2022 Workplace Question of the Year: How Are You?

By Alexis Patterson, MS.PSY.IOP (4 min read)

According to a recent report by a global industry expert called The Conference Board, American corporations are increasing workers salaries by 3.9% in 2022, partially due to inflation and partially due to the costs of what the media has deemed as “The Great Resignation” (read more about that here). This is the largest increase in salary in almost 15 years. And while it seems that practically no one would complain about making more money, there is not a correlation between workers’ pay and productivity. In fact, when it comes to workers' happiness about getting a raise or even a promotion, one 2020 scientific study published in The Journal of Population Health suggests that the happiness and excitement from getting an increase in wage fades in about three months’ time.

Salary and raises are a very vital part of attracting top talent and keeping them with your company. Money can be a great motivator, but it isn’t the only reason a worker decides to stay at a job. When the American economy began to shut down due to the pandemic, the unemployment rate increased because of layoffs and closures. But as this is being written, the US unemployment rate is reported to be 3.9%. That’s good, isn’t it? This is where it gets confusing. The way the unemployment rate is calculated by the Bureau of Labor and statistics is complex. To compute such a rate, the government includes as part of the workforce current workers, unemployed people actively seeking jobs, and unemployed people receiving unemployed benefits. People who cannot work due to age or disability are not figured into the unemployment rate. But people who can work, but are unwilling to work, also are not figured into the unemployment rate. Thus, people who can work but, due to their unwillingness to work, are artificially deflating the estimate of the unemployment rate. In short, for the first time in American history, there are more jobs than there are people willing to work those jobs.

The pandemic has disrupted the job market in a drastically different way than other American crises. In the Great Recession of 2007 – 2009, unemployment was at 10%; there just weren’t enough jobs. The government poured $1.5 trillion through the banking industry and through the damaged economy. It took years to recover as the unemployment rate declined year after year. What makes today’s job market different is that, as the economy begins to reopen, the demand for workers continues to be historically disproportionate to the number of people who actually could work. Many people are waiting to see how the pandemic evolves. Many people (especially women) believe that childcare and schooling are just too difficult to navigate while working. Many people took advantage of retirement buyouts, which was both unexpected and unpredicted. Lastly, let’s not forget the elephant in the room: the actual virus which affected both the workforce and their caretakers, with sickness and even death.

Economists are puzzled about the impact this imbalance will have on the future of our country. Meanwhile, employers are worried about the impact this imbalance will have on the wealth of our businesses. What is known, however, is that jobseekers have choices and can negotiate better terms for themselves. They have had time to reassess their lives. It’s not called the Great Resignation by the workers, it’s called the Great Revolution, the Great Renaissance or the Great Reshuffle. Accordingly, if businesses want to stay competitive, their primary focus should be, “The Great Retention.” Indeed, a 2019 Gallup poll shows that the hypothetical cost of having employees (each making $50,000 per year) voluntarily quit a 100-person corporation is approximately up to $2.6 MILLION per year in replacement costs. That same Gallup poll showed that 51% of workers would have stayed at their jobs if their manager would have just asked them one simple question: “How are you today?”

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