While the fact that the COVID-19 pandemic has disrupted both the personal and professional lives of most people around the world comes as no surprise, people are left wondering if the aftershocks are here to stay for years to come. The first global pandemic in recent history has not only found the world unprepared to face it, but it may have also found it unprepared to deal with its consequences. Both the COVID-19 pandemic and the social distancing measures adopted to end it have ultimately disrupted the way people work, live, and have fun. Maybe more important, however, is the fact that they also influenced how they are paid.
According to a recent MagnifyMoney study, many American employees are still dealing with the consequences of this global event. A third of the workers questioned said they experienced a cut in their wages in 2021—still a change for the better when compared with the results of 2020. 38% of those questioned last year said they had their pay cut, and many of them did not receive compensation once the crisis ended. Now, with the global pandemic still lingering and concerns about the Omicron variant on the rise, both HR managers and workers are worried new issues could also arise.
Fighting inequality
While many workers have experienced a drop in their earnings this year, different groups have had different experiences. Just 30% of the men questioned had their pay cut in 2021, compared with 36% of the women surveyed. Like women, African Americans were also more likely to have their salary cut this year (40%), when compared to Caucasians (30%). Similarly, employees with household incomes below $35,000 were more prone to a salary reduction (42%), compared to those who make more than $100,000 (27%). With the COVID-19 pandemic now thought to have increased inequality between countries, it may come as no surprise that it has also made other inequalities worse.
Closing the race and gender gap has plagued societies, businesses, and HR specialists around the world, and the current global crisis seems to have slowed some of the previous progress. According to PayScale, the economic crisis that accompanied the COVID-19 pandemic and its social distancing measures have disrupted numerous jobs across different industries in the US. Even more, women and people of color have disproportionately faced pay cuts and unemployment during and after the emergency. HR specialists are now likely to face a market in need of urgent measures to increase diversity, equity, and inclusion.
Focusing on retention
Bringing on a new member of the staff comes with multiple costs for most businesses, but, as most HR specialists already know, employee retention is by no means an easy task. This may prove to be even more challenging now, with 24% of Americans claiming that switching jobs is the best way to increase earnings. According to CNBC, the gap between the workers who changed jobs during the pandemic and those who stayed put has widened in recent months. In June, the 12-month moving average of wage gains for job switchers was 3.8%, whereas stayers experienced a smaller increase of 3.1%. The gap widened in September, when the 12-month moving average surged to 4.3% for switchers, while stayers saw only a small increase to 3.2%.
Even more important may be the fact that applicants seem to be considerably less interested in lower-wage jobs than they were before the pandemic. Industries like loading and stocking and personal care and home health are seeing less interest from job hunters. That makes hiring in these industries particularly challenging, with HR specialists working in these sectors struggling to create interesting job postings for months. However, talent retention might be a good way of avoiding these issues, especially if working in one of the industries plagued by these problems. An empathetic approach might help HR specialists understand the issues some workers face, and provide them with benefits designed to fix them.
As US workers are still dealing with COVID-19 aftershocks, it’s up to managers and HR specialists to help them navigate through these difficult times. Cultivating healthy communication, fighting inequality, and focusing on retention are just some of the ways to do that. In some sectors, employees are now leaving their positions in greater numbers than ever before, as a way of increasing their income or gaining new benefits. HR managers who want to keep their best talent should probably fight for it with better working conditions, better policies, and great communication.
