By now you have probably heard all you care to hear about the Great Resignation. As a business owner, you are ready to move on. But before you do, there are two things you should probably consider carefully. The first is job security. The second is the so call ‘loyalty tax’ created by the Great Resignation. Both are likely to affect your business in one way or another.
As a general agency serving thousands of benefits brokers and representing more than one hundred carriers, Dallas-based Benefit Mall says the Great Resignation has reshaped America’s employment landscape. Among the many changes it has ushered in is a greater willingness among workers to leave their jobs in search of greener pastures.
The job security an employer offers can influence whether its workers start thinking about leaving to go elsewhere. Likewise, addressing the loyalty tax plays a role in retaining employees who might be influenced to jump ship after being left hanging by peers who have already gone elsewhere.
Job Security as a Benefit
In terms of job security, Benefit Mall points to a recent Bloomberg article that suggest employers start looking at it as an employee benefit. Considering job security as part and parcel with more traditional benefits, like health insurance and retirement plans, puts things in a new perspective. Remember that modern employees expect benefits with nearly any job.
At a time when the Great Resignation mindset remains alive and well, employees who do not feel as though their jobs are secure have a reason to look elsewhere. This is bad for some types of companies that tend to have higher turnover rates. It is also bad for startups in the sense that dissatisfied employees looking for new positions might steer away from companies with very little history behind them.
What does all this mean to you as an employer? Simply put, your employees are less likely to look for greener pastures if you demonstrate your loyalty to them. One way you can do that is to assure them of job security. Obviously, there are never any guarantees in business. But you can demonstrate that your company is in good health, that it is growing, and that their jobs will be secure for a long time coming.
Addressing the Loyalty Tax
Moving on to the loyalty tax, it might be something with which you are not familiar. The loyalty tax is essentially a loss of pay experienced by an employee who decides to stay put. Think of it this way. The vast majority of employees who took advantage of the Great Resignation to find new jobs ended up getting a raise as a result. The peers they left behind were not only saddled with more work, but they also were not likely to get a pay raise. So by staying put, they actually lost money.
In theory, this particular problem is an easy one to solve. In practice, not so much. Companies hit hard by the Great Resignation should at least look into the possibility of compensating employees who stay on.
If the financials allow for it, companies would be wise to find out what the competition is paying and raise salaries accordingly. Matching those higher salaries gives employees one less reason to consider going elsewhere. Higher pay may not be the only solution, but it is one of them.
Job security and the loyalty tax should matter to employers in 2023 because both affect a company’s ability to hire and retain. Offering job security and loyalty tax relief encourages employees to not jump ship. Combined with other incentives, they can work wonders.