Labor’s evolving mindset

When working just isn’t worth it

In broad economic terms, the good news is the unemployment rate in the United States is declining. It was at a COVID-induced 8.1 percent in 2020, but is projected to finish at 5.5 percent in 2021, according to The Conference Board. What’s more, The Conference Board forecasts the nation’s unemployment rate to decline to 4.1 percent in 2022, and then 3.4 percent in 2023.

But while low unemployment is a positive from a macro-economic standpoint, it creates challenges for employers by putting workers in the driver’s seat. In fact, employees have left their employers at record rates this year.

Looking ahead, a new survey’s findings indicate that this will continue for certain segments of the workforce and become more stable for others. The pandemic caused frontline, low-wage, minority and lower-level employees to consider leaving their employers at rates significantly higher than historical norms, according to a new study from Mercer titled ‘2021 Inside Employees’ Minds.’

In the United States, the pandemic has shed light on a stark divide in how different demographics experience work, the study revealed. Mercer surveyed more than 2,000 US-based employees on what has been termed “The Great Resignation.”

Labor G
Mercer is a business of Marsh McLennan, which bills itself as the world’s leading professional services firm in the areas of risk, strategy, and people, with 81,000 colleagues and annual revenue of over $19 billion. “Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being,” the company states.

Its latest study showed that attraction and retention challenges are likely to continue in certain segments of the workforce, where there is a disconnect between what employees want and what employers are offering.

“While the ‘Great Resignation’ implies a mass exodus of workers across demographics, a ‘Great Reckoning’ signifies that only particular groups of workers – those who feel their employers are not meeting their needs – are contemplating leaving their job,” Mercer noted in its study.

Only 28 percent of respondents reported they were considering leaving their current employer, which is consistent with historical patterns. Typically, about 3 in 10 workers are considering leaving at any given moment, according to Mercer. Certain groups, however, are experiencing work much differently than others. Frontline, low-wage, minority and lower-level employees are more likely to leave at much higher rates than usual.

Melissa Swift“In many organizations, frontline and lower-level employees have been underinvested in and not considered a priority,” said Melissa Swift, Mercer US Transformation Leader. “Wages have historically stagnated behind inflation as employers competed to hire these workers at the lowest possible cost,” she added. “But the pandemic has shown that this same group of workers not only kept business afloat, but were critical in keeping our nation running.”
The upshot: “Employers now need to think differently about frontline and lower-level workers and deliver a compelling value proposition that addresses their needs,” Swift emphasized.

3 Top Concerns for Employees
The survey sought to understand what employees’ top concerns are, both inside and outside of work. The findings show that, among all demographics, concerns over the Delta variant have pushed physical health to the top of the list. Second on the list is work-life balance and workload; employees say burnout is a key reason for them to consider leaving their employer, behind pay and benefits. Mental health is the third top concern across all demographics, but it is most pronounced among younger workers, women, low wage workers and Black and African American employees.

According to the survey, low-wage workers – employees making less than $60k annually – are more worried about covering monthly expenses, physical and mental health, and financial wellness (retirement and debt). Higher wage workers are most worried about their health, work/life balance, and personal fulfillment and purpose.

In the survey, women were much more likely to be low-wage workers than men (61 percent vs. 39 percent). These findings demonstrate the divide in the workforce and how employees on the lower end of the wage spectrum have quite different experiences at work and require different support to meet their individual needs.

The survey also found significant differences in the concerns of workers across ethnicity groups – for Black and African American workers in particular. Black workers rated personal safety above all other concerns, well ahead of other minority groups.

4 Goals for Employers

To help navigate the suddenly hyper-competitive labor market, Mercer urges employers to consider four key points:

• Prioritize hourly, front-line and low-wage workforces. Employers need to focus on how they can enhance the economic stability of their workforce and make frontline/hourly jobs more attractive. “Perks and other benefits won’t matter if these employees can’t address basic needs,” Mercer maintains. “Pay is one priority employers should consider, as well as other benefits that enhance the take home pay of this workforce, such as affordable healthcare and resources to enhance their financial wellness such as retirement savings programs and budgeting tools.”

• Burnout is a major issue and employees are struggling with mental health. “Offering a diverse set of wellbeing and mental health benefits will help manage a number of people risks, including employee exhaustion, rising health costs, and employee turnover,” Mercer said.

• Make sure your company is a place where Black employees feel safe, accepted, and able to be their authentic selves. “Organizations must move beyond attracting diverse talent, to ensuring their systems and structures within the organization enable them to thrive,” Mercer said, adding. “Managers who can confidently identify and stand up against workplace inequities and micro-aggressions are in the best position to increase levels of inclusion and safety.”

• Flexibility remains critical.

“With work/life balance ranking second as an employee top concern across all demographics, flexibility is a top priority and a necessity for most employees,” Mercer noted, “and employers who fail to embrace this new reality are likely to face continued challenges when it comes to attracting and retaining talent.”

Swift summarized: “Given the challenges that employees have faced on the front lines of this pandemic over the summer, and through the social unrest that we saw last year – employees are saying, in many cases due to what they are paid in low wage jobs, it’s just not worth it. And they are looking for more from their employer.”


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