Since April 2021, a record number of employees have quit their jobs, and even more are expected to join them in 2022 -- a trend some have termed “The Great Resignation” or “The Big Quit.” According to McKinsey, more than 19 million US workers have quit their job, and this number is growing. The study also shared 36% of employees who had quit in the past 6 months did so without another job lined up.
Many employers are experiencing the effects of the great resignation and are looking to answer the question “why?” Why are people leaving their jobs after going through massive unemployment, all while demand for jobs is at its highest?
While it may be easy to blame COVID-19, the truth is that the pandemic is not the cause of why people are resigning. In reality, the pandemic has only served to exacerbate existing concerns and frustrations for many employees, highlighting areas where employers must make changes in order to meet the needs and expectations of a modern workforce. Many employers are grasping for answers as to why, but be warned that it’s going to get worse before it gets better. The McKinsey report shared that in the next 3-6 months, 40% of employees are somewhat likely to leave their current job.
So, what can companies do to combat this?
There are five main reasons that are contributing to the great resignation. Read more to learn about each and what this can mean for your company.
In the past two years, people have made changes to the way they view lifestyle. When we went into lockdown, many people learned that they could live with less, they didn't need to go out and dine as much, they didn't need as many fine clothing or luxury items, and they learned to become comfortable with a simpler home life. This in turn caused people to spend less, therefore there’s less dependency to make as much money as they previously thought. This changed the perspective for many about how they view what they need in their lives versus what they need to achieve that lifestyle.
Lifestyle impacted how much people valued their time, from how to invest their time for their leisure and recreation compared to the trade off of work and profit.
This change also caused people to look at what truly matters to them and their relationship with their employer -- and how these connect. An employer is in question on whether they align with the views and beliefs of an individual and support their view of lifestyle. This can relate to flexibility for parents and caregivers, a company's response to social justice and the call for diversity, mental health and the need for empathy, and the consideration and support that an employer has towards those things.
People's priorities in their lives are different and what they value most may have changed because of the pandemic, but the impact is that their choice and view of how they want to invest their time with an employer has also changed. This change in lifestyle mindset may no longer align with their employer, and so they resign choosing a better fit to their lifestyle choices.
Since the pandemic, people are making choices for their own health and for the health of those that are close to them. For example, if someone provides care for someone who's in a high risk category or that lives in the same household, they may not want to risk exposure by working in person or interacting with the public and bringing that risk home with them.
Also, a company's policies and procedures of how they handle health and safety for their employees matters -- so employees and job seekers are looking to see if companies are willing to comply with the mandates and are taking action to be supportive towards employees' health and health choices. For example, a company might mandate their teammates to have the vaccination, and this may not align with an individual's beliefs, or that they wear masks while performing labor intensive work. Even though this may not be something that someone is willing to do, the employer is trying to make the decision that is best to protect all their employees and their customers. Good intentions by the employer that result in employee choice to comply, and so they resign over conditions related to health safety.
Currently, 21.45% of our population is baby boomers, and they are predicted to age out of the workforce within the next 10 to 15 years. However, the fact is they fall into the high risk group for the pandemic, as well as the massive changes to remote work and office environments are causing many to go into early retirement. While we predicted that many in this group would continue to work beyond standard retirement age, this group is also benefiting from their 401K's and their financial investments are in a boom time -- and many may be making the decision that they don’t want to continue working, or need to. This is the inverse of what took place in the last recession and is the cause for why there is accelerating loss to what is the most experienced talent group of the workforce.
This leaves a big challenge for companies because we’re not filling the workforce as fast as it's exiting. According to a new CNBC Momentive Workforce Survey, 50% of workers are saying their companies are currently understaffed.
Many companies are going through a boom time when it comes to hiring, and this is leading to a plethora of opportunities for job seekers. Opportunities for talent to leave one company for another have always been there. However, the competition for talent is so great that companies are now activating very attractive benefits to recruit talent, from compensation with large sign-on bonuses to flexible work. Many job seekers are noticing these changes and are exploring the potential to take on a new opportunity to grow their compensation, their career, and their lifestyle.
Since we are in a competitive hiring landscape right now, employers need to not only think about acquiring new talent, but also retaining their current talent. To elaborate, you need your people, and other people need your people. Ensure that you are updating your recruitment and retention strategies so you’re being competitive and remaining attractive to top talent. Be proactive and make sure your current employees are getting the current market price for their talent, or you will be paying market price or more to replace them.
As we look ahead to 2022, it’s important for employers to take an honest look at how they have handled change and empathy towards their employees through this time. Having to adjust policy, creating remote environments, creating a culture of care, and being considerate of the employee and their experience is critical for employers in retaining talent.
Companies should take a good look in the mirror as an employer and ask themselves: Is it me? Are there things that I should have or can do better? Are there things that I can do now that can change the perception that my workforce has towards me as an employer? Am I someone that people want to continue to work for? If you've handled things poorly, then the impact is likely high resignation.
People want to feel empathy from their employer, and they want to feel a culture of care. Employees need to want to choose their employer every day -- not just choose the employer through the hiring experience. Since every day is a choice for an employee, an employer needs to continue to win that talent through the employee experience. If an employer does not address surfacing concerns and challenges, not only will it cause people to resign from the company, but they will also share the sentiment they feel towards your company on sites like Glassdoor and Indeed.
By not displaying care for employees, a company may actually lose them and detract talent coming in the future.
The great resignation is a real trend employers are experiencing, and many companies will continue to struggle to find talent. This is why it's important now to take the opportunity to listen to employees, create a culture of care, focus on employee experience, and work with empathy to be competitive with the evolving expectations of today's talent. The hiring landscape will continue to evolve, and it’s important to remain agile and willing to change in order to remain attractive, now and into the future.
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