The HR professionals and leaders were just getting their heads wrapped around the Covid-19 crisis and the eventual return to work arrangements when they were hit with a new shocker - The Great Resignation.
Is the US workforce experiencing an epiphany that is prompting them to prioritize their careers, shift their jobs, and resign in unison, or is it a case of a poor employee experience?
The "Great Resignation" was a mass exit process that took place during the pandemic, in which millions of Americans, from frontline workers to senior executives, voluntarily resigned. According to the US Department of Labor, there were 11.5 million workers who quit their jobs during April, May, and June 2021.
Bankrate's August job seeker survey found more than half of US workers intend to look for a new job within the next year. 56% of respondents said that adjusting working hours and remote work is a top priority. Children care duties, virtual schooling, and career demands have added to the burden on working women.
"The movement of talent is so significant and so sharp that it's different to probably anything we've seen in living memory," behavioral scientist Aaron McEwan, from global research and advisory firm Gartner, told ABC RN's This Working Life.
What is Driving the Great Resignation?
The Covid-19 pandemic reshaped society at its core, forcing people to rethink what is most important to them. How much time and energy do they want to spend on their work, and what do they expect from their employers.
It was not just the pandemic that caused people to have an epiphany and decide their true priorities in life. Pandemic just solidified their perspective on what kind of career they want to have and how much time and effort they want to invest in their jobs.
This change in employees' behavior is triggered by their needs. When these needs are not fulfilled, people tend to shift their priorities. When employees are unhappy and do not have a good employee experience, they tend to shift gears (more on this later).
For now, let's look at some statistics on the Great Resignation.
Visier, a workforce analytics company, conducted an in-depth analysis of more than 9 million employee records from more than 4,000 companies to identify what is driving this recent change. Employees from a variety of industries, functions, and levels of experience were included in this global dataset, which revealed the following trends:
1. The Rate of Resignation Is Highest Between 30-35 Age Groups
Between 2020 and 2021, employees between the ages of 30 and 45 have seen the greatest increase in resignation rates, with an average increase of more than 20%.
While younger employees typically have the highest turnover, the study found resignations actually declined for workers between the ages of 20 and 25 over the last year (probably due to their greater financial uncertainty and decreased demand for entry-level employees).
There was also a drop in resignation rates for those in the 60 to 70 age group, whereas the 25 to 30 and 45+ age groups saw slightly higher resignation rates than in 2020 (but not as significant an increase as that for the 30-45 group).
2. Higher Resignation Rates Due to Intense Demand Spikes
There were dramatic differences between turnover rates among companies in different industries. Resignations in industries such as manufacturing and finance decreased slightly, but resignations increased by 3.6% in health care, and in technology, resignations increased by 4.5%.
Overall, resignation rates were higher among employees in sectors that experienced intense demand spikes due to the pandemic, likely leading to stress and burnout.
What Triggered This Major Disrupts?
1. Employee Perspectives
With Covid-19 hitting the economy, employees were shifted to the new normal of working remotely or from home. With no longer burdened with the commute to work, employees finally had the time to reflect on the unnecessary things they thought were normal. Long commutes, workplace distractions, having to wait for the shift to end despite finishing their work early, and so much more.
Some contemplated what they wanted from their work-life after going through all the uncertainty and workload. Others realized if they were going to pursue the same career or job shift to ignite their passion. People refuse to pick up where they are and take off to where they want to be.
2. New Work Policies and Work Cultures
HR professionals have been juggling multiple tasks, including identifying new challenges, implementing new work policies for the hybrid work culture, and preparing the workplace for the eventual return to work.
But the question is, is the workforce ready to adapt again to the new shift? Employees have diverse needs, and one size fits all policies might not work for all. Some employees have new commitments like taking care of their kids' virtual classes or an ill family member that they need to take care of.
3. Employee Experience
As I mentioned earlier, a good employee experience is pivotal for every modern employee. They want to stick to the job or not is directly influenced by their happiness. Now when we talk about employee experience, we need to understand what it actually means.
It is the perceptions that employees have about their work experiences based on their interactions with the organization. For example, if your employees are not fairly treated, their perception changes.
Better compensation and benefits, work-life balance, positive work culture, and respect are crucial for employees to feel satisfied. All these factors contribute heavily to the overall employee experience.
To retain the best talents, managers must create an environment where employees can grow and ensure a great experience. Employees are not going to compromise unless they are satisfied at their jobs.
4. The New Hiring Surge
Once a company loses its employees, they hire more, and employees from other companies fill these vacant positions. It is an inevitable cycle.
But pandemic has brought a new hiring trend for companies shifting to remote work fully or already are remote-based companies. These companies are more interested in candidates who have some experience working in the physical work environment in the past so that they can efficiently fill the communication gap. It is one of the major reasons why resignation is highest in 30-35 age groups employees.
Addressing the Great Resignation: How to Retain Your Existing Talents
Even though the Great Resignation looks like a voluntary mass act, most are pent-up resignations. Last year less number of employees resigned, and those are just adding up this year. It just goes to show how ignorant we are about our workforce.
The people who were already unhappy with their jobs could not resign at the peak of the pandemic. And the numbers will only rise if companies do not address the core issues and provide employees with a good employee experience.
How to retain the existing talents should be a priority for HR's now. HR professionals and managers must invest their time building a work culture that employees love to be part of. Active hiring is a must priority for companies who are losing jobs. But this should not come at the cost of ignoring the existing employees.
Here is what you can do to adapt to this crisis and make well-planned decisions.
1. Find Employees Who Are Likely to Resign
Run an internal employee engagement survey and dissect the data to understand what your employees want. You can segment the survey on employee well-being, satisfaction, compensation and benefits, work relationships, productivity, flexibility, etc.
Low metrics on engagement and satisfaction could be the signs of disengaged employees who could most probably resign. Collect the data and insights to implement employee engagement strategies for a better employee experience.
Our Vantage Pulse solution is built to take care of this HR need. HR can run internal surveys and continuous feedback with our program and identify the issues by segmenting the data. It helps to set an internal benchmark with the insights collected and implement data-driven engagement strategies.
2. Be More Adapting and Review Your Compensation and Benefits
Like I have mentioned before, employees aren't always looking for a higher salary. It's more about their well-being and balancing their personal and professional life. The more human-centric your workplace culture, the more likely you are to retain your employees. Start offering perks like fully remote work or a hybrid work schedule. Some additional perks that people would love are paid time off, parental leave, and so on.
3. Be Flexible
Don't make a rigid policy and force employees to join offices as you want. If your existing employees can work from home, let it be. Do not rush or force them to join without their will, even if it's a hybrid schedule. We do not know where they stand emotionally after the Covid-19 crisis. If they need more time to be ready, give them that.
4. Rewards and Recognition
Employees do not only work for a paycheck at the end of the month. It is a fundamental human need for humans to be understood, validated, and accepted. This is why rewards and recognition play an important role in the employee life cycle.
In the pandemic, employees had to work extra hours for the higher demand spikes. But do companies reward or incentivize employees for their extra effort? Or what role does employee recognition have on retention?
To get a clear picture on the same, we sent survey questions to experts in various industries and compiled a report on 'Boosting Retention Through Employee Recognition' based on their responses.
Here are some of the statistics from the survey.
65% of Managers and Associates would leave their jobs for better recognition and appreciation at work.
59% of respondents said employee recognition boosts employee retention at work.
25% of employees receive timely recognition in their workplace.
70% of respondents who recommend peer recognition for employee retention belong to India & United States.
66% of respondents favor monetary recognition to drive employee retention at work.
The above data gives us enough insights into why employee recognition should be a priority today. But are we doing that enough? And if so, is the recognition meaningful, timely, and value-based?
We built Vantage Rewards to simplify and automate employee recognition in a seamless manner while taking these metrics into consideration. Do let us know if we can help you implement a recognition program for better employee engagement.
Takeaway: Companies Should Get Prepared for a Huge Shift
Employees quitting jobs at such an alarming rate is a challenge that we did not foresee. It will shift the economy in ways that require more time and resources to make it stable.
It is why companies must try their best to understand the Great Resignation better and implement strategies that can benefit all. If we keep hiring and not improve the work culture, we'll be stuck in the same hamster wheel forever.
It is high time for all the managers and leaders to build a human-centric work culture. The growth of any business or the power that holds your business is always in the hands of your employees. If they are not happy, treated fairly, and respected for what they do, sooner or later, you are going to lose them.