February 9, 2022
Debates about the Great Resignation of the Big Quit have only intensified in 2022. American workers are retiring early, discovering new career paths, or choosing to stay home and raise families.
This trend has left major gaps in the rosters for companies of all shapes, sizes, and industries. One of the responses in 2022 that is beginning to take shape is dubbed “The Great Raise.”
Is higher pay the only solution for putting an end to this mass re-thinking of employee loyalty?
Making Sense of the Big Quit: What Is the Data Telling Us?
Businesses will likely see pay increases across the board or risk losing precious talent to competitors who are willing to offer them what they need.
A recent Grant Thorton survey found that:
- 65% of HR professionals said employee retention over the next 12 months is a key concern.
- More than 50% of companies expect to see pay raises of 5% or more this year.
- 68% of companies have already increased the number of employees eligible for cash bonuses.
As employee quit rates continue to rise, Millennials and Gen Z employees are burdened with taking on more responsibilities to fill the gaps. According to a report from SHRM:
- 55% of workers have started wondering if they are being paid enough.
- 53% are wondering if there are better jobs out there, even if they haven’t left yet.
- More than half of respondents have had a direct colleague leave in the past six months
The phenomenon of voluntary resignations is backed up by the U.S. Bureau of Labor Statistics. Based on their estimates, voluntary resignation rates have risen to 2.9% – the highest since the organization started collecting data in 2000.
The Bureau is also reporting that roughly 4.3 million people have chosen to leave the workforce since the pandemic first began.
What This Means to You
With this ongoing shift in the labor market, your organization has likely already experienced the departure of at least one employee. If not, be prepared for it this year if you don’t take steps to retain your talent.
For businesses focused on attracting and keeping their best, they’ll need to take a hard look at their compensation packages.
At the end of 2021, inflation in the U.S. rose to 7%, the highest since 1982. If your compensation package isn’t taking this into account, your employees are probably losing money working for you. And they know it.
However, the Grant Thorton survey also found that money isn’t the only motivating factor. More than half of surveyed employees noted that they would be willing to give up 10-20% of pay increases in exchange for more flexibility.
Flexibility and Remote Work Will Be the New Norm
Professor Anthony Klotz from Texas A&M University, who coined the term “The Great Resignation,” says that flexible working arrangements will no longer be an exception but the norm.
“Managers who blame external factors for turnover and refuse to offer flexible working arrangements will be the losers who struggle in the wake of the Great Resignation,” Klotz adds.
Remote work has gained significant traction in the last two years. According to estimates, roughly 1 in 4 Americans are working from home. By 2025, this number is expected to be around 22%. In other words, 36.2 million Americans will be taking advantage of remote work opportunities.
The good news for organizations is that 30% of employees say that they are more productive and engaged while working from home. This may be a major cultural shift but it doesn’t mean the work itself will suffer.
However, even with more flexibility, workers aren’t willing to overlook compensation entirely. They are only willing to give up some increase for the tradeoff, not all of it.
In LinkedIn’s Workforce Confidence Index research, 56% of respondents cited pay as the number one reason for seeking new employment. This response outranked every other factor by a wide margin.
As inflation continues to rise, the desire for higher salaries will take on even greater importance. It will be a balancing act for organizations, so don’t offer just a few new or reworked benefits without salary increases and expect employees to be happy.
Solution: Work with Your Team
As you try to navigate the Big Quit and the Big Raise, you need to have a frank conversation with your team. Ask them about their workloads, what is causing them stress, and what you could be doing to help them manage their time.
Consider offering an anonymous way for them to contribute to the conversation. This way, you’ll get a better idea of what your employees value, and how you can better meet their needs.
This is also a time to focus on bringing people together. People are more likely to ask for help if they feel like there is someone they trust in their corner, and those connections are difficult to create without a concerted effort.
Team Building Brings People Together
Organizing team building events can help your team get acquainted and have fun.
After a long and busy week, a Virtual Happy Hour & Mixology class might be what your team needs to let loose and get ready for the weekend. This event includes a cocktail kit with all the ingredients needed to create a delicious cocktail which will be mailed to each member of your team. Or, host a Virtual Poker Tournament with live dealers and find out who on your team has the guts to check-raise the boss.
If your company employs a diverse group of people, help your team develop a sense of empathy and understanding with White Privilege, Black Power. This award-winning team event hosted by Greg Tindale and Eva Lewis is designed to give your team a refreshing new take on diversity and inclusion in the workplace.
And for teams who like some friendly competition, give them an opportunity to test their skills and learn how to work better as a team with our Squad Game team building event. Based on the popular Netflix show Squid Game, our event focuses on inclusion rather than exclusion and eliminates all the violence. Your team will have to work together to build trust and think out of the box to solve interactive in-person challenges.
With millions of Americans re-thinking their work/life balance, every company will almost certainly be touched by the Big Quit in some way.
Making team building an integral part of your hiring and employee retention strategies could help you strengthen employee loyalty and improve the overall company culture. TeamBondning has decades of experience in bringing teams together and helping companies keep their employees happy.
Reach out to us to find out more about our diverse portfolio of interactive team building activities and learn how to customize them to fit your team’s needs.