bidding war.
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THE WAR FOR TALENT IS HEATING UP: ARE YOU READY?
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