U.S. Companies Offer Less of a Pay Bump to Attract Job Switchers

Wavering confidence in the U.S. labor market continued in 3Q19, furthering a trend first seen in 2Q19 GTM data and showing the majority of U.S. employees plan to stay put in their current jobs. In 3Q19, there was also a slight decline in the compensation premiums that companies offered to entice people to switch jobs. The premiums were not only lower than in past quarters, they were also lower than employees’ expectations.

“ Businesses are now spending less to attract people from one job to the next”

“Our 3Q19 data shows that last quarter’s compensation increases of 15% to switch jobs decreased to 13% in 3Q19," says Brian Kropp, Distinguished Vice President, Gartner. "With this drop, we find that businesses are now spending less to attract people from one job to the next, which indicates a slight shift in favor of employers in the current labor market."

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GTM data also showed there were 6.7% more active U.S. job seekers in 3Q19 than in 2Q19, but that number is still down 15.1% from 3Q18. The percentage of U.S. workers reporting high discretionary effort — going above and beyond their regular functions on the job — remained at 21%, while 51% expressed their intent to stay with their current employer, which is well above the global average of 39.5%.

Notable trends in the global workforce in 3Q19

• In the U.K. during 3Q19, employee confidence in business conditions and economic prospects remained at its lowest level in two years.
• The global business confidence index, at 51.7, was little changed from 51.6 in 2Q19.
• Only 20.5% of the global workforce actively sought a new job, little changed from 20.2% in 2Q19.
• The engaged workforce — those employees reporting both high discretionary effort and high intent to stay —  remained at 10% for the second consecutive quarter. Globally,16.6% of employees display high discretionary effort, and 60% of those also report high intent to stay.
• Employees in Latin America, Europe and Australia and New Zealand perceived fewer job opportunities in the third quarter of 2019 than in the second quarter of 2019. Employees’ perceptions of job opportunities edged up in North America and remained unchanged in Asia.
• Employees’ perceptions of job opportunities edged up in North America and remained unchanged in Asia. 
• Globally, compensation, work-life balance and stability in the workplace remain the top priorities for employees when considering a new job. These top three drivers of attraction have remained the same for five quarters.
• Employees in the U.S. reported compensation, future career opportunities and people management as their top three drivers of attrition.