Compensation. Always the first thing employees mention when asked about their reasons for staying at their job or leaving it. Many companies froze salaries and even reduced them during the pandemic. So we were wondering what’s happening with compensation two years after COVID-19 wreaked havoc on, well, just about everything.
Our take from where we sit as recruiters? With the Great Resignation well underway, employers might want to step up their compensation efforts for the better to keep top performers.
The ‘halves and half nots’
Our poll found that heading into the final days of 2021, only half of respondents had received a raise. And of those, half saw a 3 percent increase or less. Since job switching is often the fastest route to a higher salary, it’s not surprising to hear that the rate of resignations has been increasing over the last several months, with no sign of abating.
Raise in 2022? Don’t hold your breath, say half
As 2021 progressed, some employers were already restoring salaries that were cut during the pandemic and planning for larger end-of-year pay increases and 2022 raises. Yet we’ve seen many companies only become motivated to make positive compensation moves once The Great Resignation threatened their organization’s employee retention. Undercompensated talent can be easily lured.
Considerate compensation is elusive
When it comes to talent strategy, the shrewdest employers anticipate the impact of the economy on ‘real’ wages (i.e., cost of living increases, looming inflation, etc.) and make compensation changes that mitigate financial stress on their employees. As job candidates search for employers that offer the most financially secure workplace, they are increasingly considering an employer’s reputation for considerate compensation.
Exit this way
Employers holding back on compensation are making a high stakes gamble in this candidate-driven hiring market. Even during the best of times, higher salary is often the number one reason people seek a new job and leave their old one. Emerging from one of the worst times in recent history, many employees are now looking to make up for lost earnings during the pandemic. Better compensation is perhaps an even greater attrition driver. Unless a company is purposely clearing the bench to replace gaps with new talent, not rewarding deserving employees with raises this year is an eyebrow-raising move.
We’ve said it before and we’ll say it again: When it comes to attracting and retaining talent, money speaks the loudest. “Show me the money” is not just an iconic movie line (hello, Jerry Maguire) but is a mantra among those deserving employees who pushed hard through the pandemic to help keep their companies afloat and even thriving. Organizations must recognize that the largest token of appreciation they can offer top talent is indeed higher compensation.