Friday, January 21, 2022 by Bailey
2021 was the most interesting period to navigate in the last 30+ years. We started with expectations of a Covid solution, received the solution and then in 4th Quarter, Omicron arrived. 2021 was impacted by supply chain challenges, inflation of 6.8%, price increases, and significant changes in business approaches (one out of 7 now works virtually). Some businesses were impacted negatively (e.g., travel, entertainment, retail) and some had 10+% growth activity (e.g., leisure products, packaging, biotechnology). There were 6.8 million jobs created and salaries increased on average by 4.7%. At the end of 2021, unemployment was at a 3.9% rate.
B&B experienced an increase in confidential replacements primarily due to the need to upgrade. Additionally, we saw expansion, acquisition integrations, retirements, promotions, and replacements due to employees quitting. From the candidate viewpoint, the #1 reason for change was compensation followed by career advancement, work life balance, and concern on the wellness or leadership in their present employer. Over 50 million employees changed employment in 2021 with Q4 being the largest at 13+ million.
2022 is projected as the Year of Resignation or the Big Quit. Recent surveys by various sources state that over 40% of current exempt level employees are open minded to new employment. For the hourly, the prediction is higher. The competition for talent is ideal for value-adding candidates and a real concern for the employer. Companies are offering sign-on bonuses, training, flexibility in hours, increased benefits, free lunch and other perks to attract and retain employees. The big challenge is how does an employer build their brand and foster employee loyalty.
Key drivers for change on the negative side are:
- annual raises are less than inflation rate
- fear of getting sick
- lack of childcare and family support
- undefined career progression
- concerns on wellness of the business
- increase in personal expenses (e.g., travel)
On the positive side, drivers are:
- career progression
- 10% to 30% salary increases
- enticing reward & benefit programs
- proactive culture
- better training/skills development
- value of the role