In the face of an ongoing talent crunch, and The Great Resignation, a survey by Principal Financial Group is not delivering reassuring news. While there are some signs emerging that talent which has chosen to stay on the bench is beginning to put itself back in play, those additional numbers of applicants may have to be steered towards backfill hires versus net-new roles. This will constrain growth at many companies.
During August and September, the quarterly Principal Retirement Security Survey asked retirement plan participants and plan sponsors about financial behaviors and planning as well as economic sentiment. According to the survey, 12% of workers are looking to change jobs, 11% plan to retire or leave the workforce, and 11% are on the fence about staying in their job - showing 34% of workers are unsettled in their current role. Employers echoed the findings, with 81% concerned about increased competition for talent.
“The survey shows a clear picture of a labor market still in flux in large part due to shifting habits and preferences brought on by the pandemic,” said Sri Reddy, senior vice president of Retirement and Income Solutions at Principal. “This open enrollment season is an important time for employers to get the pulse of their workforce and staffing needs as they face another year of competition for talent.”
In the face of dropping confidence in the US economy, employees and prospective employees are looking at their wallets - and worrying.
The survey showed a sharp decline in economic optimism among consumers, a contrast to the first half of 2021. In the third quarter, economic optimism for the next 12 months among workers dropped to 18% from a high of 32% in Q2 - the strongest sentiment since surveying began in Q3 2020. Meanwhile, retiree optimism fell to 17% from a high of 34%.
The declines come as consumers face rising prices from inflation. Both workers and retirees noted increased spending on areas including groceries (79% for workers; 85% for retirees), gasoline (75% for workers; 74% for retirees), home repairs (52% for workers; 42% for retirees), and dining out (49% for workers, 52% for retirees). According to the survey, people are also holding off on spending on home repairs, travel, and purchasing a vehicle.
The most important retirement plan features workers consider when evaluating new job opportunities are:
“We had seen a strong rebound in optimism through the first half of this year as consumers felt more positive about the management of COVID-19 and saw strong market gains,” Reddy said. “Now, new concerns over inflation, supply chains, and the continued impact of the pandemic are beginning to weigh on many Americans.”
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