In 1977, the song "Take This Job and Shove It" hit number one on the country music charts and stayed there for two weeks.
Today's workers may not know the song, but many of them are probably familiar with the sentiment. And companies are trying to keep their employees from playing their own variations on that theme.
'Mission and Culture'
Microsoft (MSFT) - Get Microsoft Corporation Report recently told staffers it intends to raise compensation. A company spokesperson for the software giant said that "people come to and stay at Microsoft because of our mission and culture, the meaning they find in the work they do, the people they work with, and how they are rewarded."
"This increased investment in our worldwide compensation reflects the ongoing commitment we have to providing a highly competitive experience for our employees," the spokesperson said.
And Microsoft is not alone when it comes to boosting employee compensation.
Amazon (AMZN) - Get Amazon.com Inc. Report raised its maximum base pay for corporate and tech workers and Google parent Alphabet (GOOGL) - Get Alphabet Inc. Report its overhauling its performance evaluation process, implementing changes that will result in increased salaries.
So what's going on here?
Well, things are getting more expensive. U.S. inflation eased modestly from the fastest pace in four decades last month, but core consumer price pressures continued to rise.
A survey last month by the human resource consulting firm Robert Half found that 60% of tech employers are increasing starting salaries to attract and hire skilled candidates, while 54% are increasing salaries or offering bonuses for current team members.
“Salaries in tech, especially for positions with extremely low unemployment rates, are continuing to go up," said Ryan Sutton, a district president with Robert Half. "Inflation and the turbulence in the market has only stabilized that workers and job seekers are going to be weighing salaries more heavily."
Sending A Signal
Sutton said that the voluntary quit rate is extremely high – meaning people in tech who left their jobs in the past might be more likely to do so again in order to get a salary boost.
"Tech companies need to be aware of this and be looking at their salary structure and making adjustments to increase retention,” he said.
Anthony Klotz, the Texas A&M professor who came up with the term the "Great Resignation," said that "from a psychological perspective, raising pay is a positive investment in employees, and it sends a signal to them that they are valued."
"Broadly speaking, employees tend to respond to such investments and signals with increased effort and loyalty in return," Klotz said. "From an economic perspective, paying higher wages increases the costs of leaving for employees. That is, when employees think about leaving, they tend to weigh up the costs and benefits of doing so."
To the extent they are fairly paid or overpaid at their job, Klotz said, "the costs of quitting will be higher, which will reduce the likelihood that they will resign."
"Pay isn’t everything when it comes to retaining employees," he said. "People leave high paying jobs and stay at low paying jobs all of the time. But pay does send a signal to employees regarding how much they are valued by their company, so it’s definitely important, especially amidst a tight labor market."
Tessa West, associate psychology professor at New York University, believes there is more to the story than just rising inflation rates.
"Companies are bleeding employees quicker now than ever before--and not just top talent but all talent," she said. "It used to be the case that you would need to throw money at your top talent to keep them happy, but now you have to throw money at all talent. "
Side Hustles & Ghosting
West said companies are giving raises because workers are in high demand and they recognize their talent, which are good reasons to give people more money.
"But I think the more interesting trend that underlies the great resignation--and the "great scramble" to retain people--is that people aren't identified with the companies they work with like they used to be," she said. "It used to be the case that you would work for one company, for thirty plus years, and stay there until it was time to get a pension. You were married to your company."
West said that not only are people changing jobs more frequently now, but many of those working for one company have a side hustle.
She cited a survey by Resume Builder that found 69% of fully-remote people have at least one side job.
"And we see this 'you don't own me' pattern emerging very early on in the job placement process," West said. "Ghosting--not showing up on the first day of the job or ignoring call backs, is insanely high. In one survey of 900 employers, 83% had been ghosted by a new hire."
West said that there plenty of signs that people aren't committed to their companies or their career paths, and aren't feeling strongly identified with the places they work.
"And without that internal motivation to want to stay," she said, "they need to be externally motivated to stay. It's a bit like paying your kid for getting good grades when they don't care about school. They hate math, so you have to motivate them to care by throwing money at them."
West said companies need to take a closer look at the psychological reasons why people are leaving--commitment and identification with a company are some the strongest predictors of staying at a job--"instead of just throwing money at the problem and assuming it's a talent issue or an inflation issue alone."