A recession is on the horizon. Inflation has sky-rocketed in the world’s biggest economies – it reached forty-year highs in the US, France and the UK, while German inflation reached an all-time high of 10%.
This has triggered a cost of living crisis and making individuals worried about being able to make ends meet. As a result, workers are reconsidering their options and looking for ways to make extra money.
77% of UK workers and 64% of US workers say it is harder to pay living expenses now than it was a year ago, according to research by Qualtrics. The situation is the same in France (62%) and Germany (63%).
This is pushing workers to seek opportunities to work overtime or extra shifts – 57% in the US, 77% in the UK, 91% France and 79% Germany.
Beyond that, many are looking for a second job, while others are keen for a new job altogether. In the UK, 35% are looking for jobs with hiring salaries and 34% are looking for a second job – this compares to 37% looking for more pay and 38% for a second job in the US.
Qualtrics also surveyed workers in France and Germany and found that 22% in France and 30% in Germany are seeking a second job, while 30% in France and 24% in Germany want a higher paid job.
Working parents are being particularly impacted – in the UK, 44% are looking for a new, higher paying job; the figure is 43% for the US, 29% in Germany and 33% in France. These figures are consistently higher than those for employees without children.
Supporting workers in a recession
These statistics show that while employees want extra money – and they are prepared to work longer hours to get it – many would actually prefer a pay rise in their current job.
But workers are aware this is unlikely – company budgets are also being impacted by the cost of living crisis – and they know that the best way to get a wage increase is by getting a new job.
Therefore, despite the recession, workers are willing to take the risk and look for a new job. This is confirmed by data from the likes of the US Bureau of Labor Statistics that show that the quit rate remains above 4 million a month.
Employers need to take this very seriously, they may not be able to hike salaries, but they should definitely not do nothing.
Qualtrics chief workplace psychologist Dr Benjamin Granger commented: “With budgets tightening, workers are searching for ways to meet the rising cost of living, including finding new jobs.
“Employee turnover is a huge cost for companies, so it’s business critical for organizations to understand which of their employees are likely to leave and why, so they can make adjustments to reduce attrition and retain key performers.”
But beyond pay rises, what adjustments could employers make?
The answer will vary for different organizations, so the main thing to do is listen to employees and their worries and finding out what support they need.
Qualtrics’ director of employee experience product science Sarah Marrs tells UNLEASH: “Starting conversations – perhaps difficult ones – about what employees want from their career and need financially. It may pay off through this challenging period.”
With working parents particularly struggling to make ends meet (especially in the run up to Christmas) maybe there are specific ways, beyond a pay hike, that employers can ease these pressures.
A bonus might help, discounts for groceries or childcare, or investment in financial wellbeing programs to help employees manage their money better are all good solutions.
Ultimately, employers need to show they care, and that there are benefits to employees of staying in the same company, even if it won’t lead to a pay rise.
The International Festival of HR is back! Discover amazing speakers at UNLEASH America on 26-27 April 2023.
Sign up to the UNLEASH Newsletter
Get the Editor’s picks of the week delivered straight to your inbox!