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By Kaitlyn Knopp, Co-Founder & CEO, Pequity
The Great Resignation continues to cause upheaval in the talent market, as millions of professionals reassess their work situations and chart a new path for their future careers. As companies and HR leaders adapt to this volatile compensation landscape, it’s important to gain clarity on what is really driving this upsurge in turnover. Looking beyond the conventional wisdom and common misconceptions can help you design more effective recruitment and retention strategies to attract and retain top talent.
Let’s take a closer look at what’s really driving the Great Resignation.
Lie #1: “The Great Resignation is just Boomers retiring, and young talent staying home.”
It’s true that many seasoned workers have been retiring earlier than planned, and some younger talent are job-hopping or staying out of the workforce, especially if they are caring for children. But a recent article in Harvard Business Review found that the biggest increase in resignations is coming from mid-career talent, ages 30-45.
Mid-career individuals usually have worked at a few different companies and have a better understanding and appreciation for their own values and how much they want those values to align with their employer. Therefore, it is increasingly important for employers to not only be articulate and communicative about their values, they need to be proactive in understanding and adapting to their employees’ values.
Lie #2: “Companies can keep using the same pre-pandemic strategies to attract talent; we will go Back to Normal soon.”
It might be tempting for some HR leaders and organizations to hope for a return to pre-pandemic “normalcy,” but it’s more likely that the pandemic has permanently changed the way we work. Many leading tech companies are going 100% remote, telling employees that they can keep working from home forever. Top talent has more options now; there is a talent shortage in all kinds of fields and at all levels of the organization.
When it comes to compensation, companies need to continue being competitive and need to be more proactive in leading the market instead of following it, given the pace of how fast the cost of labor and even inflation is affecting the market.
Lie #3: “Let people work from home, and they won’t care as much about compensation; ask them to take a pay cut!”
It’s too simple for companies to expect that offering the ability to work from home is enough to land the candidate. But beyond just letting people work from home, there needs to be substance and meaningful culture-building alongside it. Work from home has been a benefit for most employees’ lifestyle by eliminating commutes and distractions in the office. However, by removing some of these barriers between work and home, it has sometimes inflicted a cost on people’s mental health and work life balance.
Companies have a bigger challenge in making the “substance and meaningful culture” element of the job resonate continuously with their employees. Yes, you still can build a cohesive culture as an organization, even if you’re remote-first. But whether they’re working from home or at the office, companies need to think creatively and proactively in building a culture of equity, inclusion, diversity and employee care, with a strong focus on mental health. This includes:
· Making sure your employees are not burning out.
· Creating a visible and vocal culture around work expectations.
· Ensuring that employees are taking time off.
· Having “Zoom-free days” or “mandatory disconnect/no email allowed” windows of time.
· Including mental health management resources in the company’s benefit offerings.
Companies that proactively address these concerns and “walk the walk” on being a supportive, care-oriented culture will be more likely to win the battle for talent.
Lie #4: “Remote work hasn’t changed the size of the talent pool.”
One of the biggest underrated changes of remote work is that it has actually expanded the talent pool exponentially. Companies no longer are limited by geography to hire for many skillsets; whether they want to hire on the other side of the country or on the other side of the world.
Increasingly, companies are looking for international talent that might often work for lower rates than U.S.-based talent, and without compromising on the quality of work. Other companies are navigating how to hire and retain top talent who might have moved away from San Francisco or other higher-cost-of-living areas during the pandemic.
Truth: Be transparent about pay, understand the latest market data, and lead with your company values.
There’s no one single “right answer” for how companies should navigate this challenging talent environment. Many aspects of the current volatility are still playing out, and we don’t know what the “New Normal” will be. However, there are a few key strategies that any company can embrace now that will help you have more constructive conversations with candidates and design more effective compensation programs:
Be transparent about pay. Being secretive about pay is counter-intuitive to the spirit of most pay equity philosophies. While this does not mean that companies should disclose every single employee salary or publicly post their compensation ranges, there is certainly a lot of progress that companies can make in terms of being more transparent and communicative about compensation.
If your company does not have a clear compensation strategy or compensation ranges for all current and future roles, please contact Pequity to assist in developing your compensation ranges.
Stay up to speed with market compensation data. Given the fast movement of the talent market in the past 12 months, traditional compensation surveys may not align with what candidates are communicating to talent acquisition teams in terms of what they are looking for or what competing offers they have. Companies need to have their talent acquisition teams actively record competing offer data from their candidates and create their own internal database to assess market rates.
Lead with your values and communicate your sense of mission. The talent market has never been this competitive, but if companies are willing to adapt to the times and change their strategies to align with what talent wants now, they will be more likely to succeed. Job candidates have more power than ever, but that doesn’t mean employers are helpless; there are many opportunities to find and retain the right talent with fair, competitive compensation that keeps everyone happy.