This year may see a new wave of "quiet quitting" due to lagging raises and mass layoffs

People are less likely to quit because of the souring economy, but they may end up quitting quietly.

‍

Compared to the year prior, voluntary turnover decreased from 36% to 25% in 2022, perhaps due to people's concern about a potential recession and layoffs, according to Payscale's report on Compensation Best Practices for 2023. A survey was conducted between October and December 2022 among nearly 5,000 compensation professionals, human resource leaders, and business executives in order to compile the report.

‍

Payscale experts said in a press call held last week with reporters that when it comes to quitting, the rate is still significantly higher than the desirable 10% turnover rate, which is welcome news for employers who have scrambled to recruit and retain talent during the Covid economic recovery. 

‍

It is still a formidable task for managers to figure out ways to keep their employees from walking out the door if they have to replace one in four of them. Payscale's report states that the most common reason people quit their jobs is the pay, especially in an inflationary environment, followed by limiting opportunities for advancement, according to most employers.

‍

Employers are hoping that by offering workers a little bit more money, they will entice them to stay with them. A majority of workers, 56%, say they will be raising their pay by at least 3% this year, up from 53% last year and 36% in 2021, according to Payscale. As for salary increases, it is anticipated that they will range between 4% and 5% in 2022, whereas most raises in 2022 were above the 5% range, according to Lexi Clarke, Payscale's vice president of human resources.

‍

Inflation, which stood at 6.4% as of January, will do little to offset those planned raises.

‍

Quiet quitting isn't going anywhere

A small raise might not be enough to keep people from quitting their jobs, the buzzword that will be polarizing in 2022, which refers to not going above and beyond in your job anymore.

‍

In a survey by Payscale, 55% of employers aren’t concerned about quiet quitting, with managers saying the term is “mislabeled work-life balance” and that as long as employees do the work they were hired for and meet their manager’s requirements, it is not ‘quitting’ in any sense.

‍

Despite this, 29% of leaders believe employees who fail to go above and beyond risk being fired if found to be underperforming.

‍

“Those who cannot offer robust raises and promotions to their employees, or who are preparing for layoffs, should take the phenomenon more seriously,” Clarke says, especially in an environment of continual challenges in the labor market.

‍

“There are no signs that quiet quitting is going away in 2023, especially if we are in a recessionary environment which causes more layoffs,” she told reporters in a press conference. "Letting go of workers can lead to burnout or create a burden on people who remain in the organization."

‍

There are two possible outcomes of this approach: burnout and resentment. "Especially if we think about a work environment without pay raises or promotions," she says.

‍

Quiet quitting can be seen as a reflection of engagement on part of the employee, and in turn, productivity on the part of the employer, which can falter when rewards are not forthcoming for employees during challenging times, according to the expert.

‍

“It's really a matter of engagement, in the sense that we need to think about what employees are looking for and how they set boundaries for themselves," she says. “It’s not going anywhere.”

‍

Bosses hope new benefits will outweigh lackluster pay

It is not only paid that companies are striving to keep their workers, but they are also trying to stay at the forefront in terms of benefits that will keep and attract them as well. A growing number of businesses are investing more in mental health and wellness programs, paid sabbaticals, and extended family leave benefits to improve the well-being of their employees.

‍

According to a study published by the Human Resources Management Association, firms are also striving to push the boundaries when it comes to workplace flexibility: For the first time last year, close to 10% of companies offered a 4-day workweek benefit.

‍

“Employees are seeking flexibility,” explains Payscale pay equity analyst, Susan Thomas, “potentially as they continue to experience a decline in real wages growth [and] see themselves which is leading to longer workweeks, they are seeking some level of return.”

‍