Research from The MIT Sloan Management Review has found that young managers are moving to other jobs in order to receive higher salaries and more developmental opportunities.
The review surveyed 892 high potential young professionals who graduated from the top universities in Europe.
The research found that, over a period that averaged five years, those who stayed with the same employer received average annual pay increases of 11%.
On the other hand, those who quit their jobs in search of higher pay received 13% average annual pay increases after working with two employers. In addition, Gen Y staff who resigned from their current roles after desiring higher salaries saw average annual pay increases of 15% after they had worked with three employers or more.
The study suggested to keep employees, it is important to show them that the company is offering them what they are worth.
To retain talent, leading companies like Netflix are readjusting their salary levels in accordance to labour market rates.
The study pointed out it was especially important to offer staff competitive pay because today’s young professionals can easily collect labour market information to find out whether they are underpaid and where they can go to close that gap.
The study pointed out that among individuals who were still in their first job, 92% reported that they were always on the lookout for opportunities with other employers.
However, not all of these respondents were looking to move on.
One respondent revealed that he went to and constantly had contacts with recruiters and headhunters because he did “not want to be taken advantage of.” He considered interviews a learning opportunity and the chance to obtain information about the labor market
Besides pay, lack of mentioning and coaching, formal training, support from the direct manager, and support from top management are also among the biggest reasons young managers want a change of scenery.
The study suggests that developmental practices are essential. Employees crave development, especially assignments that offer clear responsibility and accountability for a project, and visibility to and support from senior managers.
Organisations that are ready to give young professionals these forms of development will be the most likely to attract and keep them.
Monika Hamori professor at IE Business School in Madrid, who co-authored the MIT study said a previous academic study on corporate social responsibility and labour turnover had shown that getting staff involved in volunteer work also lower the turnover rate.
The study found staff turnover rates in Fortune 100 companies dropped 25 to 30% decrease after the introduction of corporate responsibility activities.
“HR managers may get more mileage out of volunteering and community projects if they could blend these projects with the features of high level assignments and if these projects could get increased young employees visibility with senior managers in the firm,” she told the Guardian , highlighting the two factors that really drive loyalty among Generation Y recruits.
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