One of the most common sources of anxiety in the world of work is asking your boss for a raise or promotion. Many are hesitant to ask for things, especially money, because it feels uncomfortable and there’s a power dynamic. “Will I upset the employer I depend upon by asking for more?”
Employees Today Wield More Power
However, the Great Resignation has shifted this dynamic considerably. As companies continue to struggle to find workers, employees have increasing options for alternative employment, and employers are desperate to find and retain virtually anyone to fill their ranks. This has led to a powerful bargaining strategy for workers looking to increase their compensation: Threaten to take a new, better-paying job.
This doesn’t mean an empty threat like “I could find a better job in a heartbeat if I tried to!” But it does mean that employees who have applied to available positions, gone through the interview process, and received a job offer with greater pay and/or benefits have leverage with their current employer.
And They Know It
Employees are very confident in the leverage this will afford them. According to a March 28 article from ZipRecruiter, “54% of employed job seekers think their current employer will ask them to stay and make a counteroffer if they resign, up from 47% in February and 43% in January.” After all, what options do their employers have when employees come to them with a new job offer in hand and threatening resignation? Employers can let these workers leave, offer more pay, or try to negotiate to get them to stay at their current pay. This might mean appealing to virtues of loyalty or stability in employment, for example.
But at the end of the day, the ability to find better pay elsewhere is tremendous leverage for workers and has contributed to widespread wage gains for many.
As the Great Resignation continues, employers should expect more workers to threaten to take new job offers if they don’t receive significant compensation increases. Whether employers have the ability or willingness to match or exceed another company’s offer will necessarily depend on individual circumstances.
Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.