“Should I stay or should I go now?” That’s the question plaguing workers as economists warn of a recession.
Workhuman’s Human Workplace Index report, which dropped on Sept. 2, excavates employees’ recession-era fears. For workers experiencing economic anxiety, pay is a top stressor.
From an employer’s standpoint, Workhuman’s report seemingly indicates loyal employees will stay loyal. Or more specifically, those who are satisfied with their salary and team pay model will be retained. In the survey on which the report is based, 67% of respondents said they were “very likely” or “definitely” planning to stay at their current company. When asked why, about a quarter cited “good benefits” and one-fifth pointed to compensation.
This tracks with previous reports regarding the slowed pace of the Great Resignation; a July 2022 report by software company Paychex suggested that about half of employees are sticking with their company for the next year. Outside of compensation and benefits, job stability was the main reason workers told Paychex they were staying put for the next 12 months.
Workhuman’s September report clocked something similar: About 67% of recent respondents said they are not worried about being laid off in the near future. In turn, the rest (about 43%) were concerned about the impact that economic uncertainty would have on their professional life.
Many in this sub-category are bracing themselves for irritable coworkers; about 62% figure “people will be more stressed and tensions will be high.” Along with general malaise, work responsibilities may pile up; more than 45% of survey-takers said that layoffs would cause their team to be short-staffed.
The throughline of compensation remains ever-present. Workhuman data suggested approximately 43% of workers — across age groups, engaged in remote work and in-person work, working in active and sedentary roles — believe they’re less likely to get a raise. Additionally, 37% said they believe their hours will be cut, about 32% believe they’ll have to work harder to prove their worth and 23% think their pay will be reduced.
What does it all mean? Whether deemed insufficient or competitive, pay continues to be a big deal for workers. The Pew Research Center reported in March that most people who quit do so because of low pay. Since then, financial decision-makers, people teams and recruiters have been acting accordingly. For example, in August poll results, 86% of employers surveyed by WTW said they had been hiring candidates at the higher end of salary ranges.
In the same study, 81% said they are offering sign-on bonuses to attract talent and, notably, 65% of employers said they are issuing retention bonuses to keep workers by their side. Additionally, about 30% to 45% of respondents reported they were considering budget tweaks to allow for higher salaries.
On a similar note, a July WTW report found that, looking ahead to 2023, U.S. companies plan to increase salaries by 4.1% on average.
Calls — and mandates — for pay transparency also remain a factor in recruiting and retention strategies. Beyond state and local compliance, many employers are pre-emptively posting job descriptions with a proposed salary or salary band.
With these trends in mind, HR pros can address employee financial anxiety — as detailed in the Workhuman report — with a fresh approach. Among other things, the report’s conclusion that workers retain the upper hand in the job market may drive people teams and recruiters to consider pay transparency more heavily.