The Great Resignation… or The Great Opportunity?
By: Kelly Hart | Research & Insights Analyst
‘Turnover shock’ is the term coined for employees who voluntarily resign after experiencing a significant life event. These occurrences often trigger a psychological reaction where individuals re-evaluate the value that their job brings to their life (1). The causes of these shocks cover a wide range of scenarios – such as a divorce, loss of a loved one, sudden illness, having a baby or even winning the lottery; but they all carry with them the weight of existential evaluation and often precipitate a significant life shift – often in the realm of work.
In light of the previous 18 months, there’s something else we can confidently add to that list; a global pandemic. As we move towards the light at the end of the tunnel and into a time of greater economic certainty, we’ve simultaneously seen resignations reach a global record high. People are quitting their jobs in droves – in some cases without a new one even lined up (2). Microsoft carried out research that found that a whopping 41% of the global workforce rates themselves as ‘likely’ to leave their current employer within the next year (3), and whilst it’s important to take such results with a pinch of salt, as it’s much easier to ‘want’ a new job than to actually get one, organisations must pause to evaluate the colossal impact that potentially losing almost half of their talent will have on their business. These resignations are now happening en masse because the entire world has collectively experienced the ‘shock’ of a lifetime with Covid-19, causing individuals to confront their own mortality and appreciate that life is simply too short to spend wasting time in a purposeless job that they don’t enjoy, feel appreciated in or that doesn’t allow them to enjoy a life outside of their career.
This has led to the 2021 ‘Great Resignation’, which distinguishes itself from previous high-turnover periods as it is characterised by elevated levels of burnout from the pandemic, gender differences and a new wave of employee expectations regarding flexible and remote working (4). The statistics are substantial, and they point towards a pivotal change in what has now become an employee’s market where workers are driving the future of the workplace:
- Four million US workers quit their jobs in April 2021: a 20-year record (3)
- A McKinsey study found that 40% of employees are ‘somewhat’ likely to quit in the next three-six months and 18% were ‘likely’ and ‘almost certain’ to – this is consistent across 5 different countries and all industries (2)
- The UK job board Totaljobs has seen a 40% increase in searches for jobs offering remote working (5)
- 56% of Gen Z workers rate themselves as ‘unhappy’ with their work/life balance at their current job (6)
Following on from a tumultuous 2020 full of furloughing and forced resignations, it is finally an employee’s market. The onus is now on employers to give their workers a reason to stay. Talent shortages are expected across Europe, Asia and Australia (7) and it’s important to note that these aren’t restricted to blue collar workers – there is now an expectation of remote working and so office employees also have a far greater choice in where they work. There is a shift from a ‘live to work’ to a ‘work to live’ mindset (8) and it’s taken many employers by surprise as the workplace dynamic has transformed from one where workers feel grateful to have jobs, to one where employees are dictating their terms and refusing to settle when there are preferable options elsewhere. Quite simply – if your organisation doesn’t cater to your employee’s needs, somewhere else will.
What’s the Problem?
The reason behind so many people leaving their workplaces isn’t an industry, pay or role issue, but an overall workplace issue. Employees’ priorities have changed in the wake of Covid-19 and after a year of remote working, they’ve realised that going back into the office significantly detracts from their personal lives, their family commitments, and the length of their working day. On top of these, it’s likely that without being in the office and surrounded by colleague camaraderie to lighten their days, individuals have realised that they don’t actually enjoy their work all that much. Existentially, people are likely to be seeking a greater purpose in life after the ‘shock’ of the pandemic, even if that just means being valued and recognised by their managers and organisations and feeling like they’re part of ‘something bigger’ in their day-to-day work lives. How employers treated their workers and mitigated burnout will also be at the top of potential leavers’ minds.
Whilst Gen Z are significant contributors to this workplace discontent, millennials are also playing a key role in this wave of resignations. Between August 2019 – August 2020 during the first few waves of the pandemic, employees between the age of 30-45 were resigning at an average rate of 20% more than previous years, indicating that workers who were established in their careers were moving jobs. This has resulted in a drain of more senior talent; 12% more managers quit in December 2020 than in the previous year, and this statistic is skewed towards a particular loss of female talent (4). In research carried out by Visier (9), they found that a third of female managers were considering exiting the workforce altogether – a stark difference compared to men who were much more likely to just switch roles. This is a consequence of the unequal care burden that falls to women who stayed behind to care for their families during the pandemic, exacerbating the pre-existing brain drain of female talent at senior levels.
An Employee’s Market
The rapid increase in resignations currently happening is due to a backlog built up from previous economic uncertainty, where people who may have previously wanted to leave their current roles finally feel confident enough to do so. This means that a large amount of talent is now filtering into the market, but it also means that organisations are at high risk for losing their talent during this period. Employers need to communicate with their workers and work with them to create the workplace culture that they desire. The new priority is retention – and the organisations who don’t adapt will lose out. Additionally, if done well, the Great Resignation could turn into a Great Opportunity to capitalise on by hiring fresh, new talent – but only if leaders authentically respond and vocalise their genuine commitment to employee expectations.
What Can YOU Do?
Employee engagement is the best way to measure how likely you are to experience employee turnover – an engaged employee is more productive and committed to the organisation they belong to. A company that prioritises engagement will have clear common goals, open communication, psychological safety, and a culture of support – employees want to feel valued and heard by their managers and colleagues. This ties in with the post-pandemic existential shift where people want to feel like their jobs have purpose. If employees are feeling ignored, undervalued, lacking recognition, or possibly feeling as though they are not working to their potential then they’ll seek out this purpose elsewhere.
In light of this, the best way to ensure that you’re meeting your employees’ needs is to involve them in your decision-making processes, especially during this transitional period towards hybrid working. Leaders need to understand the repercussions that their next steps could have if they’re not done well – gone are the days where organisations can tempt workers into the office with perks cleverly designed to keep them there. Forcing workers back into the office will only make matters worse.
However, there are, of course, benefits to going back to the office several days a week – especially if those days are congruent across all company employees. Lockdown and consistently working from home has been an incredibly isolating experience and employees have missed out on valuable face-to-face time with their peers, networking opportunities and the ability to separate work from home life. Endless zoom calls for conversations that could previously take place with a quick workplace chat has led to zoom fatigue, and employees are missing out on those vital ‘water cooler’ conversations that help bond people together. Although there is likely to be initial pushback to the concept of going back into the office, once going in many people have already rediscovered the benefits and enjoy it once they’re there. Of course, though, this is individual-specific, and this sentiment may not be echoed by the working mother of three compared to the 20-something first discovering the workplace! Undoubtedly employee engagement can be improved by the presence of human interaction, but it’s hard to cater to this when staff are ambivalent about the benefits of going back to the office – especially as the winter weather draws in and the commute looks ever-more unappealing. It’s a dilemma that no one has the answer to, but perhaps the key here is to create a hybrid working culture with set compulsory days in the office where all employees are present and human interaction can transpire. There’s no point in individuals popping into the office on odd days just to sit on more zoom calls with those not present. The way in which we entered remote working is not the way we should transition into hybrid working – this time we have the luxury of being conscious and aware of the implications rather than being forced into it in a state of emergency. Fundamentally, this will be an experiment, but it’s one we need to embark upon together as collective workers whilst considering individual needs, and not through imposed structures from higher managerial levels.
Ultimately – the grass is greener where it’s watered, and this means that employees need to communicate their needs and managers need to accommodate them. Empathy and compassion are vital components in understanding what your employees really need and in creating a high-quality workplace culture. Appreciating employee individualism is crucial. And remember – if you do find yourself losing your talent, conduct exit interviews so you can learn from your mistakes.
2 – https://www.mckinsey.com/business-functions/organization/our-insights/great-attrition-or-great-attraction-the-choice-is-yours?cid=other-eml-dre-mip-mck&hlkid=31491be1970d48cda4ea80303daf97d4&hctky=11645647&hdpid=436a4306-6dff-443b-8c5f-1137c0991b42