Even amid mass resignations, soaring job demand and shifting power dynamics between employers and employees that have led companies to raise pay packages and other benefits, concerns about job security remain for most workers.
“Workers have been through tremendous upheaval,” ADP chief economist Nela Richardson said on a recent CNBC Evolve Livestream. “These changes are dramatic and long-lasting.”
Richardson cites a recent ADP The survey found that only 20 percent of workers felt their jobs were safe.
This is just a byproduct of the new work environment, which is poised for further adjustments due to the looming threat of a recession and the threat of slower corporate growth, both of which are linked to fighting inflation.
Although the economy has added more than 2 million jobs this year, Nearly 40 years of high inflation is limiting the amount of money workers bring home and jeopardizing the full economic recovery from the Covid-19 crisis.
“The real concern today is inflation,” Richardson said. “The effect of inflation is that it eats away at the value of wages. … People are getting more take-home pay; it’s just not developing like it used to be.”
“Even though their wages have gone up and they’ve grown faster, all in all, the average worker in the fourth quartile [of income earners] Only make 2 bucks, less than 2 bucks [more] More than they did every hour in 2019,” Richardson said. “While people are talking about wage growth, when you think about inflation, it’s not terrific. Real wages are falling, at every income level. “
U.S. companies are expected to pay workers an average 3.4% raise in 2022, According to a January survey, more than the 2020 and 2021 salary increases. While inflation is a factor, 74% of companies say the labor market is tight.
Microsoft recently said that it will raise compensationA company spokesperson told CNBC: “The increased investment in our global compensation reflects our continued commitment to providing our employees with a highly competitive experience.”
To keep workers happy in an inflationary environment, organizations must also focus on improving worker flexibility and safety, Richardson said.
ADP’s survey shows that employees want flexible hours and greater work autonomy. Despite inflation, “our data shows that workers are willing to take pay cuts to get this flexibility,” Richardson said.
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This makes how companies bring their employees back to the office even more important. Two-thirds of the U.S. workforce would consider changing jobs if they were asked to return to the office full-time, According to ADP Staff Survey.
This flexibility is also subtle. “It’s far more important for American workers to have some flexibility in working hours than flexibility in where they work,” Richardson said.
It could also help female workers bounce back. Over 1.4 million net jobs Women have been lost since the pandemic began. Before the pandemic, women made up 46 percent of the workforce but bore 53 percent of the loss, Richardson said. To bounce back from those losses, “flexibility could be the answer,” Richardson said. “It could be a way of adjusting to the real fact that women have a larger share of household responsibilities.”
Richardson stressed that the current labor shortage also includes skill sets. “We need to start training tomorrow’s workforce to do the jobs that are needed, not today, but the jobs that are needed tomorrow,” she said. Boosting the skillset will improve job security for workers.
Despite a possible recession, organizations must make immediate changes and evolve to address the issues they face today.
“A recession is always a shadow in the closet that is possible whenever the Fed raises rates. There is always a possibility of a recession; that doesn’t necessarily mean it should be the primary concern for companies that are recession or not and have to make hiring decided,” she said.