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Employers may be paying too much to attract talent

June 11, 2019

US employers may be paying too much to attract new talent, according to a study by Gartner Inc. It said US companies are offering average salary increases of about 15% to new employees, while US employees expect approximately a 10% salary increase to switch employers.

The data comes from Gartner’s 1Q19 Global Talent Monitor report.

“Not only are US employers often paying too much to new workers, but once tenured employees discover discrepancies between their salaries and those of new colleagues, they may be more inclined to look for another position elsewhere,” said Brian Kropp, group VP in the Gartner HR practice.

Gartner’s report also found 25% of US employees were actively looking for another job compared to the global average of 27%.

To help attract employees, Gartner said companies should develop a strong “employee value proposition,” or EVP, that includes benefits and compensation, career and development opportunities, job-interest alignment, and work-life balance.

“When companies invest and deliver a strong EVP, engagement levels in their workforce will likely see a boost — not only in the ability to retain talent, but also in attracting sought-after talent,” Kropp said. “In this hypercompetitive US labor market, organizations with attractive EVPs can reduce the compensation premium needed to attract qualified candidates as well as potentially decrease annual employee turnover by just under 70%, all of which helps the company’s bottom line and brand reputation.”

Gartner’s report is based on a survey of more than 40,000 employees in 40 countries.

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