Companies Are Pulling Out All the Stops for New Hires — But What Do Existing Employees Get?
In the wake of the Great Resignation, employers across America are trying to walk a fine line between attracting new talent and keeping the workers they already have, according to a study by management consulting firm McKinsey and Company.
The McKinsey report referred to the desired outcome as the creation of a “sticky workplace” where employers could attract new hires — or win back employees who left — and get them to stay.
Those who succeeded in adding some adhesive to their workplaces had one thing in common: They sweetened the bait on the hook while making sure current employees shared in the bounty being offered to new recruits.
Here are a few examples of how it’s playing out in real life.
Juicy sign-on bonuses were one of the biggest trends to come out of the Great Resignation and the employee-centric labor market of 2021. Companies from Hilton Hotels to McDonald’s were paying qualified candidates hundreds or even thousands of dollars just to sign on. But, when newbies walk through the door with fat pockets, resentment is sure to swell among the ranks who already have paid their dues but have not been paid bonuses.
While it’s not exactly practical for employers to hand over fat envelopes of cash to existing employees just to match bonuses doled out to new hires, many companies found a happy medium in the form of referral bonuses, which can satiate the existing ranks while bolstering recruitment strategy.
- Chipotle announced $200 referral bonuses for crew members and $750 bonuses for managers and apprentices who referred new hires.
- General Dynamics launched a program that offers existing employees between $3,000 and $15,000 for external referrals.
- Salesforce — which hires more than half of its employees through referrals, according to Fortune — pays a cash bonus of $2,000 for every successful referral.
Current Workers Gain When Bosses Boost Health Benefits for New Hires
Instead of a fistful of bonus cash up front, some companies lured new hires by beefing up health benefits — and, in most cases, existing employees reaped the rewards, too.
Target, for example, announced a $300 million expansion of its healthcare package for new workers that is taking effect in April. But new recruits aren’t the only ones enjoying the benefits.
All hourly workers will have a shorter waiting period to enroll in health benefits, which mostly benefits recent hires, but team members working as little as 25 hours per week will now be eligible to enroll. Down from 30 hours, that adds about 20% of the workforce to the rolls.
The plans got better, too, and now cover things such as fertility benefits and doula reimbursement, acupuncture and virtual physical therapy for all employees who enroll.
Workers Always Welcome Higher Salaries
Imaginative benefits and creative perks have made headlines as newly empowered job seekers come to expect more and more from the companies they’re considering. The one incentive that still stands out above all the rest, however, is also the simplest: higher wages. And higher wages are one tide that tends to lift all boats.
Here’s a partial list of employers whose existing workers got raises when the companies increased pay to draw new talent, according to the Society for Human Resource Management:
- Costco: Jumped from $15 an hour in 2019 to $16 during the pandemic, and today more than half of the company’s workers earn more than $25.
- Amazon: Four years after Amazon raised its minimum wage to $15 an hour, it increased its average hourly wage to $18.
- Walmart: In 2021, the country’s largest employer — Amazon is No. 2 behind Walmart — increased its minimum wage from $11 to $12, giving a raise to more than half a million hourly workers.
- Chipotle: Chipotle’s average hourly wage jumped to $15 when it increased its starting pay rage to $11 to $18.
- CVS: CVS already had boosted its minimum pay from $11 to $13 before announcing that all workers would earn at least $15 starting in July.
- Bank of America: BOA raised its starting wage to $21 an hour in 2021, with plans to increase it to $25 by 2025. Also, BOA announced it won’t work with vendors who pay their own employees less than $15.
- Starbucks: The coffee giant increased its barista pay to $12 last year, with a promise to increase its minimum wage to $15 for all employees within three years.
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