Retention and Hiring Woes Mount in 2014

Each year PayScale conducts a survey of compensation best practices to take a look at what transpired in the year just ended and predict trends for the upcoming year.  In addition to compensation trends, respondents reveal how employee retention and skills gaps are impacting the recruitment, selection, and management of top performing employees. 

Here are a few highlights from the compensation best practices report that was just released.


In 2009 only 28 percent of companies listed retention as their top concern, but by 2013 that number more than doubled, increasing to nearly 60 percent.  Only 10 percent thought it not a concern at all.

retention trends 2014

The top two reasons for people leaving an organization in 2013 are the same as 2012 and 2011: personal reasons and seeking higher pay elsewhere (21 percent).

For small companies, poor performance was the most important reason for someone leaving an organization (23 percent), and 56 percent of small companies said it was one of the top three reasons.  For medium and large companies, seeking higher pay and advancement opportunities elsewhere were the two most common reasons.

79 percent of respondents agree pay is often not the primary reason people first start looking for a new job.

Companies of all sizes in all industries should expect to see an increase in employee turnover.

Skills Gap

Half of respondents agree with the statement: “There is a lack of qualified applicants for our open job positions.”

Half of companies surveyed cited they are struggling to fill skilled job positions with nearly two-thirds of companies in the Information, Media and Telecommunications industry and Manufacturing companies reporting concerns.

Companies are growing.

Despite headlines to the contrary, many sectors of the economy are improving.  The combination of growth, retirements, and skill gaps means that recruitment and retention will become significant problems for companies that take a wait-and-see approach.

change in workforce size

Of the 52 percent of organizations that reported increasing the size of their workforce, 46 percent reportedly grew up to 10 percent.

Things are looking up for small business.

Small businesses are most optimistic about financial performance in 2014 with 75 percent expecting improvement compared with 72 percent of medium companies and 66 percent of large companies.

Salaries will go up.

For 2014, 88 percent of companies say they plan to give pay raises, with the average raise expected to be 4.5 percent.

Companies plan to recruit and retain high-performing employees with merit-based pay plans and additional learning and development opportunities.

Source:  To download the full report, click here.


Ira S Wolfe


  1. Jackk August 4, 2014 at 2:35 pm -

    Thanks for this article. Talking about retention and hiring strategy has always been a long long process. you can even check out some books on human resource, career and performance management and a lot more on similar themes. Visit: