In the last year or so, you’ve probably heard about the great resignation — the phenomenon of millions of people quitting their jobs en masse. The American Bureau of Labor Statistics has reported millions of people leaving their jobs, and the UK is reporting a similar trend. In some months of 2021, the US job market saw more than four million workers quit their jobs.
Sadly for employers worldwide, the recent trend doesn’t seem to be going anywhere any time soon. Gallup research shows that nearly 50% of workers are actively looking for a new role, and some are even leaving their jobs without a new one to go to. A study in the UK and Ireland showed that 38% of people surveyed planned to quit in the next six months to a year.
So what is the great resignation, what’s causing it and how can you prevent your employees from quitting? To help you navigate the choppy waters of retention, we’ve put together this complete guide to responding to the great resignation and keeping your workforce happy.
What Is The Great Resignation?
The last few years have been strange and stressful for everyone. But businesses have been particularly hard hit by the pandemic and its effects. While there was a lot of unpredictability in the business world, very few people saw the great resignation coming.
The great resignation is a term that was coined in early 2021 to describe the enormous number of people leaving their jobs during the pandemic. American academic Anthony Klotz coined the term as the US saw many workers voluntarily leave their jobs. While much of the media have focused on the effects on the American labour market, it’s a worldwide trend.
While hospitality, retail and healthcare industries got the most attention from media outlets, they weren’t the only industries affected. Those industries had the highest quit rates, but professional and business services and manufacturing industries all saw increased resignations.
As the trend grew and America saw more than four million people quit their jobs in a single month, business experts tried to get to the bottom of the phenomenon. Was it because employees wanted higher wages? Was it due to a shift in pre-pandemic priorities and a desire for better work-life balance? Countless articles speculated about what could cause so many resignations in the same period. But what really made people leave their jobs?
Why Are People Quitting Their Jobs?
Choosing to quit your job takes a lot of thought and isn’t usually something that anybody does on a whim. So why did so many people decide to leave their jobs at the same time? There was an assumption that many decided based on the need for higher wages. But while wages played their part, there were plenty of other reasons workers decided to quit.
A recent study on the phenomenon revealed that while pay may have played a part in individual cases, it wasn’t the main driver. The study looked at employee data and Glassdoor employer reviews to find trends in why people quit. They discovered five critical causes of resignations:
Toxic culture – Employers failing to promote equity, diversity and inclusion is one of the leading causes of resignations.
Insecurity and reorganisation – The possibility of losing your job is one of the reasons that employees seek work elsewhere.
Innovation – Somewhat surprisingly, high levels of innovation at a company make employees more likely to quit. This is likely due to the high demand for innovative solutions and long hours.
Not being appreciated – Employees are more likely to leave their jobs if their talent and hard work aren’t recognised. This is less about wages and more about an employee’s ability to be seen and valued.
Covid-19 – Companies with a poor response to the pandemic were more likely to see their employees quit.
The great resignation shows no signs of slowing down as we head into 2022. Going forward, businesses will need to learn from the phenomenon to retain their top talent. To do this, they’ll need to understand what their employees value and use this to create a retention strategy.
3 Ways to Improve Retention through The Great Resignation
1. Develop Your Employees’ Careers
Today’s workforce is predominantly millennials and Gen Z who are looking for career progression. HR leaders and companies need to learn what inspires these groups to be successful, keep them on the team and ensure they have opportunities for advancement.
One of the best ways to do this is to make sure that you understand a candidate’s career goals when you are interviewing for job openings. During their interviews, ask questions about their career plans and find out what’s important to them. Once you hire them, it’s essential to keep their goals in mind and let them know that their progression is important to you and the company. Knowing that their development and growth are vital to you will help to increase productivity and boost engagement.
It’s a good idea to set up regular meetings to discuss your team’s goals and review their performance. You can do this with regular key performance indicator (KPI) meetings that assess their work and allow you to discuss their development and any new goals. Depending on your industry, KPIs can be difficult to measure, so it may be worth considering monitoring technology to record performance milestones and pick up on signs of disengagement.
2. Boost Loyalty through Rewards, Incentives and Benefits
Everybody enjoys having their hard work and successes celebrated. As an employer, it’s your responsibility to ensure that your team feel valued. Your team is your business’s most valuable asset, and to ensure that you retain your talent, you need to give recognition and rewards.
You need to set up an unbiased appraisal system to reward your staff for their successes. Employee of the month awards have existed for decades, but you’ll need to go beyond that and set up objective criteria. You’ll also need to reward more than just one staff member a month. You can set up rewards for a range of successes, such as:
- Hitting targets
- Reaching milestone anniversaries
- Client successes
- Outstanding work
One of the concerns that many businesses have about incentives, benefits and rewards is that they need to be extravagant to be effective. The rewards you give your staff can be as simple as a sincere thank you and a shout-out to the rest of the team. But even if you decide that you’d like to give more physical rewards, the cost of them will be far less than it would be to hire their replacement. A Gallup survey showed that it could cost double their salary if a team member leaves to find a replacement.
3. Focus on Work-Life Balance
The pandemic has changed the way that most people work. For many workers, it’s shown that there are alternatives to traditional working arrangements. Flexible and remote work was a growing trend before COVID-19, but it’s now a viable alternative for many companies.
Giving your staff flexibility in their role means balancing their professional and personal lives better, which can be a massive benefit to your business. Not only does it boost productivity, but it works wonders for retention. If flexibility is something your team wants, it’s essential to find ways to accommodate it. If an employee can’t get the flexibility they need from your business, they’ll likely look for it elsewhere.
You’ll need to arrange flexible working in a way that works for both you and your team. If your team are likely to be working remotely and with flexible hours, then it’s a good idea to look into employee monitoring software. This software will allow you to ensure your staff are productive when they work and indicate any issues they may be having.
Want to make sure you retain your best team members? Start a free unlimited trial of Handdy today to learn how your business could boost retention with an all-in-one workplace management software.