Report 015 Retention Life Working Series 2015 1
1. Introduction Understanding the length of time employees remain with a company and the drivers of retention. The latest report in our Life Working series looks at retention in the City focussing on the average length of service, why people stay with an employer and their reasons for leaving. The research for this report was undertaken by online survey between 15th August and 23rd September 2014. Requests to participate in the survey were sent to more than 27,238 current and former candidates and clients of Astbury Marsden. A total of 1,046 responses were received and analysed. The information and data contained in this report are for information purposes only and are not intended, nor implied to be a substitute for professional advice. In no event will Astbury Marsden be liable to you or any third party for any decision made or action taken in reliance of the results obtained through the use of the information and/or data contained or provided herein. Please consider that the answers given are based on the respondents interpretation of the question and the response options. If you have questions regarding the survey, or the report please contact: Adam Jackson +44 (0)20 7065 1185 adam.jackson@astburymarsden.com 2
2. Executive Summary Time to say goodbye? The key to keeping good staff. Often, you hear the phrase people don t leave companies they leave managers. Although there is some truth in this - our survey shows that retention is a far more complex issue. Compensation of course plays a role, but not as much as some may think. In fact, some think of compensation as a hygiene factor - over compensating your employees won t remedy a bad work environment. So, what did our research uncover? Key findings on employee s tenure, include: Over two thirds of respondents have been with their employer for 1 to 3 years. The highest proportion of employees with more than ten years service can be found in exchanges & trading platforms. However, 39% have less than 1 year s tenure. This could suggest growth within the sector as they seek to add resource to growing demands. On a functional basis, over half of revenue generating staff have over 5 years tenure with their employer compared to just 5% of HR staff. This is a stark contrast to last year s results where we saw the highest proportion of staff with tenure over 5 years within HR. On average, men have longer tenures than women with 22% having over 5 years with their employer, compared to 19% of women. With regards to retention, we found that: Interesting work (25%) is still the key factor which retains City staff. A feeling of security (2%) has the least effect on whether employees stay. Employees stay with their employer as long as they feel challenged and mentally stretched. Last year, 21% felt the lack of roles elsewhere was a reason to stay, however, this year, just 13% feel the same way. This could indicate an increase in confidence in the jobs market. A lack of opportunities for development remains the primary reason people leave their employer. However, last year we saw unfair pay levels as the second biggest reason for leaving (37%). This year this reason has dropped to third place behind a lack of recognition (33%). In summary, in order to retain staff, companies need to ensure that they provide challenging work and make clear there are opportunities for progression within the business. For further insights, please do read the report. I hope you find it to be of interest. 3
3. Employee Tenure Looking at the length of service of employees in the City. Fig 3.1 Overview There has been little change in the tenure of employees this year. The majority (35%) of employees have been with their employer for 1-3 years and a further one quarter have a tenure of less than a year. The greatest proportion of long serving employees are found within Exchanges & Trading Platforms, Corporate Broking & Stockbroking and Investment Management. The shortest service is within The Regulators, Commodity Trading and Fund Services. Nearly one quarter of Exchanges & Trading Platform staff have been with their employer for 10 years or more, suggesting that they are being continually challenged in their role. However, a further 39% have less than one year s tenure. This could be due to a flurry of hiring within the area last year. In line with last year, no Compliance staff have been with their current employer for more than 10 years whilst 38% have been in their role for less than a year. This could be as a result of the continued increase in opportunities within risk and compliance within the City. Last year s results showed over a quarter of HR employees with more than five years tenure. In contrast, this year, less than 5% have the same tenure and over half have been in their role for less than one year. The last 12 months has seen a flurry of HR talent making the most of the increased job opportunities in the market. 4
Fig 3.2 Gender This year, on average, men have a slightly longer length of service than women. 22% of male employees remain with their employer for more than five years compared to 19% of women. Last year, the opposite was true. We still see a large proportion of women postponing their careers due to family commitments; this could be one reason for their shorter tenure. Tenure Female Male <1 year 26.0% 24.3% 1-3 years 36.6% 34.9% 3-5 years 18.7% 18.7% 5-8 years 12.2% 11.5% 8-10 years 2.4% 2.8% 10+ years 4.1% 7.8% 5
4. Staff Retention We look at what factors make people decide to stay with their employer. Fig 4.1 Most important factors When looking at what employees want from their employer, we can see that pay alone is not enough. One quarter think interesting work is the most important factor whilst just over one fifth, believe that fair pay is the crucial element. At the other end of the scale, just 2% want security and 9% look for good working conditions. This suggests that City workers have confidence in the job market to find a new position and are less concerned by maintaining a secure role with their employer. This year we saw the biggest increase in the importance to employees of their employer recognising their success. Staff want to feel appreciated and recognised for doing a good job, this not only builds trust, but it can strengthen loyalty and retention and improve performance. 6
Fig 4.2 Reasons for staying with current employer When asked why they stay with their current employer, 28% stated the challenging work, however, one fifth stated that opportunities for career advancement was what retained them. Employees want to feel like they have the opportunity to fulfil their potential in their role whilst being stretched to achieve more. They want to see that their hard work can be rewarded with further career moves and advancements within their business. Last year, we saw the lack of opportunities elsewhere as the second most popular reason why people stayed. This year, this has dropped to fourth place, with just 13% who believe there are fewer opportunities. This shows an increased confidence in the job market and the move towards a candidate led market. Reasons 2015 2014 Difference Challenged by the work 27.5% 28.7% -1.3% Opportunities for career advancement 21.9% 19.8% 2.0% Competitive salary 13.2% 12.2% 1.0% Lack of opportunities elsewhere 12.9% 21.2% -8.2% Other 10.3% 8.0% 2.2% Good management style 8.7% 5.6% 3.1% Attractive employee benefits 2.9% 3.2% -0.3% Little travel 2.7% 1.3% 1.4% Fig 4.3 Why people stay as long as they do Opportunities for career advancement are the most important for those with the lowest tenure, but this decreases over time. Those with a tenure over 10 years, see it as one of the least important factors. This suggests that many join a business with future career progression in mind, but other factors make them stay. A desire to be challenged at work is important at all levels of tenure, but is the most important for those who have remained with their employer for 8-10 years. Last year, the results showed that benefits are more important to longer serving employees. This year, it appears to be more important to those who have remained with their employer for 5-8 years and 3-5 years. This may be due to benefits which have accrued over time which employees do not want to forfeit as part of a career move. Tenure Attractive employee benefits Challenged by the work Competitive salary Good management style Lack of opportunities elsewhere Little travel Opportunities for career advancement Other <1 Year 1.8% 24.8% 16.5% 8.3% 6.4% 1.8% 25.7% 14.7% 1-3 Years 0.6% 28.0% 14.0% 8.9% 14.6% 2.5% 24.2% 7.0% 3-5 Years 6.0% 27.7% 7.2% 7.2% 16.9% 3.6% 21.7% 9.6% 5-8 Years 7.5% 22.6% 11.3% 9.4% 15.1% 5.7% 18.9% 9.4% 8-10 Years 0.0% 58.3% 16.7% 8.3% 0.0% 0.0% 16.7% 0.0% 10 + Years 3.2% 32.3% 12.9% 9.7% 19.4% 0.0% 3.2% 19.4% TOTAL 2.9% 27.6% 13.0% 8.5% 13.0% 2.7% 21.8% 10.3% 7
Fig 4.4 Effectiveness of retention tools According to respondents, the most effective tool for retaining staff is to provide future opportunities within the organisation (54%). This is in line with section 4.3 where opportunities for career advancement is seen as a key reason to stay with an employer. When it comes to financial benefits, paying above the labour market, providing incentives and bonuses and providing cash bonuses are all seen to be effective. With an increasingly mobile, flexible workforce, employees are citing allowing flexible working as an attractive aid for retention. As companies take their own individual stance on flexible working, competition for talent increases for those who are looking for a bit more flexibility from their employer. We will investigate this further in our next report in the Life Working Series; Mobility & Flexible Working. Providing total compensation statements and mentors has the least effect on retention. Retention tools 1 2 3 4 Ineffective Slightly effective Effective Very effective AVERAGE Providing future opportunities within the organisation 1.6% 7.6% 37.0% 53.8% 3.4 Paying above the labour market 2.2% 13.7% 40.2% 43.8% 3.3 Providing incentives and bonus opportunities 2.7% 13.5% 47.9% 35.9% 3.2 Providing cash bonuses 3.2% 14.9% 39.6% 42.3% 3.2 Allowing flexible working 2.7% 13.7% 40.8% 42.8% 3.2 Providing an extensive benefits package 3.2% 17.2% 49.7% 30.0% 3.1 Training and development 3.1% 23.6% 47.2% 26.1% 3.0 Providing stock option and/or equity awards Providing total compensation statements 7.9% 35.7% 39.6% 16.9% 2.7 14.9% 34.6% 38.0% 12.4% 2.5 Providing mentors 11.7% 41.1% 36.6% 10.6% 2.5 8
Fig 4.5 Reasons for leaving In line with last year, over half of respondents (56%) believe that a lack of career development is the main reason people quit. A further 33% believe that a lack of recognition is to blame and 31% see unfair pay levels as the cause. Not only do employees want to see that there is somewhere for their career to go, but they want to feel valued and recognised for their achievements, this includes praise from their manager, and also a fair level of pay. Too much travel and a difficult or long commute were not seen as likely to affect an employee s decision to leave, this could be because these are important considerations when joining a firm, generally employees know what they are getting into when it comes to commuting and travel requirements. The biggest change when looking at last year, was a 6% decrease in the proportion of people who believe unfair pay levels is the main reason people leave. This year, 6% more respondents believe work-life balance issues are the key reason for moving jobs compared to last year. As businesses either embrace or reject the notion of flexible working, we will see an increase in the competition for candidates who are looking for a better work-life balance. 9
About Astbury Marsden Astbury Marsden is an international recruitment firm focussed on financial services, energy and professional services. We specialise in recruiting uniquely talented people in business technology, business transformation, governance and specialist skills. We intimately understand the dynamics of the financial services, energy and professional services markets; making sure we know the people our clients need to occupy critical roles throughout their business. We help clients determine the people they need and then we find the best of them. We have a global perspective and we are territory-neutral. We look for market identifiers that we recognise, and apply our experience and intelligence to solve the challenges they face. Our regional hubs established in London and Singapore allow us to serve our clients across EMEA and throughout Asia. You can find more out at www.astburymarsden.com London Adam Jackson 33 Cannon Street, London EC4M 5SB +44 (0)20 7065 1222 Singapore Mark O Reilly 65 Chulia Street, OCBC Centre, #43-01, Singapore 049513 +65 6709 5151 10