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Attrition reduction is leading goal in HR trends report
The way to keep millennials around is through better pay, according to a new LinkedIn study. And compensation remains a top attrition-reducing tool all around, but it's not necessarily the most important one.
Millennials will leave a job to improve their pay, but older workers are more likely to leave looking for new challenges, according to a new HR trends survey from LinkedIn Corp. Regardless of their motivations for quitting, both pay as well as new challenges are part of employee experience, which led LinkedIn's just released annual "Global Talent Trends" report for 2020.
Improving employee experience was cited by 94% of the 7,000 HR professionals that LinkedIn surveyed globally. The findings were summarized in the talent trends reports. The most popular reason for investing in employee experience was increasing employee retention, according to survey results.
Employee experience includes a bucket of HR strategies. The most effective tool was compensation and benefits. Companies rated highly on compensation saw 56% lower attrition, according to the survey.
For Cox Automotive Inc., getting compensation right is a major focus in managing the sales team. But it is not as important of an incentive for retention as the LinkedIn survey suggests.
Leadership is most important
The Atlanta-based firm's portfolio of brands, which includes Autotrader and Kelley Blue Book, among others, supports how vehicles are bought and sold. Cox Automotive is part of the $21 billion conglomerate Cox Enterprises Inc.
Cox Automotive wants compensation to be in sync with the revenue generated by employees. Keeping sales performing at its highest levels is driven by analytics, which it gleans from the Xactly Corp. compensation tool, according to Justin Ritchie, assistant vice president of sales enablement and execution at Cox Automotive.
The tool helps to identify the top sales performers and compensate them correctly, but it also helps identify employees who aren't meeting goals, which gives the company a chance to provide those employees with more training.
The goal is "to ensure that our highest performers… are getting rewarded the way that we expect them to be rewarded," Ritchie said. Indeed, Ritchie said compensation is not at the heart of what drives its sales team to meet revenue and sales targets.
Justin RitchieAssistant vice president of sales enablement and execution, Cox Automotive Inc.
"A lot of people think compensation plans drive performance, but in my opinion, compensation plans are the supplemental piece that help with performance," Ritchie said. "The leaders are what drives the performance: We have a big focus on how our leaders are doing."
If the company sets budgets fairly and has the right compensation plan, "and our leaders [managers] are executing the way that we expect them to execute, then all-in-all, we should be hitting our revenue and sales targets," Ritchie said.
Data offers clear view
Cox has a clear view of how its sales team is performing, Ritchie said. It combines data from multiple business units to create a data lake on AWS. The Xactly tool pulls data from the data lake. The previous tool for keeping track of compensation data was spreadsheets.
But compensation, particularly in high-demand jobs, is clearly an important perk, according to ADP LLC data.
For instance, in the government's labor category "information," which includes software development, people who stayed at their jobs saw year-over-year wage growth of 5.2% in 2019. But those who moved to other jobs saw an increase of 11%.
Those kinds of gains were not true for other industries. For all other categories, people who stayed saw a year-over-year increase of about 4.6% while those who moved saw a 5% increase, according to ADP data.
Compensation is only one element of what makes up employee experience, said Amy Schultz, director of talent acquisition at LinkedIn. Different teams impact employee experience when it comes to training, development and compensation benefits.
Another major HR trend identified in the LinkedIn report is internal recruiting.
"There is longer employer tenure at firms that do a lot of internal recruiting," Schultz said. Indeed, firms with high internal recruiting have employees who will stay 41% longer than those with low internal hiring, according to the survey.
The interest in internal recruiting is driven by demand for workers, Schultz said. Historically, employers felt they needed to hire externally to gain new skills, but there is growing belief that existing employees can be taught to do new things, she said.