How to identify flight risk employee and take action on underpaid employees

Flight risk employee is a major concern for employers, especially in competitive job markets with high stress levels and expensive hiring processes. Recognizing signs of potential employee departures, taking proactive retention efforts, and understanding their positive impact on business are essential strategies for employers to adopt.

There are solutions, such as Salary.com's Compensation Software, that assist employers in implementing effective pay strategies, which are important for retaining flight risk employees. This saves on costly hiring processes and promotes a positive impact on business performance.

What is an employee flight risk?

A flight risk employee is someone who might be considering leaving a company. They could be feeling disconnected or tempted by other job prospects, which leads them to explore alternative opportunities.

These flight risk employees might be reassessing their commitment to staying with the company and actively looking at other job options. In fact, according to a survey, a significant number of Americans cited low pay, limited opportunities for career advancement, and feeling undervalued as the primary reasons for leaving their jobs in 2021. In 2023, 61% of US employees are considering resigning from their jobs.

Unfortunately, having potential flight risk can spell trouble for any business. Their flight risks employees can increase turnover rates and disrupt team dynamics. The more retention challenge a business has, the more money it stands to lose in terms of turnover costs and decreased productivity. The longer it takes to replace a departing talent with a new hire, the greater the impact on the business's bottom line.

What causes an employee to consider leaving?

There are several reasons why an employee might become a potential flight risk. Here are some of personal and professional concerns:

Stagnant career growth: Career development opportunities play a crucial role in retaining employees. Recent studies reveal this as the primary cause for flight risks.

Work-life balance: Particularly since the pandemic, employees prioritize family time and a balanced life. They seek roles accommodating this need for flexibility.

Compensation disparity: Insufficient compensation compared to industry standards often motivates employees to seek other opportunities where the company pays employees better.

Leadership impact: Employees tend to consider leaving when they feel uninspired or overlooked by their leaders, leading to diminished trust and morale.

Meaningful engagement: Beyond monetary rewards, employees desire work that makes a positive impact, fueling their motivation.

Flexibility: Remote and flexible work options gained prominence during the pandemic, with many employees now seeking roles offering such arrangements, particularly caregivers.

Health and wellbeing support: Employers must prioritize both physical and mental health to prevent burnout and voluntary resignations.

Life events: Major life changes like marriage, pregnancy, or illness can prompt a reassessment of priorities, influencing an employee's decision to leave.

Understanding employee flight risk models

Organizations are strategically planning for the organization's future leaders, particularly in terms of workforce management professional development. One key tool gaining traction in this realm is the employee flight risk model.

So, what exactly is an employee flight risk model? Simply put, it's a predictive analytical tool used by companies to gauge the probability of employees leaving their current roles or the organization altogether.

This model relies on a range of data points and sophisticated algorithms to detect patterns and warning signs associated with improving business performance metrics, improving employee satisfaction, and turnover.

The data considered typically includes:

1. Employee tenure: Duration of time an employee has been with the company.

2. Performance reviews: Assessments of an employee's job performance.

3. Absenteeism rates: Frequency of unplanned absences or sick leave.

4. Compensation: Comparison of an employee's pay against industry standards or colleagues.

5. Development opportunities: Availability of career growth and training initiatives.

6. Employee engagement surveys: Feedback from employees on their job satisfaction and commitment.

7. Social and cultural factors: Consideration of team dynamics, company culture, and values alignment.

8. External market conditions: External factors like job market trends and economic conditions.

By analyzing these metrics and applying statistical techniques, organizations can create a predictive model of employee attrition that assigns a risk score to each employee, indicating the likelihood of them leaving.

Signs an employee is about to quit

Here are numerous indications that an employee might be considering leaving the company:

Decreased motivation

Watch for signs of decreased motivation, such as declining performance, disinterest in work-related topics, and lack of participation in team activities. These behaviors may indicate that business employees perceive changes in their workload or environment negatively, leading to a decrease in their engagement and willingness to take on additional tasks.

Minimal work engagement

Potential flight risk may only fulfill basic job requirements, avoiding extra responsibilities they previously embraced. They might start arriving late or leaving early, showing a lack of commitment to their role.

Inactivity

A sudden shift to inactivity signals disinterest in company matters. Previously engaged employees may become quiet during meetings or adopt a negative attitude, contrasting their previous positive demeanor.

Increased absences

Regularly absent employees, especially those previously punctual, may be signaling dissatisfaction. Frequent sick days or vacation usage absenteeism rates could indicate job dissatisfaction and a search for new development opportunities.

Social withdrawal

If an employee's close friends within the organization start leaving, it may trigger feelings of isolation and prompt job searches among remaining colleagues. Social circles dissolving within the workplace can be a red flag for potential flight risk.

The importance of identifying employee flight risk

Recognizing when employees may be considering leaving is critical for businesses and HR teams to navigate effectively. While turnover is inevitable in business, staying vigilant helps mitigate potential surprises. Even the departure of a single employee can significantly impact the business and remaining employee, leading to costly and time-consuming re-hiring processes in a competitive job market. Additionally, existing employees may feel overburdened with extra work and experience low morale.

Engaging in timely conversations with employees showing signs of potential flight risks can be powerful. These discussions may reveal grievances that can be addressed and improved upon, demonstrating a proactive measure to retention efforts and reinforcing the value placed on the business employees.

How to identify flight risk employees and address compensation gaps

Utilizing data analysis to spot flight risk employees can empower organizations to make strategic management decisions aimed to fully eliminate employee attrition. HR professionals can harness Salary.com’s Compensation Software to pinpoint vulnerabilities and implement targeted initiatives to retain lead employees. Here’s a guide to use this tool:

1. Step 1: Conduct thorough market research

   Companies should go beyond subjective estimations and instead base their decisions on comprehensive market research when determining employee compensation. Offering competitive pay aligned with industry standards is important, requiring companies to find the optimal balance to attract and retain employees.

   By taking advantage of the market pricing feature, you can simplify the pricing procedure and provide essential insights to help you stay competitive in the current job market for talent.

2. Step 2: Ensure pay parity across the organization

   While maintaining industry-standard compensation is important, internal pay equity is equally important. Discrepancies in pay among colleagues can lead to feelings of undervaluation and discontent. Therefore, it's essential to enforce pay parity within the organization to foster a sense of fairness and equality.

3. Step 3: Implement retention-oriented incentives

   Compensation plays a significant role in influencing employee retention. To incentivize employees to stay, companies can introduce tenure-based bonuses tied to specific milestones. These incentives not only acknowledge employees' contributions but also cultivate a stronger sense of commitment to their roles and the organization.

4. Step 4: Balance compensation with other retention factors

   While compensation is critical in retaining employees, it should not overshadow other retention drivers. Companies must address various factors influencing employees' decisions to stay or leave. In addition to competitive pay, companies can enhance employee retention through:

   • Offering flexible work arrangements, such as remote work options, demonstrates a commitment to accommodating employees' needs and preferences.

   • Prioritizing employees' mental and physical well-being through comprehensive wellness programs fosters a healthier work-life balance and strengthens employee loyalty.

   • Creating a supportive and inclusive work environment where employees feel valued, recognized, and aligned with the company's values is essential. A positive company culture enhances employee satisfaction and reduces turnover rates.

Identifying and addressing employee flight risk is critical for businesses. Utilizing Compensation Software’s features, like market pricing, merit modelling, and pay equity and analytics, can assist employers effectively by implementing strategic measures to retain valuable talent.