‘You don’t need to settle anymore’: record inflation keeps the big quit going

It’s been more than a year since the American workplace has been turned upside down, with employees quitting en masse in search of more fulfilling jobs and flexible work hours.

But as inflation hits a 40-year high, the laggards have found another compelling reason to jump ship.

“It’s a labor market,” says Andrew Flowers, a labor economist at jobs company Appcast. “And that bargaining power, it means that with high inflation, now is the time to either ask for a raise or potentially find a better deal elsewhere.”

An additional 4.4 million Americans quit their jobs in April, according to the latest figures, almost unchanged from the previous month and still among the highest levels in decades.

While vacancies have dwindled, there are still nearly two jobs available for every worker who seeks.

With the rising cost of food, gas, and everything else giving all Americans a pay cut, workers who haven’t yet moved have every reason — and every opportunity — to act quickly.

The window remains open for now

The consumer price index soared to a dramatic 8.6% in May from a year earlier, putting pressure on workers who would otherwise be happy with the status quo.

Globally, one in five employees are likely to change jobs in the next year, with most leaving for better pay, according to a recent survey by accounting firm PricewaterhouseCoopers.

More than a third plan to ask for a raise next year, although the number is significantly higher in the tech sector (44%) and lower in the public sector (25%).

“Employers know quit rates are high. They know that the job offers are plentiful. And so they know their employees can be more selective,” says Flowers.

The added pressure from rising prices means that employers may consider proactively raising wages to avoid losing employees. Wages and salaries in the private sector rose 5% for the 12 months to March.

“Employers have a really insatiable appetite right now to hire,” says Flowers.

However, he adds, it’s unclear how long the labor market will remain so tight, especially as the Federal Reserve raises interest rates to calm the economy.

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How to ask for a raise

Whether or not it’s a good time for you to ask for a raise can really depend on your industry and how well your organization is doing, says Chelsea Jay, a career coach based in Lansing, Michigan.

The accommodation and food services and leisure and hospitality sectors have seen the highest dropout rates, reports harvard business review, while the retail and non-durable goods manufacturing industries saw the strongest growth in their quit rates. Professional and business service workers are also leaving in droves.

Flowers says it’s fair to bring up the price hike when asking for a raise, though Jay says it 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 what they’ve brought to the organization,” says Jay.

She recommends talking to co-workers about your salaries and researching within your company, industry, city, state, and career level. It’s also a good idea to review when your company typically grants raises and bring an estimate to the table at that time.

Nearly half of workers who tried to renegotiate their salary last year were successful, according to a survey by job search site FlexJobs.

What if you can’t get a raise?

If your claim is denied, consider renegotiating your benefits. You can consider a hybrid work plan or more paid time off, or ask your employer to pay for a professional development opportunity, such as a certification course.

That said, Jay cautions against relying on short-term subsidies, like retention bonuses.

“It’s a band-aid to cover up the bigger problem,” she says. “Companies don’t give bonuses every year. So if you are unhappy with your salary, either you need to get a raise from them or you need to move to a company that is willing to pay you right.

She adds that everyone’s priorities are different and you need to figure out what’s most important to you if you decide to look for work elsewhere. When interviewing a potential employer, ask questions about company culture, leadership, role expectations, and benefits and perks that interest you.

“Don’t settle. You’re in a time where you don’t have to settle anymore,” she says.

What can employers do to retain talent?

Employers can see better 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 if a worker sees they have a future and can move up the ladder through internal mobility…then maybe they won’t just take the highest offer.

Jay also advises employers to give departing employees space to be transparent about their reasons for leaving during their exit interviews.

It is important that companies actively respond to feedback by implementing new policies and making changes to avoid losing even more workers in the future.

“[The Great Resignation] really shed some light on the issues that corporate America and these companies have with how they treat their employees, how they show value and respect,” Jay says.

“So if anything, what this has done for a lot of companies has made them realize, hey, we’re slipping into those areas. We need to step up our game here.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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