What began in late 2020 as a spate of post-pandemic turnover has quickly accelerated into a much larger and widespread phenomenon: what everyone now commonly refers to as The Great Resignation.
These conditions have persisted for a few years now, and affect all industries and job categories. So what is going on? And how do you best protect your business. In this article we will discuss:
- Why is the Great Resignation happening?
- As a business owner, how should you respond?
- What specific areas should you focus your time and effort?
What’s happening during The Great Resignation
According to the Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover (JOLT) summary for July 2022, the worker quit rate remains elevated at 4.2 million voluntary resignations for the month, representing 2.8% of the entire U.S. workforce.
Even more concerning for employers, the Society for Human Resource Management (SHRM) reports in its Spring 2022 People + Strategy Journal that on average, a majority (about 60% at the time of reporting) of recent turnover is voluntary.
Employees (and the leaders who hold organizations together) are leaving their jobs in droves, at their own initiative, and a sizeable portion of them don’t seem concerned about the security of having another job lined up.
Interestingly, consulting firm Grant Thornton reports in its State of Work in America survey that two in five workers (40%) who changed jobs in the last year are already looking for another job. This suggests that job hopping has become a phenomenon in itself, whether that’s because of bad onboarding or increased opportunity – or both!
The big question is whether The Great Resignation will become a new normal for the long term, or whether a slowing economy may lead to employers tapping the brakes on hiring.
No one has a crystal ball and knows precisely what’s going to happen in the months and years ahead, but employers can take action right now to combat immediate effects.
Why employees are leaving
So, what’s going on with workers? What’s driving these unprecedented resignation levels?
The COVID-19 pandemic started as a collective trauma that all workers experienced simultaneously, spurring a variety of emotions such as:
As a result, it morphed into a mass moment of reflection for workers to re-evaluate their goals, priorities, interests and preferences going forward.
Certainly, some tenured employees have decided it’s a good time to retire – even a bit early. And the SHEcession has forced significant numbers of women out of the workforce – many of whom have yet to return.
But what about the employees who are still actively working? Some employees may have decided to pursue another career or go back to school to study another discipline.
Perhaps other employees realized that they enjoy working remotely and balancing professional and personal obligations, such as:
- Care for other family members
- Their own wellness and wellbeing (for example, exercise or focus on mental health)
According to the same SHRM data, the top 5 reasons that employees leave their jobs right now are:
- Higher compensation (32%)
- Improved work-life balance (29%)
- More competitive benefits (25%)
- Desire to find more empathetic leadership (21%)
- Better workplace culture (21%)
Given the tight labor market and record-high numbers of job openings, workers are well positioned to demand more – and receive it. Employees have options and, as such, companies have had to adapt their recruiting and hiring methods to become more competitive.
How businesses can respond to The Great Resignation
Remember: it’s almost always more expensive to recruit new employees than to retain your current workforce. The questions at hand are:
- How can you prevent your business from becoming a victim of The Great Resignation and mitigate its impacts?
- What can you do to engage and hang on to your valued employees?
- What changes will your business need to make, potentially for the long term?
- Have your employees’ desires and priorities changed?
With the ever-changing landscape of employment and productivity in a post-pandemic landscape, here are some strategies to avoid impacts from The Great Resignation.
1. Invest in retention
Having a strong people strategy is one of the best starting points for making sure your existing workforce feels respected, valued and appreciated. Transforming your retention efforts is one of the first places to begin when discussing how to combat The Great resignation. Although most of the categories below can be included in a retention strategy, the big three to think about are:
- Competitive salaries and benefits – Review your salary structure, bonus programs employee benefits and other employee recognition programs to see where you have room to make improvements.
- Good company culture – A strong company culture with clearly defined values that are carried out by leaders is essential. Make sure the qualities of your organizational culture align with what your employees want to see.
- Employee engagement – Low engagement is a bad sign when it comes to retention. If you’re in the spot, there’s still time to improve employee engagement.
2. Focus on servant leadership and communication
Everything surrounding The Great Resignation, at its core, relates back to the connection and communication between employers and employees – the strength of the relationship between these parties.
The absence of connection and communication leaves room for misunderstanding, worries and resentments to fester. Wherever there’s a gap of information, people tend to fill it with their own assumptions – and it’s often negative.
If you don’t know your employees, they’re a complete mystery. You don’t know what they’re thinking and feeling. You may misunderstand their behavior. You can’t anticipate their needs or have the opportunity to deliver what they want.
Likewise, if your employees never hear from you, they don’t understand the reasoning behind company decisions or they can misinterpret the actions of leadership. They don’t feel they have a resource for communicating concerns or asking for help. They feel encouraged to leave.
Companies that prize transparency and honesty in their culture seem to perform best and have the most engaged employees.
To many employees, their frontline manager is their most important relationship at work – to them, this person represents the company. It’s essential that leaders frequently engage with their direct reports to:
- Regularly check in on them, both professionally and personally, and find out what they need
- Evaluate workload
- Answer questions
- Make accommodations as needed
- Provide coaching
- Offer resources and support
- Help guide their career forward
- Communicate expectations
The old saying that “people leave managers, not jobs” remains true. A fractured manager-employee relationship is extremely harmful to retention. The strategies above are especially important when leading a remote team.
Companies that emphasize connection and communication will be far ahead of the game in proactively addressing employees’ concerns before they decide their best course of action is to leave.
3. Prioritize flexibility and work-life balance
Yes, a lot of employees enjoy remote work. But that’s just part of the equation. You know what employees want even more? The autonomy to decide where and how to work.
They want to be responsible for choosing the optimal working environment for their individual needs and the type of work they’re currently producing. They no longer want their schedule dictated to them.
Employees also crave more work-life balance in which “work” and “personal stuff” aren’t sectioned off into separate buckets to be dealt with at a prescribed time. People want the option to tend to their most pressing priority at the moment as long as they’re meeting requirements and satisfying deadlines. For example, employees can be involved in their children’s school activities, visit the doctor’s office, take their dog for a walk or go to the gym during the work day without begging for permission.
There’s a growing recognition that work isn’t one size fits all – not everyone is productive under the same conditions or at the same general time. This is why many companies are becoming flexible workplaces, offering such work arrangements as:
- Options for 100% remote work
- Hybrid work (employees have demonstrated a willingness to come to the office when it’s justified and the reasoning is communicated well)
- Flexible schedules
- Shortened work weeks
- Flexible or unlimited paid time off (PTO)
From employees’ and job candidates’ perspective, workplace flexibility and the option to work remotely – at least part of the time – are no longer seen as special benefits, but are quickly becoming expectations for their next job.
Companies that resist this trend risk falling behind in recruiting and retaining top talent.
4. Re-evaluate expectations and policies
With the shift toward flexibility and autonomy, employers must adjust to the evolving landscape and keep up with the times. This means reassessing workplace expectations and policies to benefit both businesses and employees.
To encourage wellness and work-life balance, how can you consider adjusting:
- PTO policies – Many companies are increasing PTO or removing limits on PTO.
- Dress code – Given the fact that many employees worked from home for more than a year, perhaps standards around attire have become less formal.
- Remote work – What are the firm rules for remote or hybrid work? Do they allow for a flexible workplace culture?
It may not even be major, sweeping changes that companies have to make, but more “spot” changes that are relevant to the moment.
Whichever changes you implement, be mindful about which employees the changes apply to and the precedents you’re setting. During The Great Resignation, many companies have become more generous with new hires in a bid to attract top talent. But don’t overlook tenured employees – they will want the same treatment. Best practice is to treat all employees equally. Document all policy changes and notify employees in writing.
5. Conduct employee surveys
You may not know how to make your workplace more desirable if you don’t understand what’s most important or meaningful to your employees – or what problems exist.
Employee surveys are a great way to obtain feedback. But, if you distribute surveys, you must also be willing to communicate the major findings and share which actions you’ll take next and why.
It’s also smart and proactive to conduct stay interviews with tenured employees to uncover what has kept them at your workplace and if they have any recommendations to share.
By the time an employee resigns, it’s obviously too late to retain them – but you can still glean valuable insight from them via a thoughtful exit interview. Ask them what went wrong or what they felt was missing at the company. In what way do they consider their new role or company to be superior?
Through these activities, a realistic and consistent picture of your company should emerge, helping you to identify areas for prioritization and improvement.
6. Champion employee wellness
Use gathered information from surveys to understand what employee wellness programs and health offerings are most important to your employees. This information could strengthen their engagement and boost satisfaction.
Following the pandemic, there’s a heightened focus on wellness and whole health in the workplace – not just physical health, but also mental and financial health. How can you enhance your wellness programs to be more helpful and beneficial to employees? What services can you highlight in your employee assistance program (EAP)?
7. Motivate employees with growth opportunities
Opportunities for learning and development are commonly cited by employees as desirable. Most employees want to keep improving themselves and expanding their skills and knowledge. A lot of training and development opportunities don’t have to break the bank, either. Little- or low-cost strategies to invest in your workforce’s professional development include:
- Explain what their career path looks like in your organization and what the requirements are to achieve the next step in their progress.
- Offer mentoring sessions or an opportunity to work on unique projects.
- Hold lunch-and-learn workshops to develop new skills and boost morale. Guest speakers can even come from other parts of the organization.
7. Enhance diversity, equity and inclusion (DE&I)
DE&I plays a huge role in employee retention.
Future generations of workers, such as Generation Z, are much more diverse than their predecessors and expect their employers to have a diverse population as well.
Furthermore, it’s well established that a diverse workforce – with diversity in thought, background and life experiences – leads to better-performing teams, higher job satisfaction, more innovation and increased revenue. Who doesn’t want to be part of a workplace with these attributes?
8. Proactively look for the signs of burnout – and take action
If you’ve established good communication with your employees, you’ll know what to do when you notice red-flag behaviors indicating burnout:
- Increased absenteeism
- Reduced productivity
- Seeming lack of interest (boredom)
- Noticeable stress
Finding signs early on is key, and your response as a leader can make all the difference in how the individual chooses to move forward.
9. Expand your circle of job candidates
When employees leave and the job market is ultra-competitive, you can’t afford to be overly choosy in replacing them. Otherwise, you could have an empty chair and a gaping knowledge and skills gap in your workforce for a while.
In these circumstances, you may have to be more open-minded and consider candidates who may not fit every single desired criteria or who have less experience. Determine which qualifications are a “must have” versus a “nice to have.”
To name a few, think about hiring:
Any of your hiring initiatives should aim to be as diverse and inclusive as possible – not only to support your organization’s DE&I goals, but to also find the widest possible pool of talent.
Summing it all up
The Great Resignation has persisted for years now – and we don’t know if the coming months or years will bring any abatement. To be prepared for any scenario and to implement solid, evergreen engagement and retention practices, consider the tips we’ve outlined here to gain the best chance of keeping employees at your company – or, at least mitigating any long-term talent gaps.
For more information, download our free magazine: The Insperity guide to employee retention. What else can you to encourage employees’ loyalty? Popular choices include implementing a bonus program or recognizing employees more for their work