What’s behind ‘The Great Resignation’?
This is a question that companies in almost every industry have been trying to answer over the past number of months, as people continue to leave their jobs in unprecedented numbers.
Whether you’ve lost people, are experiencing difficulty hiring, or are just worried about potential issues it might cause your company in the future, The Great Resignation affects you.
And in order to make the right moves to be successful in the current climate, you need to understand its underlying causes.
The difficulty is that there isn’t necessarily one major driving force behind it. In truth, it’s more of a perfect storm of different factors which have combined all at once to create this situation.
In this blog, we’re going to dive into each of these factors one by one, and examine what your company can do to ensure your long-term people strategy is successful in this new reality.
We’ll start with a quick primer on what The Great Resignation actually is, and how it has developed over the past year.
In April 2021, Texas A&M University professor Anthony Klotz made headlines when he declared, “The great resignation is coming.”
“When there’s uncertainty, people tend to stay put, so there are pent-up resignations that didn’t happen over the past year,” Klotz told Bloomberg Businessweek, while also warning that the number of people leaving their jobs would be multiplied by various factors brought on by the pandemic.
Klotz’s words resonated a lot with companies who were beginning to see higher levels of employee churn, as well as difficulties hiring new staff.
His prediction was correct. Between April and September 2021, more than 19 million US workers quit their jobs. A Personio study of UK and Ireland workers around the same time showed 38% were planning to quit within 6-12 months, while a Microsoft survey of over 30,000 global professionals showed that 41% were considering leaving their position in the next year.
The Great Resignation was real, it was worldwide, and it was here.
What’s more, all of the data points to it continuing, with a McKinsey survey in September revealing that 64% of employers in the US expect the problem to continue for at least the next 6 months. The Great Resignation of 2021 will become The Great Resignation of 2022, and maybe even beyond.
Perhaps most worryingly, that survey also revealed an incredible 36% of those who had quit their jobs since March had resigned without another job offer.
So, what’s behind these staggering numbers? Let’s examine what we believe are the main driving forces behind The Great Resignation.
The first factor is probably the easiest to explain, and it’s the main issue Professor Klotz cited when making his prediction.
During the pandemic, a lot of people chose to ‘shelter in job’, staying in positions they would otherwise have left while they waited for the situation to stabilize.
Now, employers are seeing a lot of pent-up turnover, with people who would naturally have left at some point over the past 2 years leaving all at once.
Many people have used this argument to downplay The Great Resignation. In their view, this points to a situation where we’re simply seeing delayed ‘natural churn’ which will stabilize quite quickly.
Some have also argued that the statistics which cite large numbers of employees intending to quit their jobs won’t reflect the number of people that actually do. “Will they quit en masse to spite their employers? No, they won’t,” wrote Jack Kelly for Forbes in June.
“In surveys, respondents can be brave and talk tough. When asked if people will quit their jobs if they’re forced to go back to the office, they may honestly say “yes” at that time. Given a little room to think about the reality of this decision, they’ll quickly realize it's not such a smart decision to depart without another job offer in hand.”
But this argument falls down when you look at the general labor shortages many sectors are experiencing, as well as McKinsey’s data which highlights just how many people have left their positions without another job in hand.
While some of the current churn can be considered natural, all the signs say it’s much more than just that.
If you’re experiencing turnover that you suspect may just be natural churn, you should examine your numbers to test your theory. Compare your current turnover with your turnover during the pandemic, as well as your average turnover in previous years, and see if the numbers ‘even out’.
If they do, you might just be experiencing natural churn, and there isn’t necessarily much you can do about it. People leave their positions all the time when they’re looking to advance their careers or just need a change of scenery, and there’s nothing necessarily wrong with this.
Having said that, the delayed churn is an opportunity to persuade valuable people to stay. If you suspect employees might be considering moving on, you still have a chance to convince them that they have room to grow and thrive in their current positions.
On the other hand, if you can see that the number of people leaving significantly exceeds the norm for your company and industry, you may have bigger problems.
The pandemic forced us all into a mass experiment in remote work. And for the most part, it’s worked.
Despite the concerns of many companies, working from home appears to have actually had a positive impact on productivity. A Chicago Booth study of 30,000 workers revealed that 60% reported being more productive at home.
The authors of the study attributed the lift to the elimination of commute times, which allowed people to get more rest and feel more energized. Increased flexibility also meant that employees were freer to work at times when they could be more productive.
So, employees love WFH, and they’re getting more done. It’s a win-win, right?
Not everyone thinks so. A survey from Future Forum revealed that 75% of executives favoured a return to the office for 3-5 days a week, compared to just 34% of employees. This highlights a worrying disconnect between the attitudes of senior management and the people who work under them.
As the COVID-19 situation improves, the result is a number of companies pushing returns to the office that their employees do not want. Faced with the prospect of long commutes and feeling unheard by their employers, they’re voting with their feet. In a Blind Network poll, 1 in 3 employees said they would quit if forced to return to the office.
Industries that can’t offer remote work have been hurt by its rise, too. Businesses in the food and accommodation sectors in Canada, for instance, were largely forced to shut down during the pandemic. Now, they are facing a hiring crunch as they open back up, with more than 180,000 former workers moving on to other, more flexible jobs in different industries.
On the other side of the coin, remote work isn’t for everyone. People with certain kinds of personalities might prefer the camaraderie and easier collaboration of office life, while others may not have an ideal home situation to create an optimal workspace.
These people are a smaller minority, but they may also be on the lookout for new jobs if their current companies choose to embrace WFH long-term.
Whether you’re returning to the office, going remote-first, or implementing a hybrid approach, one thing is certain: you need the buy-in of your employees.
Before making a decision, you should seek their feedback on what they would prefer, make sure this aligns with the views of your management, and be prepared to change course if necessary.
If you decide to return to the office, you need to communicate your reasoning clearly and persuasively to your staff. It might not be enough to get everyone on board, but at least it will help employees to understand why it’s necessary for your company.
If you decide to remain remote or adopt a flexible hybrid approach, you’ll have a better chance of keeping your employees happy.
However, you do need to be mindful of the fact that working from home has made it challenging for many people to feel connected with their colleagues. Even those who favour remote work can struggle with the isolation that it brings, and you need to provide outlets for team-building, communication, and collaboration.
Now, more than ever, is the time to invest in creating a more connected culture, wherever your people are.
Looking for strategies to survive The Great Resignation? View our webinar How Top HR Leaders Use Recognition To Shape Culture – 9 Simple Tips to Take Action Today to learn how employee recognition could help:
Aside from the practical challenges of moving to remote work, the sad truth is that the pandemic also created a lot of more worrying cultural problems at many organizations.
First, there was the initial response to the crisis itself. Companies which were slow to close their offices, or early to push a return, risked making employees feel like they were being put in a situation where they didn’t feel safe. Even if they complied and stayed in their roles, people are unlikely to forget this kind of treatment in a hurry.
But there were other problems, too. For all its benefits, many people have reported that remote work led to an ‘always on’ mentality at their companies, with staff expected to answer queries and jump in to solve problems outside of work hours.
It didn’t help that a lot of companies were struggling at the time due to the economic implications of COVID-19. Lockdowns left them facing uncertain futures, and under pressure to find solutions. Many were forced to lay off or furlough some of their workforce, leaving their teams short staffed.
Faced with this impossible situation, management may have been inclined to push their employees harder. Employees at some companies were expected not just to maintain their normal standards, but to exceed them.
This all happened at a time when people were facing an unprecedented global crisis that left them worried about their health, unable to see their loved ones, and adjusting to seismic changes in their everyday lives.
The whole situation has left a large portion of the workforce feeling overworked, undervalued, and unhappy with their employers.
Again, though, there is evidence of a disconnect between how employees feel their companies handled the pandemic versus the view of management, including HR leaders. In a survey of European companies, Personio found significant differences in how HR decision makers rated their handling of culture, resources, and communications during the crisis compared to their employees:
Their perception of the support they provided for wellbeing and career development, as well as the work/life balance their company offers, was also far better than their employees' verdict.
All of this points to a situation where employees feel let down by their employers, but the employers don’t seem to realize it.
With all of this in mind, now might be the time to have some difficult conversations about how your company managed the pandemic.
Even if you feel you did all the right things, inviting dialogue and honest feedback from your employees might reveal something different.
If it does, it doesn’t have to be damaging. By reflecting on your mistakes, you can use them as a catalyst to creating a better working culture in the future.
Look at areas where you didn’t communicate well, failed to provide enough support to your team, or fostered negative cultural behaviors, and put plans in place to improve.
This is where implementing an employee recognition program could be especially helpful, giving you a platform to build a more appreciative, collaborative culture. Not only that, but it would serve as a signal to your employees of your commitment to righting the wrongs at your company and moving forward.
While some of the issues created by the pandemic have fueled The Great Resignation, they have arguably just been a catalyst for a much greater, more permanent shift in people’s overall attitudes towards work in general.
Writing for Fast Company, Miami University Professor Scott Dust recently argued that it would be more apt to call the current situation ‘The Great Reprioritization’, and it isn’t hard to see why.
For many people, the pandemic prompted a lot of self-reflection. They began to consider what was most important in their lives, and the role work should play in that.
Perhaps not surprisingly, a greater desire for work-life balance and flexibility was one result. As Dust says, “for the last two years, employees have been asked to maintain their current workloads while dealing with the ambiguities and challenges of the COVID-19 pandemic. With burnout comes a longing for balance.”
Others have put it in even starker terms. “Your employees aren't leaving just because they've found better opportunities elsewhere,” wrote Diversity, Equity & Inclusion Strategist Lily Zheng in a LinkedIn post. “They're leaving because this is the first chance they've gotten to re-balance the scales of their own wellbeing and success, scales that you and your company swung out of whack during the pandemic.”
But it’s about more than just that. When asked why employees were leaving, McKinsey found that employers greatly overestimated the importance of ‘transactional’ factors such as compensation and the desire for a better job elsewhere, while underestimating ‘relational’ factors like their sense of belonging, their relationships with their teammates, and how valued they feel by management and the organization.
People are seeking greater flexibility, wellbeing, and opportunities, but they also want to be more connected, valued, and engaged at work.
What these findings represent is the desire from the workforce at large to redefine their relationship with work. This shift in attitudes has been a long time coming, and arguably would have happened sooner or later even without the pandemic accelerating it.
Employees are looking for a more positive, supportive work environment where every aspect of their wellbeing is prioritized. And if you want your company to succeed in the new landscape, you need to change your culture to meet the new attitudes of the workforce.
While the Great Resignation is a challenge for HR leaders everywhere, it could also be an exciting opportunity.
In the past, employees have arguably been too hesitant to challenge the status quo, accepting less than ideal work situations because "that’s how it’s always been done."
Now, people across industries all over the world have made themselves heard and let you know, in no uncertain terms, exactly what they want from the future of work. They are demanding change, but it’s change that could lead to a more empathetic, productive, and transparent relationship between employees and employers.
The companies who evolve and grow to match employee expectations, who take an intentional approach to shape their culture, and who give people the kind of flexible, supportive, and nurturing environments they are looking for will come out of this with more engaged, talented teams.
Those who don’t will fall behind. As time goes on, The Great Resignation could have something of a snowball effect. As their colleagues leave, even otherwise happy employees might have their heads turned by the opportunities out there, especially if they can see that their peers are better off.
If you don’t want that to happen, your company needs to act.
If you want to be proactive in mitigating the impact of The Great Resignation, investing in employee recognition could be a vital first step.
An employee recognition program can play an instrumental part in building the kind of empowered, people-first culture that the workforce is currently demanding, helping you improve retention, engagement, and even recruitment.
If you want to learn more about how recognition can be used to shape great culture, our Head of People Noah Warder and Co-founder Skai Dalziel spoke about it recently in a webinar for Professionals in Human Resources Association (PIHRA).
The presentation, entitled How Top HR Leaders Use Recognition To Shape Culture – 9 Simple Tips to Take Action Today, details:
You can view a recording of the webinar here: