Over the past two years, the world has changed in so many ways, both personally and professionally. How we live our home and work lives looks very different today than it did at the start of 2020. Despite these changes, one thing that has remained a constant is employers struggling to maintain their employees.
In the first year of the pandemic, many employers faced the challenges of laying off their employees. The introduction of COVID-19 made it nearly impossible for companies in certain industries to continue operating without risking the safety of their workers or their customers. Unemployment rates were at a record high, and employers everywhere were struggling to maintain their workforce and had to get creative in their approaches to taking care of their teams.
Learn how to attract and retain top-notch employees.
Now, as we near the end of a second year of the COVID-19 pandemic, we’re seeing employers once again struggling to keep employees on the books. Only this time, the problem isn’t due to decreasing product demand or business revenue — it’s voluntary resignations.
What is The Great Resignation?
Employers might be questioning this worker shortage, asking “Is there really a Great Resignation?” According to the data, what we’ve heard is true: record numbers of employees are resigning in America. And we’re not talking a few hundred, or even a few thousand employees. We’re talking millions.
Generally, most resignations have come from industries where a lot of the work is done in person, where jobs are relatively low-paying, or where demand increased dramatically. If we explore resignations by industry, it appears leisure and hospitality industries, along with healthcare and tech, all saw significantly higher numbers of employees quitting than in other industries.
And the numbers just continue to climb — according to the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey, we saw resignations hit approximately 4.4 million in September 2021. October saw another 4.2 million employees quit their jobs. And while that’s a decrease from September, it’s still an extremely high (and still growing) number of workers that are giving notice.
Why Employees Are Resigning?
Seeing those high numbers of voluntary resignations brings up the question of why so many employees are calling it quits. If we step back and look at the state of the world today, it’s obvious that the pandemic continues to impact home and work life. This continued impact has caused many people to reevaluate how they live their lives. For millions, this included reevaluating their careers.
Priorities changed for employees when it came to their jobs. The forced expansion of remote work introduced people to a different way of working, and allowed them more time and space to consider what they truly wanted from their careers. If we consider the big headlines around the landscape of work in 2020 and 2021, what employees truly want may not be a big surprise.
More flexibility & work-life balance
For many employees, working remotely allowed for a work-life balance they’d never experienced before. Some had a harder time adjusting due to their environment or caretaker responsibilities, but others found it was much easier to manage their workday from home.
Despite any challenges that were presented in the remote work environment, generally high productivity levels proved that employees could meet goals without having to be in the office or put in extra-long hours. This fact prompted, again, literally millions of workers to prioritize remote work over being in a traditional office setting. With remote work, long commutes are history. Employees don’t waste time traveling between meetings. Parents can be present for their children while still tackling their to-do lists. The benefits of remote work make up a long list, and employees are clutching to that list when considering potential employers’ remote work policies.
Another reason employees are leaving their current positions comes down to — you guessed it — money. We’ve seen wages for low-income workers rising at an incredible rate, and the number of open roles in the U.S. hit 10.4 million in September. The job market is ripe for the picking, and employees are recognizing their pull when it comes to securing a position that offers them the compensation they feel they deserve. It’s important to remember that compensation is not always just about salary. Benefits, perks, and development opportunities play into total compensation that employees evaluate when considering a potential employer.
More growth & development
Professional development and growth opportunities are another big driver for employees seeking new roles. As we mentioned above, what an employer offers in terms of learning and development can impact whether a candidate accepts an offer or not. The same goes for the potential of promotion. Employees want a better chance at growth, both in skillset and position in the company. And if they’re not getting that chance in their current role, they may feel forced to look elsewhere. This can also apply to those who wish to change their career path — the pandemic pushed many people to go after their passions and dream jobs, regardless of whether they were satisfied with their current employer or not.
Starting their own business
Another interesting reason employees are quitting their jobs? They’re starting their own businesses. According to the U.S. Census Bureau, roughly 4.3 million new business applications were filed in 2020. That’s almost 1 million more than in 2019! The trend remains high this year, and likely accounts for at least some of the resignations. While it’s tough to challenge someone’s entrepreneurial dreams, it’s helpful to understand where employees’ heads are at.
COVID-19 and its variants are unfortunately still a risk, and that’s another thing on the minds of employees who are considering a move. Some workers have concerns about returning to an office, now or in the future. They or their loved ones may be immunocompromised, and they might not want to take the risk of going into an office setting on a regular basis (or at all). Employees may have concerns around the precautions employers are taking around return-to-the-office considerations, from workplace preparation to vaccination requirements. With the pandemic still being a factor, COVID-19 will likely continue to impact how employees approach their career choices.
How Employers Can Retain Employees?
With more of an understanding of the reasons behind the Great Resignation, employers can start making efforts to retain (and recruit) more employees. However, it’s important to look at employee populations separately — both resigning employees and those that remain — to gather and apply the right insights for success.
When it comes to those who are quitting their jobs, it’s a hard task to convince an employee to stay if they’ve already resigned. Once an employee resigns, though, employers do have an opportunity to learn the reasons behind their decision. This can help avoid more resignations in the future. Exit interviews are key to gaining this kind of insight, so employers should make sure to conduct those for all employees who’ve resigned. Preparing specific and focused questions to be used for all exit interviews can help ensure the consistency and relevance of the info gathered.
With that info in hand, employers can then explore the impact of resignations on the business and address the issues that are causing the biggest negative impacts on key metrics. It can be a bit complicated to do, but quantifying the impact of resignations on the company can make it easier to identify the right steps to avoid more resignations in the future.
When an employee quits their job, the rest of their team is almost certainly impacted. There are a few steps employers can take when it comes to taking care of the team members that remain.
First, understand that workloads and responsibilities will change. While it may not be a huge or permanent change, any change of this nature can and will likely affect employees. Managers should try to help manage excessive workloads and added responsibilities so employees don’t become burnt out. It’s also important for managers to check in with their team on how they’re feeling about losing a coworker — employee mental health and wellbeing are important considerations when change happens in an organization.
Once employers have checked in with their teams, efforts should be made to understand any issues remaining employees are having, and what they need to be happier in their role. Comparing their issues against the issues of the resigning employees can help validate lessons learned from those who resigned, and can help employers prioritize the most important issues accordingly. Employers can then take a proactive approach and create programs specifically designed to address those issues.
Listening to remaining employees can arm employers with exactly what they need to retain the existing talent (and recruit new talent). It’s possible that the remaining employees want the same things as the millions of employees out searching right now: remote work, flexible schedules, better compensation, and development opportunities. Whatever those things are, it’s necessary for employers to consider if they can provide them to their workforce and how. Now is the time to invest in retaining employees, if it’s not a priority already.
Gathering the intel required to really address employee concerns and needs can go a long way in making employees feel appreciated and fulfilled in their roles. And the happier an employee is, the less likely it is that they’ll look elsewhere for career fulfillment.
Armed with the right knowledge, employers can take measures to mitigate more resignations in their organizations. And that same knowledge can be applied to recruitment strategies. It’s true that companies may be losing employees at an alarming rate, but at the same time, there are millions of candidates out there looking for their next opportunity. And by identifying what employees really want and need (and taking steps to make those things a reality), employers’ struggles to maintain staff could start to become a thing of the past.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.