Drake International has warned employers that with unemployment predicted to fall this year, there is a growing risk of higher staff turnover, and, according to Drake International's strategic manager, David Edwards, simply increasing salaries will not alleviate this risk.
"With almost half of all employers reporting they are struggling to fill skilled vacancies, staff retention is a key issue and simply providing salary increases is not the answer to retain staff," Edwards says.
The survey, released this month, revealed that 80 per cent of employees feel that challenging and satisfying work is a very important factor when considering staying with their employer. Those surveyed also said a better work life balance and improved leadership and management would influence them to stay with their employer. In comparison, an increased salary was rated as an important motivator by a much lower number of respondents, with only 57 per cent rating it as a major influence.
Increased career development opportunities and increased learning and development opportunities were also listed as influencing factors - above an increase in salary.
"Salary increases are generally not the solution to staff turnover," says Edwards. "While staff will leave if they are not paid a fair wage, increasing salary alone is not the answer to improving staff retention and can result in a competitive wage spiral which is not sustainable."
Emphasising the importance of improving employee engagement to assist with staff retention, Edwards warns: "Not only are disengaged employees twice as likely to leave their employer as engaged employees, but they are also more prone to absenteeism and significantly more likely to have dissatisfied clients."