Salary is important to employees, but it cannot retain them when leaving the company

The labor market is currently ‘bursting’ with talent, so it is no wonder that talents frequently move from one company to another. With the arrival of Generation Z in the labor market, new trends are emerging, such as ‘quiet quitting’ and ‘rage applying’. Quiet quitting, or the so-called ‘silent resignation’, is a widely publicized trend that refers only to the execution of one’s own obligations without the desire for additional work or proving oneself at the workplace, so that employees, especially younger ones, prevent employers from exploiting them or forcing them to work overtime.

‘Rage applying’ is a somewhat lesser-known phenomenon, referring to the mass sending of resumes to other companies in search of one’s own ‘place in the sun’, or a better and higher-quality work environment. So what do employees actually seek when transitioning to a new job?

– Currently in the so-called ‘candidate’s market’, in a ‘tight’ labor market where there is a high supply of jobs but insufficient labor that meets the needs of the advertised position, there is a war for talent – explains Lara Šubić Šuša, project manager of the Employer Partner Certificate project at Selectio, adding that with the change in life priorities brought by new generations, the issue of human resource management comes to the forefront for companies, if it has not already been in the forefront in recent years.

– Among job seekers, especially after the pandemic, and this applies to employees of all generations, we notice fatigue and desire for change in jobs that are meaningful to them. Listening to all these demands in the labor market, companies are rapidly investing in the quality of human resource management processes, and those that already have an excellent and secure base of human resource management processes stand out, wanting to highlight a specific organizational culture and clear communication of the EVP (employee value proposition) that clearly communicates the advantages of working in the company for a specific ‘target group of employees’ – says Šubić Šuša.

Even small differences can tip the scales

As she notes, according to last year’s research on a sample of Employer Partners, it is observed that in 2022, employers focused most on adjusting the salary system and reducing the inflationary impact on employee salaries.

– Employer Partners increased salaries by an average of 7 percent in 2022, either significantly at once or through several adjustments throughout the year. We notice that as a result, employee satisfaction has increased, and their sense of security and the employer’s concern for employees has grown – explains the project manager, adding that it is necessary to consider the challenges and pressures that employers themselves feel, such as rising energy prices, unfavorable projections in times of uncertainty, and so on.

– From the employer’s perspective, repeated salary increases cannot be the only tool in the fight to retain and attract labor. We notice that companies are increasingly and more systematically turning to other forms of employee motivation: growth and development of employees, workplace flexibility, stress management programs, and generally aligning work-life balance, designing new forms of material and non-material benefits tailored to the specific organizational culture of the company – she explains.

When transitioning to a new job, Selectio states that candidates in most cases seek an increase in salary and benefits packages, where even small differences can tip the scales towards the decision to change jobs. However, for the final decision, candidates also consider the work atmosphere, opportunities for education and development, working for an employer they consider secure and reputable, and benefits they did not have with their previous employer.

There are various studies in Western countries regarding what candidates most seek from their potential employers this year, and some other common benefits certainly include hybrid work arrangements, flexible work schedules, mental health care, broader definitions of family leave, and opportunities for advancement and development.

Remote work particularly stood out during the pandemic when a large number of employees realized they could work effectively from home, so hybrid work is increasingly sought after, as is flexibility at work. Mental health care and, for example, taking days off to work on one’s mental health, as well as a broader definition of family leave, which adds support or leave for employees who have sick family members, have also been mentioned as benefits by Selectio.

Generation Z demands too much

– The most commonly used material benefits include gifts for children, anniversary awards, holiday bonuses, and allowances for meals and transportation, while non-material benefits include additional vacation days, health check-ups, and psychological counseling – says Šubić Šuša.

The least utilized benefits offered by some employers, she notes, still include company shares, 13th salaries, subsidized parental leave, and the third pension pillar among material benefits, while among non-material benefits, corporate daycare, supplemental health insurance, and company cars are the least used.

Benefits certainly vary from sector to sector, and as confirmed by Denis Prenkaj, director of the employment agency Dposlovi, a common reason for workers transitioning from one company to another, aside from money, is the inability to advance and grow, and loyalty, or lack thereof, towards the company and the team they work with plays a significant role.

– Salary has always played a significant role in work, but it needs to be adjusted based on performance; otherwise, workers often lack motivation – says Prenkaj, who also commented on Generation Z, with whom he claims experiences are often quite poor.

– Generation Z sometimes demands everything from a future employer that they themselves often cannot bring to the company. Of course, there are exceptions. This generation believes they deserve the highest salary without needing to demonstrate their value and contribution to the company, and they often seek more vacation days than others – explains Prenkaj.

Whatever the stance on the new trends and benefits that new generations bring to the market, it is clear that salary remains an important factor, although perhaps not the main one, when transitioning from one job to another, but the benefits that companies offer their employees can certainly be decisive in the selection.