Written by Brett Rudy
March 5, 2019
Employees are the most valuable asset at any company. Employees create and sell the company’s service or product, manage customer interactions, create company culture, and are the face of the brand.
Onboarding and training of new employees comes at great expense, and losing seasoned and top-performing employees is even more costly. That is why it is key that HR professionals understand the factors that contribute to flight risk, and what they can do to minimize flight risk within their organization.
At Salary.com, we define flight risk as the likelihood that an employee or a top performer will leave your company – typically for a better job opportunity elsewhere. A flight risk employee is typically seeking a higher salary, a promotion, or a new challenge outside your organization, often because they are dissatisfied with their current pay and career opportunity within your organization.
If an employee feels stuck in their role, underpaid in comparison to their lower-performing or less-tenured peers, or even if they recently received a promotion but didn’t get the raise they desired, they are a flight risk. In those cases, it’s natural for them to seek greener pastures elsewhere.
Here at Salary.com, we have worked with thousands of clients to define the meaning of flight risk and create tools that enable companies to identify flight risk employee while there is still time to take corrective action. We’ve thoroughly studied flight risk, meaning we’re in a unique position to offer insights into how you can get ahead of flight risk in your own organization.
What is a high-risk employee? What is a flight risk employee? Not all organizations use the same term for these types of employees. In general, a flight risk employee is one who is dissatisfied enough with their current pay, position, or prospects to look elsewhere for new opportunities.
Your organization may use different terms to describe these employees. They may be referred to as:
The ideal employee is one who works hard and stays with the company for years – and typically feels they are compensated fairly along the way. But not all employees feel that way. Seeking to retain every employee is not realistic and it is nearly impossible to do, especially if your company has lots of employees.
It is valuable to focus retention effort on top-performing employees and those employees who are in critical roles that your organization can’t live without – especially those flagged as a flight risk. And before you can begin to discuss solutions for your turnover problems, you must first identify the flight risk employees in your organization who meet these criteria.
Luckily, Salary.com has built a flight risk assessment tool to help identify these individuals. Our configurable flight risk report allows you to connect the dots between the market competitiveness of your pay programs and the other variables in your organization that can contribute to flight risk, such as employee performance and tenure. This allows you to quickly spot employee outliers, such as top performers who are underpaid versus the market – a classic flight risk scenario.
Once flight risk employees are identified, you can begin to take corrective action to help improve your likelihood of retaining these highly desirable individuals, including calculating the cost to bring these employees in line with the market.
Turnover rates in the U.S. have been steadily increasing over the last five years due to lower unemployment rates, skill shortages in the labor market, and an increasing number of Baby Boomers retiring. Collectively, these costs add up for a business – and they’re especially unfortunate when they’re associated with flight risk that could have been prevented.
Download our white paper to further understand how organizations across the country are using market data, internal analytics, and strategic communication to establish an equitable pay structure.