Peter Krammer
Where did everyone go, we ask? As the pandemic-induced recession fades, fewer people than expected returned to jobs they previously held.
In most parts of this country, no one can afford to live long or comfortably on unemployment. Outside of those that retired, there seems to be a simple explanation worth considering. Ask yourself, who wants to return to a job with lousy working conditions when the options are many.
A recent article from The Economist explains that many employers have increased wages and benefits in order to attract people back to work. Unfortunately, “Although the value of non-wage compensation for low-paid workers grew faster than for better-paid employees last year, the disparity in the level of provisions remains vast,” according to the January 22, 2022 article.
“Some 94% of private-sector workers in the top quartile of the income distribution have access to health insurance from their employer, compared with just 40% of workers in the bottom quartile, according to the BLS (Bureau of Labor Statistics),” the article reports. There were similar disparities for life insurance (84% v 25%), retirement benefits (90% v 44%), and paid sick leave (94% v 52%).
Creating Cultures with Purpose
Beyond the money and perks, the balance of extrinsic and intrinsic rewards matters. It’s not all about the pay. For each dollar or perk, there’s a corresponding inner need for challenge, input or recognition.
While it is true that that the smaller the intrinsic rewards, the more people want to be paid, if there are few or no intrinsic rewards, no amount of money will keep people around or lure them back.
Everyone has a purpose in their work. For most people, regardless of the color of their collar, it’s paying the mortgage, rent, car or truck loan, school for the kids, doctor visits, groceries, and whatever pleasures get them through the weekend. Work is work, that’s why they call it work.
So, when the company needs your labor but not your input, when the managers call all the shots, or if the leaders run the company even partially to the advantage of their personal stock portfolios, there is little room left for those intrinsic rewards that all of us need.
Companies that empower leaders to create a culture with purpose are the companies that did not lose workers during the pandemic. And they are the companies that will keep them the next time there is a market upset.
In a previous blog post, we wrote that the two most critical components of the hiring-retention system are culture and leadership. That must be followed up with providing a path that helps individuals achieve their individual goals and motives.
