A wave of resignations is sweeping through countries around the world, as people try to make sense of what has just happened to their lives because of the COVID-19 pandemic.
More than a 15 million Americans have already quit their jobs since April 2021. Some say 25% of the women workforce are thinking about leaving their jobs, while 40% of the global workforce is looking to change their jobs.
In this blog, we will be explaining the reasons why so many skilled workers are quitting their jobs and what can be done to reduce turnover and make your organisation a more attractive place to stay.
What is the Great Resignation?
Anthony Klotz coined the term “The Great Resignation” to refer to the idea that a significant number of people will leave their jobs post-pandemic. It is a common phenomenon that testing moments in life, such as sever financial, health or family crisis, tend to create a desire to initiate change. As the world starts living with COVID-19, we have moved from survival to contemplation of ‘what just happened?’
This pandemic has redesigned and revealed – what REALLY matters to many people. People have now had months to rethink what work means to them, what it means to be valued, and how they want to create value in the world. As countries and companies push ahead with their reopening’s, millions of employees are taking the leap and leaving their jobs.
Employees have had a taste of flexible work style and decided, by and large, that they like the flexibility that it brings to their lives. Employees have assessed how their organisations have handled the crisis and some have been left wanting.
Predictions from experts suggests that the impact of the Great Resignation will start to hit Australia in March 2022.This is bad news for the country, given that we are already in the midst of a severe labour shortage. LinkedIn’s figures reveal that job seekers are in a stronger position to negotiate better contract terms, with the average number of applications per job down 63% compared to one year ago.
What factors are causing the Great Resignation?
There are a number of reasons why we are seeing such an extreme turnover. Here are some of them:
- Dissatisfaction within their current job roles. Lack of career progression and disappointment with their current roles are two key reasons employees quit. This has spiked since the early months of the pandemic, with companies reducing employee salary, freezing promotions, holding back on benefits, and even laying off employees. This has resulted in employees feeling like they are working a lot harder with little or no reward in return.
- Aspirations to change careers. With continuous lockdowns, gave people a lot of time to reflect and re-evaluate their career and life choices. The pandemic has exposed the uncertainty around life, and many are reassessing their goals and what it means to spend their life meaningfully.
- Lack of empathy towards employees. Many employees during the pandemic looked to their organisations for understanding and empathy from their teams and senior leaders. Aside from stress and isolation from extended lockdowns, employees felt languished and experienced anxiety. For companies that have failed to notice, acknowledge and support people emotionally at work are likely to experience turnover in the coming months.
“People choose to join a company for various reasons, but company culture is why people ultimately decide to stay.”
4. Need for a remote or hybrid work arrangement. A major reason employees are planning to leave their current workplace is because they want flexible working arrangements. People want the ability to be able to work when they can to fit around their lives. A Deloitte Access Economics survey commissioned by Telstra found 54% employees valued hybrid work as or more important than a 5% pay rise. The study also found that 90% of workers think hybrid work has improved their mental health, while 83% say their physical health has improved.
5. Companies refraining from having difficult conversations around DEI. After the past year’s events, many employees of colour and their allies are demanding more on the social justice front from their employers. Organisations that refuse to engage in crucial conversations about social justice have likely alienated both current and potential talent.
So, what’s the solution?
Organisations that have previously bought their way out of such talent crises are finding that throwing money or financial perks at the problem just isn’t working the way that it used to. The landscape has changed, perhaps forever. Company culture will be the big winner. Businesses where employees feel valued and where there is genuine trust and respect is what is going to attract new talent, along with:
6 Ways to Retain Your Best Talent
- Conduct an engagement survey. Engagement starts with understanding your employees. When done right, surveys can uncover critical information about where your employees are experiencing the most friction. By collecting and analysing feedback from those who have left during the pandemic, you can narrow down why people are leaving and take action on the areas (e.g., flexible work options) that will drive the greatest impact.
- Offer remote or hybrid work options. The fact that so many of employees are planning to retain this new level of flexibility into the future is a testament to how well it’s worked. Employers must harness the gains in productivity, engagement, and diversity that flexible working offers. If your employees feel like their voices aren’t being heard, they’ll be more likely to leave – especially if there’s little-to-no justification for going back to the office full-time.
- Lay out clear return-to-work plans. Lack of effective communication around return-to-office plans can be a significant factor in turnover. A McKinsey survey found, “Employees feel they’ve yet to hear enough about their employers’ plans for post-COVID-19 working arrangements. Organisations may have announced a general intent to embrace hybrid virtual work going forward, but too few of them, employees say, have shared detailed guidelines, policies, expectations, and approaches.” Organisations where respect and safety are emphasised not just in policies, procedures and processes but played out in real life behaviours will be able to attract and retain talent.
- Elevate your purpose. Purpose is the reason that your organisation exists. It’s the reason people join and choose to stay. Workplaces where there is mutual purpose and meaning in a role and managers and their teams have meaningful relationships, not just transactions. Use purpose to shape what you do in the future and how you do it.
- Spend time to build Culture and Connection. Set aside some time off work to connect and build relationships with and among your workers. Research also suggests that during the pandemic social connection has had a significant impact on the worker’s overall productivity.
- Invest in Skill Development. Show current employees that you value them even more than potential new hires by providing them with new opportunities to grow and progress in their career. Workers are hungry for this vote of confidence. BCG survey data shows that 68% of workers around the world (both blue and white collar employees) are willing to retrain and learn new skills.
The Great Resignation offers a great opportunity to us to do something different. Now is the time to really understand the dynamics of our employer/employee relationships, and consider whether those dynamics will stand up to what is about to come. People choose to join a company for various reasons, but company culture is why people ultimately decide to stay. Decisive action is what’s needed, and it’s needed now.