- Employers are, on average, offering new talent 15% pay increases to come on board, according to Gartner's 1Q19 Global Talent Monitor. But employees only expect about a 10% increase when switching employers, and this practice can drive current employees away, the research and advisory company noted.
- "Not only are U.S. employers often paying too much to new workers, but once tenured employees discover discrepancies between their salaries and those of new colleagues, they may be more inclined to look for another position elsewhere," said Brian Kropp, group VP in the Gartner HR practice, in a statement.
- Gartner said it instead recommends employers strengthen their employee value proposition (EVP) by concentrating on key areas that employees and the market have deemed valuable. That includes compensation and benefits but also career and development opportunities, work-life balance and job-interest alignment.
Several recent studies show that money remains workers' top motivator, so it follows that so many employers are banking on compensation to win the war for talent.
But Gartner's findings suggest some may be leaning further into that trend than is advisable, hurting retention efforts. And as the organization noted, pay alone can't overcome a poor EVP. Other research suggests that great pay doesn't lead workers to forgive other shortfalls, like a negative culture or work that doesn't seem meaningful, for example.
A competitive compensation strategy may be a must-have in today's tight labor market, but HR also must view its entire EVP as a way to engage and retain current talent.