By Peter Weddle, CEO TAtech
There have been a slew of survey reports recently, all trying to pinpoint what’s going on in the talent market. Is it a Great Resignation or a Great Reshuffling? Is it a protest movement or simply workers taking advantage of a favorable market? The evidence suggests that both dynamics are at play, and yet, I think they miss what’s actually driving a record number of people to hand their employers a pink slip.
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A recent SHRM survey found that 69 percent of those who quit had another job lined up. They made the change for the very same reason most people switched jobs before the pandemic: to acquire better pay, more helpful benefits and more career opportunity. They were making a rational decision based on market conditions. The upside advantage was significant and the downside risk was minimal.
That characterization of the situation is undoubtedly correct, but it’s also incomplete. It describes what happened, but doesn’t indicate why. It fails to clarify what drove those transitioning workers to pull the trigger. After all, they could have just as easily looked at their own situation and the market and concluded that they liked it enough to stay right where they were. Instead, millions of them headed for the door. What was their motivation?
Why & Why Now?
It's the worst kept secret in the workplace. If you want a raise that increases your take-home pay by more than 2-3 percent (or – gasp! – one that’s equal to or even exceeds the rate of inflation), you have to change employers. Despite the prevalence of sophisticated compensation methodologies in many HR Departments, an awful lot of employers fail to keep up with the market when adjusting internal pay levels. So, what’s the employee’s experience? They watch the buying power of their pay shrink, even as they see job openings advertised by their own employer with much higher compensation.
That disconnect between what’s happening inside an employer and what it’s doing outside to attract talent is what’s motivating many of these job changers. Call it pay back or more politely comeuppance. The dictionary defines the latter term as “a punishment or retribution that one deserves; one's just desserts.” We humans hate change, but these career rebooters are enduring it because they’re tired of being ignored and under-valued.
What does that mean for those of us in the talent acquisition space?
First, offering hiring bonuses and even better pay for new hires can turn into a formula for a retention revolt by “old hires.” If commensurate financial incentives aren’t simultaneously provided to current employees, recruiters will find themselves on a treadmill of never-ending requisitions as today’s coworkers become tomorrow’s drop-outs.
Second, maintaining pay equity is just as important as engaging in pay competitiveness. It’s not enough to ensure internal pay levels are aligned with those in the market. Employers also must commit to and actually deliver those aligned levels to everyone doing equivalent work in the organization, regardless of their gender, ethnicity or age.
The Great Comeuppance has been a long time coming, but it’s here new and having a significant impact on company operations and financial performance. The only way an employer can avoid it (or at least minimize its prevalence) is to stop paying workers for attraction alone and start paying them for their life cycle contribution … for their first day and every day thereafter.
Food for Thought,
Peter Weddle is the author or editor of over two dozen books and a former columnist for The Wall Street Journal. He is also the founder and CEO of TAtech: The Association for Talent Acquisition Solutions. You can download his latest book – The Neonaissance – for free at OneStoryforAll.com. And, if you don't have time to read the entire book, just download a short excerpt of his inspiring message.