PwC Saratoga Benchmarking

2022 Survey Results

Trends in turnover, talent and diversity

Saratoga
A PwC Product
It was a challenging year for US labor markets, with
unemployment hitting record low levels and wages
rising in many industries. At the same time, many
companies grappled with labor disruption, demands
for more flexible work arrangements, improvements
in diversity and inclusion, and more. All of this
resulted in companies injecting more energy and
resources into their talent efforts.

PwC’s annual Saratoga workforce benchmarking

report*, which surveyed over 400 companies
across more than 15 industries, shows a majority
of organizations ramped up their talent acquisition

“
efforts last year. External recruitment rates rose
by 76%, promotion rates climbed by 54%—and
employee mobility rates, which includes lateral and
upward movement, jumped by 17%. As we allocate our HR budget, I’m asked ‘What
does the data tell us? I can quickly look up the
Saratoga benchmarking data and better understand
where we should be dedicating dollars. It shows
us how we’re performing against our peers in key
* Unless noted otherwise, benchmark results represent median values. In most cases, increases
areas, such as talent acquisition and retention.
and decreases year over year represent the percent change, i.e., relative change.
- Human Resources Insights and Analytics Partner

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Turnover: Responding to
labor disruption

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One of the biggest concerns for most businesses in 2021 was

+37%
the Great Resignation. Saratoga’s survey found that while there
were more resignations ­– ­­the median voluntary separation rate in
2021 rose to 15.9% from 11.6% in 2020 across all industries ­–
people didn’t leave the workforce as many had predicted.
Voluntary separation rate (11.6% 15.9%)

Voluntary separation rate

In fact, the Great Resignation turned out to be more of a Great
All industry
Reshuffling, as many of those who did leave jobs ended up 15.9%
going elsewhere – often for better pay and newer opportunities. 11.6%
Hospitals and health systems
19.8%
13.6%
Professional services
19.5%
13.1%
Technology
14.5%
10.3%
Financial services
12.8%
9.5%
Manufacturing/engineering
11.8%
8.6%
Voluntary Separation Rate—Percent of employees who
4 I PwC Saratoga Benchmarking 2022 Survey Results voluntarily left the organization during the survey period.
Ramping up talent efforts to respond
to massive turnover spikes
+76%
External Recruitment Rate

(16.2% 28.5%)
External hires as a percent of
employee headcount
Increased turnover rates in 2021 forced many companies to
intensify their hiring efforts, with external recruitment rates
spiking to 28.5% from 16.2%. While that’s a large increase,
the jump may also be a result of preemptive action taken
by some companies to offset expected loss of staff. Some
+54%
respondents left job postings up on a semi-permanent basis Promotion Rate
to keep applications in positions that had particularly high
(8.2% 12.6%)
turnover coming in.
Percent of headcount promoted

Overall, recruitment spend increased in 2021, though

filling positions from within the existing workforce,
which is generally cheaper, was the preferred option.
And the promotion rate climbed to 12.6% from 8.2%.
+17%
Mobility Rate

(18.0% 21.0%)
Percent of headcount experiencing
lateral or upward movement
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With so much pressure to fill vacancies, the median time to accept
for external hires—the number of calendar days between the job
requisition approval and acceptance by an external hire—dropped
-24%
in 2021 to 41 days from 54 days. As good as that may sound for External Hires Time to Accept
companies needing to fill roles, it appears the increased hiring (54 days 41 days)
speed has come at a cost. The first year turnover rate, the number Average number of calendar days from the
of employees who left an organization with less than one year of date a job requisition is approved to the
employment, increased by 12% in 2021. date an offer is accepted by an external hire

+12%
All this suggests that the rush to hire may have led to inadequately
considered offers and acceptances.

Among those with less than one year of service, 28.9% departed
First Year of Service Turnover Rate
voluntarily, a 36% increase year-over-year. While the higher number
of voluntary departures within the first year may have been a (23.3% 26.1%)
symptom of a hot labor market, it may also reflect a phenomenon Percent of employees with less than 1 year
dubbed the “Great Regret.” of service that left the organization

+36%
First Year of Service Voluntary Separation Rate

(21.3% 28.9%)
Percent of headcount experiencing
lateral or upward movement
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Given that labor issues are not expected to go away
anytime soon, companies should make every effort
to avoid regrets, which can be financially costly. How
can companies hire the right people? For one, be
careful about overselling a role to confirm with the
candidates’ higher expectations. Also, make sure the
work-related expectations of your company and your
employees – and future staff – are aligned. It’s also
important to think carefully about what kinds of skills
you want to hire for and have high-quality onboarding
and training experiences—these efforts can keep
people engaged and reduce turnover.

“
Understanding your—and your employees’—
expectations and means acquiring a detailed
knowledge of your workplace culture through
surveys, employee listening programs. It’s Our team is always interested in seeing the Saratoga
important to stay in tune with your employees’ and data on turnover. It’s been a valuable input as we set
candidates’ preferences so you can build a better up benchmarks for our own internal divisions. The
employee experience value proposition. dashboards we create for HR and managers show
if they’re on target or if they need some help. Then,
the HR business partners can work with them and
make improvements as needed.
- Senior HRIS Analyst
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More turnover in younger generations

Change wasn’t uniform across all cohorts and demographics.

The reshuffling impacted Gen Y employees (defined by Saratoga
as those born between 1982 and 2000) the most. Gen Y
employees had a voluntary separation rate 5.3% higher than the
voluntary separation rate of all employees. Conversely, Gen X
employees (defined by Saratoga as those born between 1961
and 1981) had a voluntary separation rate that was 5.4% below
that of all other employees.

Why the difference? Potentially because Gen X workers tend

to occupy more senior positions within organizations and have
achieved a more stable point in their career, and therefore tend
to have less of a desire and need to move. Members of Gen Y,
a characteristically more restless group, are likely more eager to
change jobs in order to move into more senior positions and may
be more willing to take on new experience and opportunities.

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At the same time, promotion rates within organizations were
higher among Gen Y than Gen X. The Saratoga survey also
tracked how many people voluntarily left their jobs in their
first year of employment and found that Gen X and Gen Y had
voluntary separation rates of 1.2 and 3.2 percentage points
above that of all employees as a whole, respectively.

What might this mean for employers’ talent strategies going

forward? Many people took a collective pause during the
pandemic that led many to reevaluate their priorities—including

“
what they wanted from their careers. Labor markets have shifted
in employees’ favor, and their expectations of their employers
are far greater than before, whether it’s pay, flexibility or overall
Our company announced a multimillion dollar
treatment. Employers should take note and make adjustments
where they need to enhance the experience for specific investment in our workforce to help recruit and
populations within the workforce. retain employees. Saratoga was valuable in
supporting our decision-making for the initiative.
The data played a key role in helping us determine
what we needed to do to position ourselves as an
employer of choice.
- Human Resources Insights and Analytics Partner
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Driving DEI efforts with
data insights

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When it came to diversity, the Saratoga survey found that women
and racially/ethnically diverse populations were more likely than
all employees as a whole to voluntarily leave their jobs within
their first year of employment by 4.4 and 9.1 percentage points,
respectively, in 2021. This emphasizes the need for organizations
to understand the various experiences of the sub-populations
within their workforce and to confirm they’re thoughtfully creating
tailored experiences for these groups.

More broadly, women (and white men) had voluntary separation

rates only 1 percentage point below that of all employees, while
racially/ethnically diverse employees separated at a rate that was
around 2 percentage points higher than all employees. Diverse
employees and women also had promotion rates that were 2.5
percentage points and 0.3 percentage points below that of all
employees, respectively. White men had a promotion rate that was
3.1 percentage points below that of all employees, and this may
likely be because they’re already holding more senior roles within
their companies.

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 Promotion Rate by demographic Voluntary separation rate by demographic First Year of Service Voluntary Separation Rate
(difference vs. all) (difference vs. all) by demographic (difference vs. all)
5.3%
2.4% 9.1%

1.7%

4.4%
-0.3%
-1.0% -1.0%
3.2%

1.2%
-2.5%
-5.4%
-3.1%

-4.1%

Gen X White Diverse Women Gen Y Gen X Women White Diverse Gen Y Gen X Gen Y Women Diverse
Men Men

Definitions
Racially/Ethnically Diverse (i.e., Diverse): Employees who are of American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or other Pacific Islander, Hispanic or Latinx background, or classified as Two or More Races.
Generation X: Employees born between 1961-1981.
Generation Y: Employees born between 1982 - 2000.

12 I PwC Saratoga Benchmarking 2022 Survey Results

 Management and Executive Headcount Percent (difference 2021 vs. 2020)

2.4%
With diversity, equity and inclusion (DEI) being top of mind for most
companies, they are devoting more people to that effort. According
to the Saratoga survey, businesses devoted one to two more FTEs in
1.4%
the DEI function per 10,000 employees in 2021 than they did in the 1.3%
previous year. While all industries have seen an uptick in DEI-related 1.0% Women
0.8%
staffing, financial services companies had the highest number of
Diverse
FTEs in the DEI function relative to the entire workforce.
Diverse Women
-0.1%

Management Executive

DEI Function FTE Ratio (number of DEI FTEs per 10K FTEs)

4.5% 2020

Increased attention to DEI has yielded some positive, though 3.7% 2021
3.3%
modest, results. From 2020 to 2021, the percentage of racially/ 3.2%
ethnically diverse employees in management positions
2.3% 2.2% 2.2%
increased by 2.4%, while the percentage of white women in
these positions rose by 1%. 1.7%

All Financial services Manufacturing Hospitals &

13 I PwC Saratoga Benchmarking 2022 Survey Results Health Systems
Diverse women in management roles, however, declined by
0.1%. At the executive level, the percentage of racially/ethnically
diverse employees increased by 1.4%, the percentage of white
women increased by 0.8% and the percentage of diverse women
increased by 1.3%.

DEI efforts and investment in the DEI function are expected to

increase further, but making meaningful change involves more

“
than adding FTEs to the DEI function. Many organizations are
acting on their commitment to diversity, equity and inclusion.
Organizations and these growing DEI functions are creating
holistic DEI strategies and making sure the vision aligns with the We’re very strong in diversity, equity
company’s purpose, culture, values and business. and inclusion initiatives here, and we’re
trying to become an even more diverse
organization. Saratoga metrics help us
understand how our peers are doing in the
area of DEI, and they help us see whether
or not we’re in the ballpark.
- HR Business Analyst
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Leading organizations are using analytics and benchmarking tools, such
as Saratoga, to inform their strategy and determine a path forward. They’re
tracking diversity metrics on dashboards and comparing against industry
benchmarks to understand where to focus their improvement efforts. In
addition to benchmarking, companies are using surveys and employee
listening programs, as well as other types of analytics like pay equity analysis
to shape their DEI approaches. All this data can then inform the creation of
new training and upskilling programs, as well as changes in company policies,
improvements in recruiting practices and more.

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Making your workforce more
resilient amid disruption

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Going forward, four forces are shaping the future of work. The trends we’ve summarized from the Saratoga Benchmarking
2022 Survey results are further evidence of these four forces, and provide data and facts that reinforce these dynamics.
Understanding these forces and how they interact with one other is important to creating and maintaining a vibrant
workforce, attracting and retaining talent, and improving business performance and outcomes. They are:

1 Scarcity
2 Rivalry
3 Humanity
4 Specialization

This refers to the growing talent Rivalry is what it sounds like: To embrace humanity at Given how quickly the world is
shortage. Over the last year, employers are becoming work, policies around DEI changing, managers must think
employees have been given far increasingly more competitive with and environmental, social and about and anticipate what kinds
more power in the hiring process. one another to attract scarce talent. governance (ESG) issues are of specialized skills they’ll need to
They can now dictate wages to They’re offering more benefits, becoming increasingly important to hire for to remain competitive in
a larger degree and weigh many flexible work arrangements and prospective employees, especially the future. They should also think
options before deciding on what other perks. To keep up, companies Gen Z workers, and therefore to a about what kinds of roles could get
they want to do next. Scarcity must not only fill immediate needs, company’s talent strategy. To attract displaced. If the other three forces
can also refer to a lack of skills in they must also anticipate the skills the leading talent, companies should are folded into company hiring
a particular area, both within an they’ll require down the road to present their values and purpose in strategies, businesses can attract
industry or an individual company. remain competitive. a way that resonates with recruits. the kind of rare and specialized
Skill building and rescaling can Employees are now looking for talent that can give them the edge
help bridge these gaps. employers to imbue their workplaces over their competition.
and their experience with humanity,
an approach that includes inclusion
and accounting for societal impact.

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Get creative—boost engagement
and leverage more data
Labor demands have shifted the balance of power from employer
to employee. With employees choosing where they want to go,
employers are under immense pressure to compete for, attract,
and retain talent in new and different ways.

Through the Saratoga benchmarking program, organizations

can access hundreds of HR and talent benchmarks via an easy-
to-use online tool, and use that data to identify gaps in their

“
organization, help determine where to make investments and
better understand how well the business is doing around talent
acquisition processes, DEI, and turnover, among other areas.
When our leadership team requests
Saratoga benchmarking data from PwC, it
carries a lot of weight. The data provides
comfort about where we are relative to
our peers, and also spurs actions that we
need to take.
- Consultant, Human Resources Services & Governance

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Companies are also combining listening tools (like the Listen Platform, a PwC offering) with Saratoga benchmarking to
gather and understand employee sentiment so they can get even deeper, real-time insights and understand where they need
to pivot, determine which aspects of their talent strategy to ramp up, and identify areas that deserve celebration or can help
influence other improvements.

Ramping up overall total rewards can also be helpful in boosting talent acquisition and retention. For example, organizations
are increasing compensation, improving benefits, freezing insurance premium increases and offering referral bonuses. Others
are even getting creative with appreciation gifts, built-in PTO banks at the first day of hire and moving to higher per-hour
minimums to be competitive and garner goodwill externally.

Leveraging benchmarking insights to make data-driven decisions and investments in...

Talent
Talent
acquisition
acquisition Attrition/retention Workforce planning Diversity, equity, inclusion

Are we filling roles with quality What perks and total rewards can Is our organization structured to How do the experiences of various
candidates and managing the we extend to boost retention rates maximize leadership and resource workforce populations compare?
employee lifecycle process? and remain competitive? efficiency?
ƒ Measure progress against
Are recruiters properly balanced and ƒ Benchmark turnover For HR teams, do we have the right internal goals
managing their workload? ƒ Evaluate benefit offerings (PTO, staffing ratio? ƒ Identify improvement areas
referral bonuses) across the employee lifecycle
ƒ Assess recruitment needs ƒ Determine team sizes
ƒ Measure onboarding ƒ Determine the mix of functional
effectiveness and sub-functional employees

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The bottom line: For the foreseeable future,
companies will need to find more creative
ways to attract and retain talent. That
said, it’s important not to fill vacancies too
quickly or hire talent at the expense of the
quality of your hires. There’s little doubt that
those who use data to make more informed
decisions, and those who can create a
more diverse, equitable and inclusive
organization, will have more engaged and
more productive employees who will want
to stick around for years to come.
The Saratoga benchmarking program can empower you
to create better employee experiences by providing deep
insights about your workforce and comparisons against your
industry peers. In this era of disruption, having a tool like this
is invaluable as you build and execute on your workforce
strategy and improve employee engagement and experiences.

Learn more about Saratoga here or connect with a member of our team today.

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network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This document is not intended to
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