Employee Job Satisfaction & Retention Survey

2007 / 2008

An Employer versus Employee

Overview

CONNECTING PEOPLE, PAY AND PERFORMANCE

CONNECTING PEOPLE, PAY AND PERFORMANCE 1
Survey Highlights

At the end of 2007, Salary.com conducted its third annual survey of employee job
satisfaction and the factors that contribute to satisfaction and retention. The survey asked
questions of both employees and employers and yielded surprising and often conflicting
results.
► Employers continue to underestimate employees interest in actively searching for
new employment within the near future.
► Compensation is the most important factor for employees when choosing to leave a
job; it is less of a factor for why they stay in a job.
► When broken down by gender, attractive compensation is the top reason for
staying in a job for men, while women focus more on working relationships and
desirable working hours. A gender breakdown does not alter the results for why
employees leave a job.
► Although employers recognize the rising costs of replacing employees due to
turnover, they will only offer, on average, a 7% increase to entice a valued
employee to stay.

CONNECTING PEOPLE, PAY AND PERFORMANCE 2

Employer Perception of Employee Satisfaction

How Perceptive Do Employers Feel HR Team Is When Assessing

Employee Satisfaction?

Highly
Unperceptive
Somewhat
5%
Unperceptive
11% Highly Perceptive
24%

Somewhat
Perceptive
60%

Sixty percent of employers feel they are “somewhat perceptive” and

24% feel they are “highly perceptive” when assessing employee
satisfaction, survey results reveal that confidence is unwarranted.

CONNECTING PEOPLE, PAY AND PERFORMANCE 3

 Reality of Competitive Offers

►Fifty percent of
employers believe a salary
Minimum % Salary Increase Competitor Would increase of 8-15% is
Have to Offer to Lure Employees Away enough to lure current
employees away.
Percent of Responses

60%
50%
50% ►Thirty-eight percent of
40%
38% employees would need a
33%
30%
31% competitive offer of 16-
17% 30% to consider moving to
20%
7%
13%
6%
a different organization.
10% 3% 1% Seventeen percent would
0%
1% -7% 8% -15% 16% -30% 31% -50% No amount
expect 31% or more.
will work
►Fifty-one percent of
Percent Increase In Salary
employers “sometimes”
Employee Employer make counter-offers; 14%
“almost always” counter-
offer; 35% never counter-
offer.

CONNECTING PEOPLE, PAY AND PERFORMANCE 4

Cost to Replace an Employee Due to Turnover

Top 5 Industries where average cost of replacing an

employee due to turnover is highest

Biotechnology $46,250

Aerospace & $30,875

Defense
Industry

Energy & Utilities $28,512

Retail & $27,545

Wholesale

MFG Durable $26,944

All Industries $21,430

$10,000 $20,000 $30,000 $40,000 $50,000 $60,000

06/07 avg. - Average Cost

$15,000

►In 2006/2007 employers estimated replacement costs due to turnover to

average approximately $15,000.
►This year employers estimate costs will average $21,000 which represents
a 40% increase.

CONNECTING PEOPLE, PAY AND PERFORMANCE 5

Top 5 Employee Job Search Activities
Employee Job Search Activities: Employee Responses vs.
Employer Perception

27%
Updated my Resume
42%

Surfed online job 32%

Job Search Activity

postings 46%

Read classified 30%

employment listings 32%

Posted or emailed my 22%

resume to prospects 27%

Networked with friends 27%

and colleagues 32%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Percent Respondents

Employee Employer

Employees report to be engaged in the same top five search

activities as last year. As in past years, employers underestimate
the extent of employee involvement in these activities.

CONNECTING PEOPLE, PAY AND PERFORMANCE 6

Top 5 Reasons Employees Leave a Job
Reasons for Leaving a Job: Employee Responses vs. Employer
Perception
36%
Inadequate compensation 27%
Reason for Leaving

Lack of career 30%

advancement 19%

22%
Insufficient recognition 17%

7%
Boredom 11%

Inadequate professional 12%

development opportunity 11%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Percent of Respondents
Employee Employer

►For the third year in a row, inadequate compensation remains the top
reason employees leave a job.
►Employees and employers disagree most significantly in regard to the
manager/employee relationship. Only 6% of employees selected this as a
reason for leaving a job while 30% of employers felt this was a major
factor.
CONNECTING PEOPLE, PAY AND PERFORMANCE 7
Top 5 Reasons Employees Stay in a Job
Employee Reasons for Staying in a Job vs. Employer Perception

Relationships w ith co-w orkers 31%

25%
Reason for Staying

Relationship w ith manager(s) 22%

25%

Desirable w orking hours 17%

22%

Attractive compensation 23%

20%

Attractive benefits 18%

20%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Percent of Respondents

Employee Employer

►The top reasons for remaining in a job were similar to last year, the only
difference being attractive compensation replaced job security in the top 5.
►Interestingly, more than half of employee respondents did not list any
reasons for staying in their job on this years’ questionnaire.

CONNECTING PEOPLE, PAY AND PERFORMANCE 8

Top 5 Reasons Employees Leave a Job
Women vs. Men
Employee Reasons for Leaving a Job - Women vs. Men

27%
Inadequate compensation
26%
Reason for Leaving

21%
Lack of career advancement
19%

17%
Insufficient recognition
16%

11%
Boredom 11%

Inadequate professional 11%

development opportunity 10%

0% 5% 10% 15% 20% 25% 30%

Percent of Respondents

Women Men

As reported last year, men and women leave jobs for the same
reasons. The ranking of the top five reasons is identical to last
years’ results with inadequate compensation being the most
popular response.
CONNECTING PEOPLE, PAY AND PERFORMANCE 9
Top 5 Reasons Employees Stay in a Job
Women vs. Men
Employee Reasons for Staying in a Job - Women vs. Men

Eelationships w ith co-w orkers 22%

28%
Reason for Staying

Relationship w ith manager(s) 22%

27%

Desirable w orking hours 18%

26%

Attractive compensation 27%

16%

Attractive benefits 18%

22%

0% 5% 10% 15% 20% 25% 30% 35%

Percent of Respondents

Women Men

►Men and women again reported the same top reasons for staying in their
jobs.
►Women place a higher importance on desirable working hours and work
relationships while men focus more on compensation.

CONNECTING PEOPLE, PAY AND PERFORMANCE 10

What Benefits Would Entice Employees to Stay
in a Job?

The most popular responses to benefits (outside of

compensation) that would entice employees to stay in their
jobs - in order of preference – are:
►Professional development
►Ability to work from home
►Additional week of vacation
►Flexible work schedule

Of those employees who selected “other”, the most popular

responses were “better 401(k) program” and “enhanced health
insurance benefits.”

CONNECTING PEOPLE, PAY AND PERFORMANCE 11

 Methodology

Salary.com invited a cross-section of individual employees and business representatives from across
America to participate in its 2007/2008 Employee Satisfaction and Retention Survey. Prospective
participants received an email containing the survey questionnaire. Participants completed as many sections
of the survey as they desired, and then submitted their results to Salary.com electronically.

Salary.com compensation professionals reviewed the data for consistency and accuracy and excluded data
that appeared to be invalid. A total of 7,482 individuals and 245 human resource or other company
representatives responded to our survey. Among the individual employee respondents, 7,101 were
employed and provided valid responses to the survey questions—the remaining 381 were excluded from all
analysis.

Recipients of this report will find it impossible to discern the data contribution of any individual or company.
Submissions were aggregated with data submitted by similar groups before results were calculated. Each
numerical result reported in this document is based on data submitted by at least five (and often many
more) separate respondents. This conservative approach is designed to protect participant confidentiality,
and is consistent with the “Safe Harbor” guidelines adopted by the U.S. Department of Justice and the U.S.
Federal Trade Commission.

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