What is Quiet Quitting, and why are employees doing it
Quiet quitting occurs when an employee abandons the effort to go above and beyond work expectations and only performs the minimum essential requirements of their job.
Employees assert their control and choice and begin setting boundaries and refuse to do work outside work hours. They shift priority towards focusing on maintaining their health, well-being, relationships, and activities outside of work.
Social Media and Quiet Quitting
Most recently, quiet quitting has been given a label and has become more dominant. Quiet quitting has dominated social media, primarily on Tik Tok. Millennials and generation z have been actively posting videos on the topic, and several of them have become viral, which has triggered a lot of commotion.
Economic Impact
There is currently a tight labor market. Employees may feel like it’s easy to obtain alternative employment; therefore they have the power to renegotiate the terms of their employment contract.
Impact on Employers
Other states, including New York, Colorado, and Washington, have moved towards requiring employers to disclose the pay scale within their job listings. California is now setting a groundbreaking precedent by adding an additional layer of transparency. California is the first jurisdiction to require employers to distribute payroll data based on the demographics of the organization. This new requirement intends to address pay equity and ensure no pay disparities.
Steps Employers Can Take to Combat Quiet Quitting
Employees are redefining work, and companies can begin to understand and reassess their current workplace practices or continue to see more turnover and decreased productivity. Quiet quitters have left employers no option but to take what employees say more seriously and assess why they are resigning or quietly quitting their jobs.
Address Employee Burnout
Employees who feel overworked or not valued can become burned out, leading them to quit or leave the workplace quietly.
Creating a reasonable amount of work for them to complete is key to setting them up for success so that they are set up for success. Review their performance and productivity levels regularly, and if they start to slip, ask how you can help.
Offering paid time off and creating a culture to encourage employees to take it is another way to reduce burnout. This will allow your employees time to recharge and come back more productive than ever.
Bring Back Personnel Connections
Your employees naturally want to feel connected, and a lack of connection can affect your employee’s well-being, productivity, and retention.
Establish a pattern of touching base with employees at least regularly and ask how they are doing and how you can help.
Initiate Team Building Activities
Team building activities can be fun and encourage open communication, build stronger relationships, and build trust.
Don’t know where to start? Host a brainstorming session, encourage employees to participate in a fitness challenge, or host a virtual happy hour.
Show appreciation
Every employee wants to feel appreciated for their hard work. In addition, appreciation can generate confidence and enthusiasm for the work they do. Show appreciation for the great work that your employees have done. It could be something as simple as verbally expressing gratitude or you can take a step further and delegate an award such as extra time off.
Increase Flexibility
Flexible is in high demand. Providing flexible work could lead your staff to have higher job satisfaction and productivity which in turn could benefit your organization.
There are many forms of flexible work including telework, job sharing, condensed schedule, and part-time employment.
Several employers worry that their staff will underperform with a flexible schedule. To ensure that your staff is meeting expectations, set deadlines and regularly check in with them.
In conclusion, quiet quitting is a complex issue requiring individual and organizational attention. Organizations can foster a more engaged and productive workforce by understanding the reasons behind quiet quitting, recognizing its consequences, and implementing proactive strategies to prevent it. Through effective leadership and a commitment to creating a positive work environment, the prevalence of quiet quitting can be reduced, leading to increased job satisfaction and overall organizational success.
New Rules on How Employers Manage Their Compensation Program
As employees begin questioning their pay, while pay transparency continues to grow in popularity, employers are scrambling to defend their pay practices.
Salary information is becoming more available formally, through legislation, and informally, through social media posts. Employees now have the valuable information to leverage conversations with their managers and challenge current compensation.
CA Equal Pay Act – Employers cannot ask about the previous salary and must disclose pay ranges if asked during an interview
CO Equal Pay for Equal Work – Employers must include salary ranges and benefits information in every job posting as well as disclose promotion opportunities and keep track of job descriptions
NY – Employers must post maximums and minimums on all job postings or promotions by November 2022 (extended from May 15th)
More casually, there is a societal shift to make salary information less taboo. Coworkers are no longer ashamed of sharing how much they make in the company. A poll conducted in 2022 by YouGov Plc found that of their sample of 2,500 adults, 42% of Gen Z workers, ages 18-25, and 40% of millennial employees, ages 26-41, have shared their salary information with a coworker or other professional contact.
Many companies are not prepared to discuss the warrants for current salary ranges and are left with unhappy employees who still have pay concerns. Payscale has reported that employees are 50% more likely to leave if they think they are being paid below market, even if they aren’t. Some 57% of people paid at the standard market level believe they are underpaid, and 42% of those paid above the market think they are underpaid. This highlights the value of a compensation study where you can provide employees the ease of mind that they are being compensated based on their talent and skills in a competitive organization.
As employees begin questioning their pay, while pay transparency continues to grow in popularity, employers are scrambling to defend their pay practices.
Salary information is becoming more available both formally, through legislation, and informally, through social media posts. Employees now have the valuable information they need to leverage conversations with their managers and challenge current compensation.
CA Equal Pay Act – Employers cannot ask about the previous salary and must disclose pay ranges if asked during an interview
CO Equal Pay for Equal Work – Employers must include salary ranges and benefits information in every job posting as well as disclose promotion opportunities and keep track of job descriptions
NY – Employers must post maximums and minimums on all job postings or promotions by November 2022 (extended from May 15th)
More casually, there is a societal shift to make salary information less taboo. Coworkers are no longer ashamed of sharing how much they make in the company. A poll conducted in 2022 by YouGov Plc found that of their sample of 2,500 adults, 42% of Gen Z workers, ages 18-25, and 40% of millennial employees, ages 26-41, have shared their salary information with a coworker or other professional contact.
Many companies are not prepared to discuss the warrants for current salary ranges and are left with unhappy employees who still have pay concerns. Payscale has reported that employees are 50% more likely to leave if they think they are being paid below market, even if they aren’t. Some 57% of people paid at the standard market level believe they are underpaid, and 42% of those paid above the market think they are underpaid. This highlights the value of a compensation study where you can provide employees the ease of mind that they are being compensated based on their talent and skills in a competitive organization.
Benefits Trends
Total compensation is more than just cash; it’s the entire package that includes benefits available for employees based on budget. Companies are getting creative to make sure their employees perceive a good work/life balance. With changes in work models, like remote or hybrid arrangements, we are also seeing more companies jumping on the trend to offer unlimited time off.
The United States is the only developed country with no federal law requiring employers to offer paid holidays to employees. But companies are still trending to achieve work-life balance through this new perk: Unlimited Paid Time Off. While this is a debated topic, with people worried that this may be a trap to keep people constantly thinking about work, a recent study shows that 82% of employees that have unlimited PTO have the best rates of work-life balance. Competitive PTO (limited or unlimited) is more than just a mechanism to attract and retain top talent. These packages make business sense, especially for companies prioritizing innovation where we are looked at as a model to set expectations for productivity. To do good work, people must take care of themselves. Recovery is a lifestyle practice making its way into industries where creation and innovation are the organization’s backbones.
If you’re looking to expand your benefits program, we welcome you to get inspiration from the list below for the most popular benefits and perks to include in your plan. We have compiled these options for you to consider as you continue to build your employee engagement.
Consider These Benefits Trends:
Flextime and Work-at-Home Options
Flexible holidays
Commuter Assistance
Performance Bonus
Vacation reimbursement: one-time bonus to use while taking time off
Healthy Cafeterias and Snack Machines
Home Office Stipend
In-office Career Development
Wellness Facilities and Support
Annual Learning Stipends for participating in industry certifications, seminars, or classes
Generous Parental and Caregiver Leave
Volunteer Time Exchange
Free Desktop Music
Personal Care Services – Bring in a stylist once a month for haircuts or try dry cleaning drop off
Discounted Access to Company Products/Services
Stock/Stock Options/Equity
Gym membership
Insurance coverage for you and your dependents
Affirmative Action Planning
With federal and state agencies prioritizing pay equity, you must identify, study, and address potential areas of vulnerability and help your pay system achieve your goals for equity, competitiveness, and compliance. This Risk Analysis is a report designed to provide clients a gateway to viewing potential pay equity liabilities across multiple tiers by leveraging comparisons by job title, job group, experience or seniority, and EEO category.
In our efforts to help organizations achieve pay equity and move closer to establishing equal pay for equal work, Blue Whale has launched Blue Whale AAP. Our Affirmative Action Planning supports government contractors and any business that wants them as a customer to stay in compliance with federal regulations easily.
This methodological process starts with data cleansing and your workforce activity data reconciliation. From this, we plan development, data system coding, reporting, and monitoring your hiring, promotion, and termination practices. Next, we develop an Adverse Impact Analysis to do potential bias testing in your HR practices to ensure we have the most accurate narrative.
Pay Transparency and Minimum Wage Increases: Are You Prepare to Meet the New Challenges?
If You Post A Job, You Must Post A Salary Scale
Starting in May and following a national trend in other major U.S. cities, New York City’s employers will be required to post salary ranges in their job postings. The law exempts temporary staffing firms as they provide this information to potential candidates. The legislation, meant to help correct pay inequities and discrimination, will make it unlawful not to include in job listings the minimum and maximum salary offered for any job in New York City. The range for the listed maximum and minimum salary would extend from the lowest to the highest salary that the employer, in good faith, believes it would pay for the advertised job, promotion, or transfer. Other municipalities are likely to follow as the law is a more significant trend toward pay transparency.
Pay Equity Efforts in the Public Sector Suffers a Setback
In a setback to proponents of workforce progressive policies, a law requiring board quotas from publicly traded companies with HQs in CA was declared unconstitutional. The law, Assembly Bill 979, signed in 2020 by Gov. Gavin Newson, set forth to increase boards’ composition by requiring publicly traded companies to have board members from underrepresented communities, including people of several races and ethnic groups and people who identify as gay, lesbian, bisexual or transgender. Proponents of the law argued that adding underrepresented groups to the board would aid racial and justice equality in the workplace. However, Judicial Watch, a D.C. nonprofit conservative advocacy group, filed a lawsuit in 2020, arguing the law’s racial, ethnic, sexual preference and gender-based quotas violated the state’s constitution’s equal protection clause. In response, Los Angeles County Superior Court Judge Terry Green ruled that the law violated the state constitution.
Gender Pay Equity – Trending in the Wrong Direction
An initial analysis of proxy compensation disclosure by Equilar, a firm specializing in data-driven solutions for business development, board recruiting, and executive compensation, suggests that gender pay gaps increased in 2021, and in doing so, the gains recorded in 2019 and 2020 have essentially disappeared. According to an initial review of proxy statements relative to 2021, the median pay for women CEOs in the Equilar 500 was $11.8 million, or 18% lower than the median $14.5 million awarded to men. The initial figures seem to follow a two-year compensation difference between men and women. In reviewing past proxy information by gender, data suggests that the average pay for women went from $12.2 million in 2019 to $11.8. The average compensation for men has moved from $12.2 to $14.5 million for the exact period. Even though public and private companies work to adopt pay equity policies, the conversation around gender equity will likely grow louder. Also, this may activate boards and regulatory agencies for measures to minimize the gains achieved in the last few years.
Minimum Wage To Increase, Again, In Parts of Los Angles County
In time for most companies’ budgeting season, companies in the unincorporated part of Los Angeles County and the City of Los Angeles will need to manage another new round of increases to their minimum wage scale. The minimum wage in unincorporated LA County will be increasing from $15.00 to $15.96 per hour on July 1, 2022. The ordinance applies to employees who work at least two hours a week within unincorporated areas of Los Angeles County. The minimum wage in the City of Los Angeles will increase from $15 to $16.04. The wage scalation index, tied to consumer prices, and part of the City’s effort to curb poverty, has spiked considerably over the last few months, pushing the City to boost hourly rates above those in the County. This latest increase is a continuation of the annual increases that began in 2016 and now apply to all employers regardless of employee count. The minimum wage will continue to increase each year on July 1 based on the Consumer Price Index for Urban Wage Earners and Clerical Workers.
Is 2022 the best year to reset your compensation program? Absolutely.
To prepare you for this year, Blue Whale Compensation has compiled a series of measures that can help companies best manage their labor and talent needs.
We are living through a historical shift in the workplace with rising wages and inflation. At no other time in recent history has compensation taken a front seat as a means that companies can use to retain, engage, and attract new talent. A compensation strategy, however, should not be confused with solely giving employees aggressive increases. In fact, unwarranted increases with no other plan are likely to make issues worse.
The plan needs to be based on a comprehensive analysis of budgets, labor needs, current talent needs, future talent needs, and basic compensation planning.
A Market Analysis is a Must
Carefully examine market levels and set appropriate salary benchmarks. Based on that information, consider market adjustments. Market adjustments should generally be no higher than 2%. If more severe market adjustments are needed, consider another round of market adjustment increases in 12 months. When setting the market, consider that 2022 is not the year to be noncompetitive. Along with inflation eating away any substantial wage gains, recent surveys indicate that most employers a setting salary increases about their 2022 projections; in addition, about half of companies are actively implementing market adjustments to employees who are under competitive market pay.
Merit-Base and Market-Driven Increases based on Performance
If you have ranges and midpoints, combine your performance management information with an employee’s market position. By using a merit-driven grid, you can justify larger, above-average increases to high-performing, underpaid employees. Conversely, the matrix helps you develop a policy to slow down salaries that are way above market midpoints.
Mine your employee data and identify the employee population that is most at risk of leaving your company. Use your compa-ratios! Employees with the lowest compa-ratios are twice as likely to be looking for employment. Review your employee population via existing interview data: what departments, units, or types of employees are leaving at a faster pace and what trends can you derive from their exit interviews?
Closely examine your labor stats and compare them to specific benchmarks. For example, voluntary turnover rates are trending between 10% and 17%. Are your higher or lower? Employee tenure is another key barometer to measure at-risk groups. Employees who have more than four years with a company as twice as likely to stay with the company for another three to four years. Employees who have less than two years are twice as likely to be looking for another job. In addition to critical stats, check data from your employee opinion or engagement surveys. They often contain valuable information that can help you identify at-risk employee populations.
Implement a Basic Compensation Plan with Guidelines, Grades, and Ranges
The rapid movement in wages that are likely to be experienced in 2022 most likely will subside in 2023. It is, therefore, very important that beyond immediate increases, you carefully look ahead and implement basic compensation management guidelines. This includes grades based on job leveling; ranges reflecting reasonable hiring salaries; policies addressing promotions, demotions; and most importantly, a basic outline of your company’s compensation philosophy.
Over the last few years, AI-driven solutions have come into the marketplace with innovative technologies that have simplified the often complex and disliked world of performance management tools. Many tools exist to offset the great challenges companies have with their existing program. Most app-based solutions tend to be affordable, flexible, and easy to deploy.
Recalibrate Your Pension Vesting Provisions and Enhanced Your Time-Off Policies
As employee tenure decreases, employers may want to re-think the existing model of pension benefits vs. time-off benefits. For example, most employers allow an employee to join their 401k plan in less than six months. Less than 30% wait a full year to allow them to join. If your retention and data show a pattern of employees decreasing tenure, then, employers may want to extend the waiting time before an employee signs and increase the vesting from three to five years. This needs careful consideration as 401K is a premium recruiting vehicle and care should be exercised to dilute the recruiting value that your current company offers. However, for companies that shift pension costs, to additional flexible some of the cost to enhanced time-off policies.
Consider Bonus for High Paid Employees, Not Increases
For high-paying employees versus additional salary, examine the market, and follow the following strategic budget: For employees over the midpoint, offer them a one-time bonus; for employees under the midpoint, add to their base. Over time, this strategy will keep your costs even with the market and you can target at-risk employees, and perhaps even keep them.
Selling your Plan
The biggest challenge in resetting your compensation program should not be illustrating the company can be more productive, efficient, and ahead of the curb in the long run. The biggest challenge is bringing the organization the information they need – from your C level to your middle management, and all the way to employees. This requires a significant public relations effort – one that cultivates the needs of the organization not only for the immediate future but for long-term success.
Is Job Hopping Here to Stay?
It used to be that most employees would stay in a position on average of four to six years. That is no longer the case. The fact is that most employees are no longer considering long-term employment with your company.
The leaders of the job-hopping movement are, to no surprise, millennials. They are now aptly called the “job-hopping generation” because they display a significantly higher willingness to switch careers than previous generations. The long-tenured career employee is essentially over.
Employee mobility with employment options, and the opportunity to get more money with the next move, have resulted in decreasing employee tenure. Social media is saturated with narratives about getting a 20% increase by going to a new company. The fact is that strategy works for people. In previous years, job jumping was frowned on – now, that tactic is part of the challenges that employers must seriously account for.
Given that employees are less likely to stay with your company for a long period, you need to develop shorter and more impactful training procedures to make up for time lost in the hiring process. Shorter employment also makes companies question their pension and retirement benefits. Instead of benefit and tenure keeping in immediately waiting 6 to 12 months longer and increasing vesting provisions from 3 to five years.
Hire Part-Time Employees to Fill the Labor Gap
One driver of the current resignation wave is that employees are looking to shift their work schedule and work with more flexible work type arrangements. Often, even a full-time WFH arrangement is not enough. Employees are also looking for a shorter, flexible work schedule. Part-time employment may be an option for them and many employers.
Beyond the cost economics – which may help the employer – part-time employees often have the experience and the technical agility that employers often require from new employees. Given the new dynamics in work arrangements, part-time employees, when properly structured, can add the stability that the current environment lacks. Managers will be key. Managers can resist the perception that part-time employees are supplemental and not worthy of long-term investment in terms of training to development. HR must bring considerable company culture efforts to show how part-time employees can be more than a short-term for the organization. Employees now place a high value on the ability to control their work/life balance, so they are likely to appreciate the opportunity to earn income while being able to accommodate to their lifestyle.
High Demand for Interns Expected in 2022
Intern season is coming up! A well-managed internship program is a great way to identify potential long-term talent against the wave of resignations. If you have been on the fence about hiring interns, this may be the year for you to jump into developing an internship program. A properly vetted internship program offers a variety of solutions that can quickly fill the labor gaps most employers are experiencing.
Hiring interns is a great way to get specific skill-based labor that can support critical key functions and relieve areas with entry-level support. A good program should also be able to help you identify potential long-term talent. If you target and recruit specific skill sets, you may be able to bring some support to key projects that might be stuck due to a lack of resources.
Most of the jobs that are being lost, besides retail and health, are office administrative classifications where minimum wages have not kept up with inflation. That means interns and part-time employees could provide much-needed relief during the late spring and summer months.
