Wage Impacts of The Great Resignation
Many people think of The Great Resignation as being a one-time event—albeit an extended event—that started and was fuelled by the global pandemic in early 2020. With the “end” of the pandemic slowly gaining a foothold, these same people might say that The Great Resignation is over. Yet, the truth is the trend may not be at its end just yet; instead, it will likely continue to evolve and have significant and lasting consequences. People continue to quit their jobs in huge numbers, which is forcing employers to rethink and redesign their recruitment and retention strategies, with a key focus being on pay. Not only did The Great Resignation cause a shift in how people think about their purpose, values, lifestyle needs, and even relationships, it had, and continues to have, a significant impact on wages.
The Great Resignation Has Impacted Both Employees and Employers
For many employees, stories of advancement and fulfillment that have abounded throughout The Great Resignation has made quitting seem less “scary” and overwhelming. And, those same success stories have prompted jobseekers to reevaluate their values and goals as they look for a new role.
In a survey by Robert Half Canada that polled more than 500 Canadian employees, 41% reported that they have not had a pay increase in 1 year and 50% said they intend to ask for a raise this year.
Top reasons for asking for a raise included:
- 31% – to accommodate higher cost of living
- 18% – to account for additional job duties
- 16% – to reflect current market rates
According to a survey by Robert Half Canada, if workers don’t receive a raise, 36% said they will search for a new role with higher pay. Twenty-five per cent said that they will reconsider the salary conversation in a few months, and 17% will inquire about more incentives.
Employers now realize that if their loyal, hard-working employees have not received a raise in a while, retention will be negatively impacted. Their workers may start looking elsewhere; at workplaces where the pay is more lucrative and the benefits are more attractive. So, forward-thinking employers are intentionally rethinking their compensation packages. A survey of more than 200 C-suite executives across various industries revealed that 57% said they were increasing salaries for existing staff. Many total compensation packages are being revamped to offer not only career development and growth opportunities, but an empowering employee experience—including additional paid time off, flexible schedules, and remote or hybrid work options.
It is a tall order for employers. If they want to recruit and retain the best talent, they will need to conduct benchmarking, pay equity reviews, and strategic pay adjustments that include transparent compensation and benefits packages. To foster a positive culture with higher retention, employers need to honour employees’ core values and offer them compensation and benefits packages that are both intrinsically and extrinsically rewarding.
Wage Impacts of the Great Resignation for Women
Over the last year-and-a-half, many women quit their jobs for better paying positions. In the US, the Atlanta Federal Reserve Bank’s wage growth tracker showed that in April 2022, the rate of wage increases for women had been outpacing their male peers for six consecutive months. The data collected further revealed that the women getting these raises are those who are part of The Great Resignation movement.
During the same time, a record number of women left the workforce entirely, especially those in lower-paying jobs. These women, for the most part, left the work workforce for two key reasons: inadequate pay and lack of childcare resources. This mass departure of women in low-paying roles makes the data about gains for working women less reliable.
Emily Martin of The National Women’s Law Center states, “As the women doing those low-paid jobs—in restaurants, in retail, as childcare workers, as hotel housekeepers—left the workforce, the wage gap artificially appeared to be closing.” A lot of data-reporting that seems to point to a closing wage gap doesn’t take into account the significant number of lower-paid women leaving the workforce and not returning.
Yet, the wage impacts of The Great Resignation seem to be working to the benefit of women. A higher percentage of women job-changers reported receiving more favourable compensation packages in their new roles than men did. However, overall, women still earn approximately 17% less than their male counterparts.
How Career Professionals Can Help
The key question for career practitioners is how can we support our clients (both jobseekers and those currently employed) to achieve their goals during The Great Resignation movement? Here are 10 strategies:
- Research the market in depth and determine the salary and pay scales for certain positions within certain industries by viewing sites such as Glassdoor, PayScale etc. Forecast ahead.
- Support clients to seek jobs in sectors that are expanding and hiring, rather than declining.
- Prepare your client to rebrand themselves and redefine their value proposition.
- Support your client to seek 360-degree feedback and consult with their colleagues, peers, mentors, team members, family, and friends on their value proposition and their unique offerings.
- Offer your clients strategic and personalized interview coaching, including how to wisely negotiate a salary without compromising the opportunity.
- Help your clients address any skill gaps, which may be critical to closing the wage gap for themselves, even in a competitive market or industry.
- Remind your clients about the importance of being proactive in their careers. If they are unhappy and resentful about their current salary versus their workload, plan their next steps with them. This will help them to see that by being proactive, they have more control of their career than they may think.
- Help clients to understand the stress response. When it comes to money and finances, many people want to avoid or feel paralyzed by the topic. Although they may want more money, they may not be able to gather the courage to actively pursue this goal. As practitioners, we can help our clients to understand that while this response to money may not necessarily feel helpful, it may feel “normal” and help them navigate the discomfort without judgment or pressure. We can do this by teaching them to breathe deeply and release slowly, meditate, then visualize their goal beforehand. This helps to regulate the nervous system, grounds them, and releases the swirling thoughts that have been holding them back.
- Emphasize your client’s strengths, skills, and values. There are many assessments and tools you can use to highlight these. Sometimes we all just need a reminder of what we bring to the table.
- Teach your clients tools and techniques that they can use to navigate this process. For example, the power pose or Todd Herman’s alter ego can help boost confidence.
While there are both positives and negatives to The Great Resignation, we can coach our clients to turn obstacles into empowering opportunities for growth.
For information and strategies that will position your clients for success in their next job—one with fair and equitable wages—enrol in CPC’s courses and earn your employment strategy and/or interview strategy credentials.
Lori Jazvac is a passionate, award-winning Master Certified Résumé Strategist and Certified Employment Strategist through Career Professionals of Canada. As a multi-certified Master Résumé Writer and Certified Career Transition Coach, she specializes in helping clients navigate challenging career transitions. In 2013, an empowering vision inspired Lori to launch Creative Horizons Communications, a holistic career services firm where she virtually supports jobseekers around the globe to embrace their next career milestone. In her spare time, Lori enjoys dance, blogging, watching comedies and reality shows, yoga, and taking long walks in nature.
Conny Lee is a Certified Holistic Narrative Career Practitioner, Online Business Manager for coaches, Certified Career (CCS), Employment (CES), and Résumé Strategist (CRS), Trauma of Money Facilitator, and Sacred Money Archetypes® Coach. She focuses on supporting people to create the career, business, and life they truly desire and love. To learn more, visit Conny’s website at connylee.com. When she isn’t working, Conny enjoys reading, listening, learning anything related to personal development, spending time with her family, and working out.
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