Jealousy over new starters’ bumper pay leads to resignations

Booster salary and benefits packages for new starters aimed at helping recruitment are instead fuelling resignations.

The most common reason (28%) for UK employees to start looking for another job was discovering that new hires of the same level were paid more than them, according to a survey by recruitment company LHH. 

This means that businesses are now forced into a dilemma, as efforts to recruit talent indirectly harm efforts to retain it.

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Around a quarter (26%) also said they would start the job search if they saw their employer advertising better benefits that they did not receive themselves.

This could create issues for employers as close to half (45%) of employees have discovered that a new hire is being paid more than them, and 44% said their employer was advertising better benefits for new hires.

Jeanne Townend, CEO of LHH UKI, said that while just 3% of HRDs have received complaints about better pay and benefits for new starters in exit interviews, the problem may be significantly larger than they realise.

She told HR magazine: “Our confidential surveys are showing employees may not be entirely open in their exit interview about their real reasons for leaving, but companies ignore these complaints at their peril.”

According to the survey, employees were significantly more likely to be looking to move job because of pay and benefits disparities than because they felt burnt out. 

Even an employer refusing to be flexible about hours so that an employee could go to a medical appointment, for example, was less likely to cause people to start their job hunt.

Townend added: “In this market, companies need to work just as hard to retain their current valued employees as they do to recruit new ones. 

“Otherwise you create a leaky bucket with valued employees flowing out a hole in the bottom faster than you can add new ones on the top.”

Adam Nicoll, director at recruiter Randstad UK, told HR magazine that grievances like this are why many employers are reluctant to advertise starting salaries.

He said: “Not only does it make employers vulnerable to competitors pinching their talent by offering just enough to pry them out of their current role, it highlights that employees doing the same job are not necessarily getting the same pay packet.”

Roles with advertised salaries, however, are significantly more attractive to candidates.

"Once upon a time, employers could break the cycle by listing the salary as competitive and going from there.  

"But online job adverts get many times more applications when the salary is advertised compared with those where 'competitive' is used and in a candidate-driven market like this, that's critical. 

“And the direction of travel is increasingly towards salary transparency.”