Pay Raises are Back, Resignations Rising

The number of jobs created the last few months isn’t the only thing trending upward.

Employee resignations are also moving higher.  According to a recent survey by MRInetwork, vacancies created by resignation increased 7 percent between July 2011 and January 2012.  Newly created positions remain the top cause for job openings at 53 percent, although that was a drop of 6 percent from the prior period.

Notable comments about the causes of job openings and the increase in hiring ranged from:

• A belief that the economy is beginning to turn.
• Business is picking up and the current workforce can’t keep up with demand.
• Companies cut the workforce too lean and some of the experienced workers retired.

Should employers be worried?  While the resignation trends aren’t numbing, the loss of even one key employee can bring productivity down and put the brakes on strategy implementation.  Top performers are looking for new opportunities at a higher rate too.  Payscale.com found that in 2011, the top reason for leaving a job was “seeking higher pay elsewhere.”  That is a significant change because in 2009 the reason was “poor performance” and in 2010 “personal reasons.”

Speaking of pay, Payscale reported that over 93 percent of employers plan to give compensation adjustments to their workforce in 2012; 41 percent plan to give the adjustments to more than ½ the workforce.

Another trend with mixed outcomes for employers is that it is taking fewer interviews to get a job offer.  The number of offers extended after only 1 and 2 interviews increased over the last few months while 3 and more interviews decreased.  For the hiring employer, that’s good news.  For the employer who loses an employee, the losses will come faster. Likewise, the time that it takes to get an offer has dropped too.  The trend was up for both 1-2 weeks and 3-4 weeks. Employers are not only ready to hire but they are making decisions sooner than later. For employers dragging their feet when recruiting, good talent will be even harder to find.

Finally the use of counter offers has increased over 2012.  Although their use occurs only about 50 percent of the time, the trend is increasing.  Several comments from survey participants shared how it was more difficult to work with candidates than just 6 months ago; that the market has turned to a candidate-driven one; and that top talent is interviewing at multiple companies.