Gartner finds that US companies are paying less to entice workers to switch jobs, with active job seeking remains low

U.S. employers are offering less of a compensation increase to attract talent and lure workers from their current jobs, according to Gartner. While historically companies have extended, on average, a 15 percent pay increase to get people to switch jobs, the latest data from Gartner’s third quarter of this year Global Talent Monitor report shows this compensation premium has declined over the past six months to approximately 13 percent.

Gartner’s most recent Global Talent Monitor report also shows that only one-third of currently employed U.S. workers indicated they were actively looking for a new job in the third quarter of this year, below the global average of 40 percent. This U.S. number represents a significant drop from a high of 41 percent in the first quarter of this year, while the international average has remained steady over the same time period.

Additionally, for the second consecutive quarter, 51 percent of U.S. workers reflected their intent to stay with their current employer. This figure is well above the international average of nearly 40 percent.

“The dramatic decline in active job seeking that we witnessed in the second quarter did not rebound much in the third quarter, even as employee business confidence and perceptions of the job market remained stable,” said Brian Kropp, chief of research for Gartner HR practice. “This coupled with companies paying less to entice workers to switch jobs demonstrates additional signs of a tighter U.S. labor market from both the employer and employee perspectives.”

In the third quarter, the number of U.S. workers reporting high discretionary effort on the job — or going above and beyond their regular duties — remained at 21 percent as in the previous quarter, higher than the global average of 17 percent and staying above the 20 percent mark in back-to-back quarters for the first time since the fourth quarter of 2017 and the first quarter of 2018. 

Gartner data reveals that compensation has ranked as the No. 1 reason why U.S. employees leave an employer since the first quarter of 2018, a trend that continued in the third quarter this year. Future career opportunities and people management came in as the second and third reasons, respectively, employees cited for leaving a job.

Although wage increases have remained somewhat stagnant over the past few years, companies have an opportunity to retain talent by providing their workforce with new experiences and development programs to help them learn new skills and strengthen their employability. Managers play a vital role as well; by creating environments in which employees feel better connected to the organization, they help strengthen the bond between the company and workers — and create higher performers.

“Faced with less than ideal compensation increases, U.S. workers are looking for other benefits and value they can extract from their jobs,” said Kropp. “Gartner data shows that even if wage increases remain low, workers will stay on with companies that develop programs which enhance their skills and invest in their professional growth within the company.”