How to Keep the Great Resignation From Sinking Your Workforce
The COVID-19 pandemic had significant repercussions for business, one of which was the mass exodus of workers suddenly leaving their employers — even when they had no other employment lined up. The move was sudden and perplexing. But understanding why the Great Resignation happened is key to preventing it from happening again.
But is there such a risk? Will the quit rate subside, or should companies brace for more departures ahead?
According to PwC research published at the end of May 2022, the Great Resignation is likely to continue for some time still, with one in five workers saying they are considering switching to a new employer over the next 12 months. Their main motivation? Compensation, the survey finds.
But a deeper look at the data reveals a more nuanced picture.
A Look at the Numbers Behind the Great Resignation
While an increase in pay is the top motivator for making a job change (71%), this is not happening in a vacuum. The Great Resignation didn't just happen because employees are looking for better pay opportunities. The pandemic brought in a complete rethink of work values and the place they occupy in workers' personal lives.
According to PwC's report, "Global Workforce Hopes and Fears," 69% of workers said another reason they are quitting is because they want a more fulfilling job. What's more, two-thirds said they quit because they wanted to be their more authentic selves at work, and nearly half (47%) said they made the move to a new employer who offered them the ability to choose the physical location of their workplace.
Organizations striving to retain their talent may want to pay attention because the shift isn't over. According to the survey of 52,195 workers across 44 countries, 35% are planning to ask their employer for more money in the next 12 months. That proportion is even higher in the tech sector, where 44% of workers surveyed said they plan to ask for a raise.
The question for employers is, are they ready to acquiesce to the demand or risk losing more employees?
Vacant Tech Positions Remain Unfilled
Despite the headlines about mass layoffs at tech startups, US employers have posted a record 1.6 million job openings for tech professionals so far in 2022, an increase of 40% compared to the same period last year, according to CompTIA.
However, they have not been able to hire as many tech professionals as they need. Positions for software developers and engineers accounted for nearly 30% of all employer tech job postings in April.
The sector is so understaffed that four in 10 developers are unable to take a mental health day and run the risk of burnout, according to the Yerbo 2022 Burnout in Tech report. Across all 36,200 IT professionals surveyed, the report reveals that two in five are at high risk of burnout, prompted by longer hours, more demanding workloads and conflicts in work-life balance.
The result is that 42% of IT workers are facing high levels of burnout and considering quitting their company in the next six months, Yerbo found, while 62% of IT professionals report being "physically and emotionally drained."
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Stem the Tide of Employee Exits
Perhaps the most important step in finding a resolution to the Great Resignation is to first stop — or at least reduce — the exodus of employees. To do so, leaders and managers should work on implementing sustainable solutions that seek to improve employee retention, said Kerem Koca, co-CEO and co-founder of Tampa, Fla.-based Blue.cloud.
This, according to Koca, can entail creating an internal culture of innovation to increase employees' sense of contribution and value to the company. It could also mean articulating the organization's commitment to diversity and inclusion or implementing training programs and mentoring to upskill and motivate employees to grow and contribute at an even higher level.
Leaders must look at the package they're offering employees, beyond compensation plans, to determine key areas of improvement. For Koca, this source of value is often found in the digital innovation mindset of the enterprise.
“A business’s ability to remain digitally agile and competitive will become synonymous with their commitment to developing the next generation of skills,” he said. “Leaders must start viewing talent retention as a future-proofing tactic and focus on nurturing the next wave of tech professionals in order to create a more sustainable internal talent pipeline.”
Executive leadership should identify unique skills that effectively address ever-changing work trends, processes and organizational structures that accelerate their business. It is critical for businesses to have a retention strategy in place to combat the current labor environment.
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Start With Employee Experience
One thing that is clear from the data explaining the Great Resignation is that the reasons employees give for leaving their employer aren't complicated. Enjoying a healthier work-life balance, being entrusted to accomplish tasks without in-person supervision, having more liberty to innovate and contribute to the organization — those are all demands that also benefit the company.
Making changes starts with employers. Adit Jain, co-founder and CEO of New Castle, Del.-based Leena AI, said organizations need to change the way they treat their workers. This, he said, starts with investing in an enhanced employee experience.
Numerous organizations are re-evaluating how employees are treated in the workplace and striving to offer a great employee experience similar to what they offer their customers. Like customers, employees need to be engaged, their time needs to be respected, and they need to feel valued.
For some employers, this is too much work. But a highly competitive market and increased awareness about mental well-being have put employees in the driver’s seat. Organizations that will come out ahead once the labor market settles are those that will have succeeded at retaining their best employees and attracting new ones with skillsets to thrive in the future.
Overall, Jain said, the better the employee experience along the multiple touch points of the work journey — from recruiting and onboarding to developing and coaching — the better the work culture and the lesser the attrition rate. Providing a good employee experience boosts productivity and engagement. It also increases employees' affinity toward their work and helps them find meaning in what they do. Those employees work harder and more enthusiastically to proactively reach their goals.
“Engaged employees look for growth opportunities within the organization, actively contribute to the organization and are committed to it for the long run,” Jain said. “Employee engagement ensures that employees feel fulfilled in their work and look forward to a long-term association, bringing down attrition rates. As long as an organization keeps its employees engaged, the retention rate is likely to increase, as they are less likely to find any reason to search for opportunities elsewhere."
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4 Emerging Trends to Watch
The post-pandemic labor market is still evolving. Some labor experts say there are many shifts left, and some could be seismic. While what's ahead remains somewhat of an unknown, there are emerging trends among successful organizations that are worth considering.
Sameer Maskey, CEO of New York City-based Fusemachines, lists four:
- Automation: Automation will take over mundane tasks, more specifically in customer-centric industries such as finance, retail and media. Companies that struggle to fill people to complete entry-level tasks such as handling applications, finding answers from unstructured data or handling repetitive queries may want to consider delegating the job to AI and insights-powered automation.
- Processes and tools: Employee happiness and engagement is likely to remain a core focus of the talent strategy. Employers should look to implement processes or tools that can help capture employee data and metrics to help them gauge employee well-being, performance and commitment.
- Upskilling: Employees are demanding more upskilling and reskilling opportunities from employers. With more companies actively looking to create internal learning environments, employees globally will expect employer-sponsored training programs. Employees will also seek out opportunities to cross-train across business functions to expand their portfolio of skills.
- Strategic investments: Employers should consider pursuing strategic investments in communications and technology tools that employ virtual reality and augmented reality tools and techniques for remote working. Better technological and network advancements promise to make the process of working remotely just as engaging and efficient as working from a physical office space.
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Be Careful Who You Hire
How long the Great Resignation will rage on remains an open question. But companies too eager or desperate to fill roles with anyone who comes knocking may find themselves with more problems on their hands down the road.
When the market is volatile, companies are inclined to make quick rather than thoughtful hires, and this approach ends up having long-term business repercussions. Employers should be asking themselves whether they are making smart hires and bringing on people who will want to stay. Studies like the recent PwC report highlight the importance of hiring the right people and not just filling empty seats.
“Don’t panic about the Great Resignation to a point where you’re not considering how your employees are going to contribute to your business long term,” said Hari Kolam, CEO of Findem, a San Francisco-based recruitment technology company. “Teams are being rebuilt right now, and it is an opportune time to look at who you want on your team and what your team should look like.”