Catering to Employees: Is the Party Coming to an End?

To retain employees, the investment platform Mynd offers employees $60,000 for purchasing real estate after five years of service, while the public relations firm MikeWorldWide (MWW) has decided to pay new employees a week before they start working. Early salary payments, and even pet insurance, are just some of the benefits that American employers have recently been offering in job advertisements, and due to the competition for qualified workers, they are certainly taking the opportunity to expand their list of demands. Resignations are also occurring due to the lack of paid time off after the death of a pet. The trend known as The Great Resignation or The Big Quit, which has spread across America, has resulted in increasing benefits offered to employees.

What is the situation in Croatia? Is this trend spilling over to us, how willing are employers to accommodate employees and what benefits are they offering? And will the trend reverse in favor of employers with the recession that is being mentioned more frequently?

—

Zvonimir Galić

photo

—

– The trend of The Big Quit has also spilled over to us, but to a lesser extent. My team, together with our partners from Hendal, conducted a survey in May 2022 on a representative sample of Croatian workers. Our data shows that 20 percent of workers are currently looking for a new job, and 27 percent intend to look for one in the next year. This is very different from a survey conducted by MojPosao, which indicated much larger numbers, stating that 50 percent of people are changing jobs, and is quite comparable to the data presented by PwC this year in Davos based on a survey conducted on 52,000 people in 44 countries. Therefore, the percentages are not huge and are much lower than in the U.S., but they are still significantly higher than before the pandemic. Compared to some of our previous surveys, about twice as many people intend to look for new jobs in the next twelve months – explained Zvonimir Galić, a professor at the Department of Work Psychology at the Faculty of Humanities and Social Sciences in Zagreb.

Covid is a Catalyst for Trends

However, several companies we spoke to say that employee turnover has now only returned to pre-pandemic levels. At the same time, everyone emphasizes that there is currently a significant labor shortage and that it is harder than ever to find qualified employees. Of course, resignations and employee turnover are not the same across all sectors. According to data from the aforementioned survey, The Big Quit is highest in the IT sector, in trade, tourism, and transportation, and lowest in public administration and public services. However, Zvonimir Galić notes that resignations in these sectors are not caused by the same factors.

– Turnover in the IT sector is driven by the strong development of that sector in recent years and the war for talent. The increased intention to leave in trade, tourism, and transportation can likely be linked to the generally low quality of those jobs and the shortage of people in the labor market – explained Galić.

The sharp increase in turnover rates in the IT sector, noted Aleksandar Raić, Vice President for Transformation and Human Resources at Infobip, is driven by the growing demand for automation and digitalization.

—

Aleksandar Raić

photo

—

– As a result, there is an increased demand for IT services as all companies in the industry are seeking talent to work on projects. Additionally, in some markets, such as Croatia, the total number of IT professionals is decreasing because there are fewer new graduates entering the labor market than those leaving for developed countries. On the other hand, to some extent, when it comes to the departure of workers who do not fulfill their work duties properly or do not fit into the culture of a growing global company like Infobip, we can say that it positively affects the organization – believes Raić.

Although one of the reasons for the more frequent job changes is the favorable situation in the labor market, it has certainly been contributed to, says HR consultant at Selectio Helena Pađen, by the corona crisis, which has served as a catalyst for many trends that were already relevant, such as digitalization, remote work, or focusing on employee well-being and work-life balance.

– Employee awareness of the importance of work-life balance has increased. Many of them have reassessed their priorities during this crisis, and some have concluded that what is important to them is not being provided at their current workplace – explained Helena Pađen.

Salary is Important, but Not the Most Important

Despite the common perception that salary is one of the more important factors for resigning, according to a survey by MojPosao, as many as two-thirds of employees who resigned last year did not have another offer, which shows that a higher salary was not the main motivator for leaving their job.

– Besides an appropriate financial package and other benefits, the reasons employees will consider changing jobs include poor interpersonal relationships, lack of development and/or advancement opportunities, frequent overtime, stress and burnout, and poor leadership skills of their direct supervisor – stated Pađen.

According to the MojPosao survey, salary is only the third reason for changing jobs, while the first is poor interpersonal relationships, or the feeling that they are undervalued by their employer.

What other benefits do employers offer their employees and how do they try to retain them? Read in the digital or printed edition of the business weekly Lider.