Nearly 70% of professionals earning over $100,000 are open to quitting within the next few months. If you’ve got great leaders at your organization, this can be devastating news. CNBC talked to several experts about the trend and they concur: Raises continue to be relatively stagnant, so getting a new job is the only way most executives can secure an impressive bump in compensation.
Related studies show that workers who leave their employers to take new jobs receive pay raises that are more than three times the amount for workers who stay put. The Associated Press reports that gap is at its widest point since the Great Recession. Average annual raises for workers who have stayed in their jobs is below 3 percent, while job switchers usually expect a salary increase of 10-15% or more.
Among Austin, San Antonio and Dallas-Fort Worth executives, around 40% would even relocate to a different city for a new job that pays just $10,000 more than they’re making right now.
Retention compensation plans for executives, which tie payment incentives to continued employment over a period of time, could be a solution. However, such a tool is mostly helpful when an organization is about to undergo a huge transition such as a sale or acquisition, a reorganization, or a planned leadership change. Relying solely on a compensation plan to retain top executives outside these scenarios rarely works without a focus on engagement, culture fit, and other reasons workers remain loyal. In fact, one recent study shows that while about 20% of professionals cite higher salary as the reason they left their company, 33% admit they were simply bored and needed a new challenge and 24% felt their previous employer’s work culture didn’t fit with their values.
“While a much higher salary can be the determining factor when choosing a new job, it’s rarely the one-and-only reason executives search for a new job in the first place,” says Craig Patterson as Managing Director of The HT Group’s Professional Services Division. “As long as your salaries are competitive, engaging your leadership in areas like professional development, meaningful work, and aligned values can prevent them from wondering what they’re worth to someone else.”
Plus, having a relationship with an excellent executive recruiting firm like The HT Group can help soften the blow to your company when a top executive does leave. That way, you’re able to immediately attract and interview top replacement talent to mitigate the loss.