The Great Resignation vs. The Great Upgrade vs. The Great Counteroffer

Many of us are now familiar with the term, the Great Resignation. Over four million people have quit their jobs each month since July of 2021, and over 47 million people left their jobs voluntarily in 2021—the highest ever.

Right now, job seekers seem to hold all the cards and employers of all sizes are in a war on talent. Prospective employees are seeking better treatment, better leaders, better schedules (remote/hybrid/flexibility), better benefits, and more professional development, and employers and companies are adjusting. They’re paying higher wages, offering signing bonuses, and offering flexible schedules to attract and retain talent. A growing number of companies now pay student debt benefits to keep their talent from moving to other employers.

The opportunity for workers has never been greater, and they are being rewarded for taking new roles—better roles at higher wages—which some are calling this the Great Upgrade. But why are so many people changing jobs? Many employees are realizing there could be better opportunities available elsewhere.

This costly labor shortage has resulted in another challenge: counteroffers. For years, companies have been presenting counteroffers to about half or 50% of employees who give notice and resigned. Despite providing a counteroffer, a very high number of executives lose trust in those employees and question their loyalty (some studies suggest 70-80%) and almost half of hiring managers think of counteroffers as a short-term solution.

I talked to a CFO recently, who told me his last 4-5 job offers were declined as potential candidates were offered pay increases, counteroffers ranging from 20-40% increases at their current employer. An HR Director recently shared his employee was offered a 40% pay increase at another organization. The company and HR leader decided not to counter for internal equity reasons – creating other long-term issues.

So, what should employers and companies do? Organizations must have equitable pay and benefits along with flexibility to be competitive. In a recent survey by McKinsey, companies and employers said people were leaving largely due to compensation, work life balance, and health challenges– both physical and mental. Employees on the other hand, said they left due to not feeling valued by the organization, not valued by the manager, and not having a sense of family or belonging. Employees are looking for a great culture, real open and honest communication, and the ability to make an impact. In order to retain talent and stay competitive in a job seekers market, companies need to start thinking about employees’ needs and putting their people first.

Mark Mueller

Mark is a seasoned business executive with more than 25 years of experience. He has a strong background in financial and business operations management with a passion for business results, leadership, and achieving goals in a collaborative team environment. Mark personally leverages his Gallup Strengths: Context, Harmony, Achiever, Responsibility, and Consistency. Mark is excited to bring you the Aureus Group portfolio of staffing/recruiting programs including project staffing, direct hire, interim executives, and retained search. Mark has a bachelor’s degree in Finance and Business Administration from Loras College in Dubuque, IA. Mark also earned an MBA from the University of Rochester William E Simon School of Business located in Rochester, NY.

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