The increasingly global market for talent makes it critical for companies to understand the factors that affect employee attraction and retention everywhere they do business. Organizations that do not balance financial imperatives and employee reward preferences risk losing their best talent.

The 2007/2008 Global Strategic Rewards® study examines how companies in Asia-Pacific, Canada, Europe, Latin America and the United States are tackling attraction and retention issues and reward management. The first half of the report highlights the similarities and differences between the regions, while the second half focuses on U.S.-specific data.

Global Key Findings

Regardless of region, the study found:

• The majority of employers have problems attracting critical-skill employees (70 percent) and top-performing employees (67 percent).
• Employers have an incomplete understanding of why employees join or leave their organizations. For example, employees rank stress as a top reason they would leave, but it is not even among the top five reasons cited by employers.
• When employees are satisfied with stress levels and work/life balance, they are more inclined to stay with their companies (86 percent versus 64 percent) and more likely to recommend them as places to work (88 percent versus 55 percent).
• Financially high-performing firms get performance management right. For example, their managers are much more likely to link organizational performance to rewards (51 percent versus 38 percent of low-performing organizations).
• Clearly setting expectations and delivering on the reward promise is a formula for a more engaged workforce. Sixty-nine percent of employees who say their employers succeed at both promise and delivery are highly engaged, versus roughly 25 percent overall.

U.S. Key Findings

• Employers report difficulty in attracting and retaining employees — particularly, top-performing and critical-skill employees — for the fourth year in a row. Almost two-thirds (64 percent) of employers are having difficulty attracting critical-skill employees, while 60 percent are having difficulty attracting top performers.
• Consistent with the global findings, U.S. employers and employees have different ideas about why employees join or leave. As a result, some of the actions that employers are taking to attract and retain employees may be counterproductive.
• As employers continue to manage their cost structures, they are putting more money into variable pay and raising the bar for performance. As in 2007, more than one in five (21 percent) increased the size of individual target awards for 2008.
• Merit-increase budgets for 2007 remained relatively stable, at an average 3.6 percent, and are expected to rise only slightly, to 3.7 percent, in 2008.
• Highly engaged employees are more than twice as likely to be top performers than are other employees.

Region-Specific Findings (PDF supplements)
These regional supplements to the 2007/2008 Global Strategic Rewards Report and United States Findings are available in a downloadable PDF only.

• Asia-Pacific
• Canada
• Europe
• Latin America

To purchase a full regional report, click here.