Anyone seeking an illustration of the labor challenges that organizations face needs to look no further than the recent “Great Resignation.”
In November 2021, 4.5 million Americans quit their jobs. The Bureau of Labor Statistics called it “an all-time high.” The number represented 3 percent of the non-farm workforce, according to the BLS.
The number came atop 4.4. million quitting in September. Since April 2021, more than a fifth of the total U.S. workforce left their positions.
The numbers are jaw-dropping. The “whys” are a matter of broad research and speculation. Pundits have filled hours of broadcast airtime with explanations.
Here’s what’s clear: Workers are on the move … and employers who don’t pay heed could find themselves with no one to staff, power, or guide the ship.
Employees seek greener pastures. They believe more opportunities, maybe coupled with better working conditions, lie elsewhere. Yet how do they define these?
Myriad studies of employees’ priorities have been conducted in recent decades. In every survey, pay always ranks at or near the top. It’s a constant that never wavers.
Employers who pay good wages, coupled with a reasonable measure of job security (to keep paychecks coming), are likely positioned to suffer least from the trend of rampant turnover.
Our last post explained how, during the height of the pandemic, companies with employee stock ownership plans (ESOPs) were far less likely to cut workers’ wages. Just more than a quarter of ESOP companies reduced pay, according to a 2020 study conducted by Rutgers University and the SSRS survey firm.
Compare this to nearly 60 percent of non-ESOP firms who did cut pay, according to the study. This doesn’t even account for widespread layoffs that hit concurrently – and where, yet again, ESOP operations looked out for employees’ well-being.
Still, many firms cut hours during the pandemic. What good is maintaining a wage, if it’s paid for fewer hours? Isn’t the outcome less money overall?
ESOP Companies Win Again
Majority ESOP operations “were significantly less likely to cut employee hours, and in instances where ESOPs did reduce employee hours, those reductions affected fewer numbers of employees,” the Rutgers/SSRS study states.
Just over a third (35.5%) of majority ESOP companies cut workers’ hours. Nearly two-thirds (62.9%) of other companies did so. Again, a stark difference.
“From an economic perspective, ESOPs kept considerably more money in employees’ hands – and in the economy – than non-ESOPs,” the study concludes.
What is an ESOP? The answers could include an organization that is far more likely to offer stable working hours, reliable pay, and much greater job security. Think this might be a timely incentive for employees to stick around … rather than joining the millions of fellow workers resigning their positions?
If your answer is “yes,” take the first step toward becoming an ESOP company. Contact Excel Legacy Group to learn how to take control of the fate of your organization and its employees … rather than being resigned to it.