Are you having trouble retaining employees? You may want to check the stress level at your organization. When asked about reasons for leaving a job, stress was cited as the top reason by 37 percent of the employee respondents in a recent 2007/2008 Global Strategic Rewards study conducted by Watson Wyatt Worldwide and WorldatWork. Yet employers seem relatively oblivious to the role that stress plays in their employees’ decisions to stay or leave a job: stress does not even make the list of the top five reasons cited by employers.
The purpose of the study was to examine how employers are tackling attraction and retention issues and reward management. The study encompassed nearly 1,000 companies in 22 countries, in conjunction with a survey of more than 13,000 workers at mid-size to large employers.
Two of three companies worldwide report difficulty attracting top-performing workers, while a full 70 percent reported that they have difficulty attracting critical-skill employees. At 11 percent, the U.S. has the highest median voluntary turnover rate.
Employee view – top 5 reasons
Stress levels – 37 percent
Base pay – 33 percent
Promotion opportunity – 26 percent
Career development opportunities – 23 percent
Work/life balance – 22 percent
Employer view – top 5 reasons
Base pay – 52 percent
Career development opportunities – 47 percent
Promotion opportunity – 5 percent
Relationship with supervisor/manager – 35 percent
Work/life balance – 24 percent
But the stress climate of an organization was not just a strong reason cited for turnover, an acceptable stress level was also cited as a reason for staying with an organization and recommending it to others:

The study found that when employees are satisfied with stress levels and work/life balance, 86 percent are more inclined to stay with their company (versus 64 percent when dissatisfied) and 88 percent are more likely to recommend it as a place to work (versus 55 percent when dissatisfied).

“Worldwide, the frenetic pace of modern business is taking its toll on employees,” said Adam Sorensen, global total rewards practice leader at WorldatWork. “There’s no question that employees are more likely to leave or speak badly of their workplace if they feel overburdened. Companies that take steps to ensure that stress levels are not onerous will save money in the long run by reducing attrition.”

The survey notes that with such a misunderstanding of the actual reasons for dissatisfaction, some of the actions that employers are taking to attract and retain employees may be counterproductive.
Other study findings
The full report – Playing to Win in a Global Economy (PDF) – offers other findings as well. Results are segmented into global and U.S – specific findings. In addition to a disconnect between employers and employees in the reasons for leaving, some other key U.S. findings include:

  • Employers report difficulty in attracting and retaining employees—particularly, top-performing and critical-skill employees—for the fourth year in a row.
  • As employers continue to manage their cost structures, they are putting more money into variable pay and raising the bar for performance.
  • Merit-increase budgets for 2007 remained relatively stable, at an average 3.6 percent, and are expected to rise only slightly, to 3.7 percent, in 2008.
  • Highly engaged employees are more than twice as likely to be top performers than are other employees.

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