“They Don’t Need to Settle Anymore”: The Great Resignation rolls on with workers in a dangerous but powerful position
It’s been over a year since the American workforce turned upside down, with workers sacking en masse in search of more fulfilling jobs and flexible work arrangements.
But with inflation remaining stubbornly high — and potentially here for the long haul — laggards have found another reason to abandon ship.
“It’s a labor market,” says Andrew Flowers, labor economist at job advertising firm Appcast. “And that bargaining power means that when inflation is high, it’s time to either ask for a raise or maybe find a better deal elsewhere.”
Another 4.18 million Americans quit their jobs in July, the latest figures show, almost unchanged from the previous month and still at the highest levels in decades. There remain almost two vacancies for every worker who seeks.
With the rising cost of groceries, gas and everything else cutting wages for all Americans, workers who haven’t yet moved have every reason — and opportunity — to act soon.
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The window will remain open for the time being
The CPI rose 8.5% yoy in July, putting increasing pressure on workers who would otherwise be content with the status quo.
According to a recent survey by accounting firm PricewaterhouseCoopers, one in five workers is expected to change jobs in the next year, with most leaving the job for better pay.
Over a third plan to ask for a pay raise in the next year, although this number is significantly higher in the technology sector (44%) and lower in the public sector (25%).
“Employers know that churn rates are high. You know that job openings abound. And that’s how they know their employees can be choosier,” says Flowers.
The story goes on
The added pressure of rising prices means employers can proactively consider wage increases to avoid losing employees. Private sector wages and salaries rose 5.7% for the 12-month period ended June.
“Employers have a really insatiable appetite for hiring right now,” says Flowers.
He adds that it’s unclear how long the job market will remain so tight, especially as the US Federal Reserve is raising interest rates to cool the economy.
How to ask for a raise
Whether it’s a good time for you to ask for a raise can really depend on your industry and whether your company is successful, says Chelsea Jay, a career coach from Lansing, Michigan.
The lodging and hospitality and leisure and hospitality sectors saw the highest churn rates, Harvard Business Review reports, while retail and consumer packaged goods saw the strongest growth in their churn rates. Professional and business services workers are also leaving in droves.
Flowers says it’s fair to bring up rising prices when asking for a raise, although Jay argues that shouldn’t be the focus of the conversation.
“You can talk about inflation — but more than inflation, I encourage professionals to talk about their skills and contribution to the organization,” says Jay.
She recommends talking to your peers about your salaries and doing research on your company, industry, city, state, and career level. It’s also a good idea to look at when your company typically issues raises and provide an estimate at that time.
Almost half of the workers who tried to renegotiate their pay last year were successful, according to a survey by job board FlexJobs.
What if you don’t get a raise?
If your application is denied, consider renegotiating your benefits. You can look into a hybrid work arrangement, more paid time off, or ask your employer to pay for a professional development opportunity like a certification course.
However, Jay warns against relying on short-term handouts like bonuses for customer retention.
“It’s a band-aid to cover up the bigger problem,” she says. “Companies don’t give bonuses every year. So if you’re not happy with your salary, you either need to get a raise or go to a company that’s willing to pay you properly.”
She adds that everyone’s priorities are different and when you decide to look for work elsewhere, you need to decide what’s most important to you. During your interview with a potential employer, ask about the company’s culture, leadership, role expectations, and benefits and perks you are interested in.
“Don’t calm down. You’re in a time where you don’t have to commit anymore,” she says.
What can employers do to retain talent?
Employers can see higher retention when they promote from within, Flowers points out.
“It’s one thing to say, ‘Hey, I’m going to quit this job and get a 10% raise somewhere else.’ But when a worker sees that they have a future and that they can move up through internal mobility…then they might not just accept the highest offer.”
Jay also advises employers to give employees who are leaving the opportunity to be transparent about why they are leaving in their exit interviews.
It’s important for organizations to actively respond to feedback by implementing new policies and making changes to avoid losing more employees in the future.
“[The Great Resignation] really shed light on the issues that American companies and these companies have in how they treat their employees and how they show value and how they show respect,” says Jay.
“If anything, it has made it clear to many companies that we are slipping in these areas. We have to step up our game here.”
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This article is informational only and should not be construed as advice. It is provided without any guarantee.