How employees hold all the chips right now

Last year, I wrote a blog post on how the great resignation has affected markets and increased time millionaires. Global labour shortages have left companies struggling to find and keep staff. It is safe to say that we are in an employee-driven market – and they hold all the bargaining power.

But what are companies worldwide doing to fill labour gaps? A Financial Times article shows that some common responses include raising wages and increased investment in technology that allows staff to spend more time on fulfilling work. Here is what the Financial Times article goes on to say about the UK specifically:

• There were a record 1.2m job vacancies in the three months to November 2021, and more than half of businesses who reported a worker shortage stated they were unable to meet demands.
• According to the Institute for Employment Studies, a think-tank, the UK labour market is at its tightest in at least 50 years. The pandemic has converged with the UK’s departure from the EU, intensifying shortages further. However, Russell Beck at Imagine Think Do, a people strategy consultancy, says the pandemic has “amplified a trend that was already playing out”.
• An analysis by the London School of Economics of how UK businesses are responding to shortages says about a third have raised wages, and about 20 per cent are investing in new technologies.
• Shortages are also being met with pay rises in professional sectors such as banking and law. The law industry is also turning to temporary staff, following an M&A boom that has increased workload — deals worth more than $5.8tn were agreed worldwide in 2021, a 64 per cent year-on-year rise — and higher attrition rates because of factors such as exhaustion. 

With the cost of living rising in the UK, a rise in wages does not seem like a bad idea. Employers are now finding a new generation of workers – Millennials and Gen Z – who care about what their employers can do for them rather than vice versa.

To run a successful business, you need the right people. What is your company doing to hire and retain staff? We would love to hear your thoughts. The Great Resignation is affecting every market and country.