Want your employees to stick around? Pay them more!

You’ve probably heard about the Great Resignation. The wave of millions of workers quitting their jobs, leaving employers high and dry just as pandemic restrictions lift. And probably seen the signage posted on the front doors of fast-food restaurants, declaring that hours are reduced because nobody wants to work anymore. You’ve probably seen the headlines. Like this one from the Washington Post, that shrilly declare that “4.3 million Americans left their jobs in December.” You’ve probably heard companies claim that stimulus cheques and programmes like CERB are letting people sit at home and collect a cheque instead of earning a living.

What you may not know is that the story of the Great Resignation is more complicated than it seems on the surface.

First, the data on the “Great Resignation” is frequently misrepresented in headlines to get clicks. 4 million workers quitting their jobs every month sounds terrifying, right?

However, according to this article from the Harvard Business Review, “what we are living through is not just short-term turbulence provoked by the pandemic. Rather the continuation of a long-term trend.” According to the same article, “the average monthly quit rate increased by 0.10 percentage points each year” from 2009 to 2019. So people are quitting at higher rates than a decade ago. But the shift was so gradual and linear that it wasn’t newsworthy.

Another factor that gets ignored in the fearmongering around the Great Resignation is the number of people leaving jobs who are simply retiring instead of quitting. The HBR article also goes on to say that “academic studies and online surveys alike have consistently found that the Great Resignation might better be thought of as the Great Retirement.”

The article states that, while people blame stimulus cheques and programmes like CERB and EI on the record number of workers that quit their jobs in 2021. However, the number of 47 million “included many workers who might otherwise have quit in 2020 had there been no pandemic”. Fewer people quit jobs in 2020 than in 2019. Often more hesitant to quit amid the uncertainty of the pandemic. In fact, far fewer people quit that year than projections based on the previous decade of data predicted.

Okay, so people are quitting jobs, even if the panic about it is mostly unwarranted. But why are they quitting?

Money is, unsurprisingly, a significant motivating factor in leaving a job and finding a new one. According to this 2022 article from the Pew Research Centre, 63 per cent of workers who quit their jobs in 2021 cited low pay as a reason for leaving. 37 per cent cited it as a major reason. 63 per cent also cited “no opportunities for advancement” as a reason for leaving.

In 2014, Forbes published an article that had a shocking statistic. “Staying employed at the same company for over two years on average is going to make you earn less over your lifetime by about 50 per cent or more”. And that’s the conservative estimate. Why will employees want to stay in jobs where they aren’t being paid what they’re worth? They’re tired of begging for scraps and getting crumbs, so they move on.

Job Hoppers – Off they Go!

Job-hopping is, increasingly, the way to go if you want to advance in your career. According to the HBR article, there is “evidence that many [workers] are ‘reshuffling’. That is, moving between jobs in the same sector, or even between sectors”. The same article states that “Bharat Ramamurti, deputy director of the National Economic Council, recently coined the phrase “the Great Upgrade”. It refers to the pattern of higher quit rates in lower-wage industries.

The Pew Research Centre found that “for the most part, workers who quit and are employed somewhere else see their current work situation as an improvement. 56 per cent say that they earn more money in their new job. 53 per cent say they now have more opportunities for advancement.

The environment and culture of the workplace is another factor. 57 per cent of workers said that feeling disrespected at work was a factor in quitting. This BBC article found that for many workers, “the decision to leave comes as a result of the way their employer treated them during the pandemic”. Companies that support their workers are repaid with loyalty, while companies that do not see workers leave in droves. Quelle surprise!

So, how can you insulate your company against the Great Resignation?

Based on the data above, the answer to retaining employees seems pretty obvious: pay them more. Offer more and better benefits. Offer the flexibility of remote and hybrid work. Reward high-performing employees with opportunities for advancement and education. It’s not rocket surgery.

If this sounds crazy to you, consider that lots of companies are already doing it. That Washington Post article I mentioned in the intro? It states that “many companies are racing to compete with each other for workers, raising wages, adding cash bonuses and sweetening the pot in other ways to attract applicants. And that, in turn, creates a climate for workers to have more leverage and options than at perhaps any other time in recent history.”

It’s a workers’ world, baby. Employers just live in it.

By Emilie Charette

“I’m a full-time university student who just finished my bachelor’s degree in communication and media studies, a part-time content creator, and a part-time D&D dungeon master. When I’m not researching and writing, I love meeting new people, hearing their stories, and getting new perspectives on life”

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