In 2021 we all went through a very new and challenging time during the Covid-19 pandemic. During this time many Americans, over 47 million to be exact, voluntarily quit their jobs, creating a mass exit from the workforce. This is now considered the Great Resignation.
The Five Rs
There seem to be five main factors that contribute to the Great Resignation including retirement, relocation, reconsideration, reshuffling, and reluctance. Not only did these five Rs contribute to the Great Resignation, but they will also continue to have an effect on the labor market for the foreseeable future.
In 2021, older workers left their job at a much higher rate, at a younger age than they normally would have. These decisions were made out of a want to spend more time with their family and friends, as well as with confidence due to the surge in the stock market and residential property values. However, one of the biggest factors that contributed to this decision, was the greater susceptibility to Covid-19 health risks.
The rate of relocation was at the lowest on record for 2021. However, those who did move stayed within the local bounds of where they moved from. Moving within one’s county of residence has remained to be the most frequent form of relocation.
With the many deaths and illnesses brought on by the pandemic, many workers have reconsidered their line of work and careers. This change in perspective caused many to quit their jobs, especially those experiencing burnout, and find another career more fitting to their needs.
Accommodation, food services, leisure, and hospitality had the highest quit rates, and retail, trade, and some manufacturing experienced the greatest growth in their quit rates. Although these quit rates are high, all of these workers aren’t necessarily leaving the workforce, rather they are “reshuffling”, meaning they are moving among jobs that are in the same field, or between other related fields. At the end of 2021, hiring rates were greater than quit rates, meaning the growth in higher wages attracted new applicants, and most workers are willing and able to accept new jobs that are sufficiently attractive.
Let’s face it, everyone was fearful of contracting the Covid-19 virus, not knowing what it was or how it would affect us, we panicked. Through this panic, many workers became reluctant to return to the office, and many workers were ready to quit if their employers would not offer them a hybrid option.
The Great Resignation was not only spurred on by the pandemic, it was a natural reaction to the five Rs discussed above. Businesses across industries can highly benefit from understanding which of these five factors are contributing to turnover in their organizations. From there, companies can adjust and offer flexibility to their employees, creating a more stable and competitive workforce. The Great Resignation did not appear out of blue, it is very important how businesses go about making adjustments for their future employees to maintain attractiveness to their employment.
Commit to Being an Employer of Choice
The Great Resignation doesn’t have to be a negative for businesses, however, it can work to be in the favor of businesses should they choose to commit to being an employer of choice for the workforce. Here are two ideas that may help businesses attract the great talent that is in search of a new employer: embrace geographic flexibility and treasure your managers.
Embrace geographic flexibility
In many industries, remote work accommodations made by the pandemic are becoming a more permanent feature of the way people want to work. By taking a look at how a company’s work can be done remotely, businesses can meet the new expectations of current employees as well as attract new talent from far away.
Treasure your managers
With so many front-line jobs being open, it can often be overlooked that middle managers are forced to step in and close that gap. There are demands on managers’ time and focus, so it is highly important to pay attention to their needs as a business. It is vital to open communications for them that are individualized, authentic, and safe; if businesses don’t take their time to listen to what their managers need and want, their next employer will.
The Great Reward
Those businesses that are willing to adapt to new dynamics and open up communication within their company will be rewarded with access to great talent and the competitive advantages created by that talent. The time is now, to become a thoughtful, team-centered employer.
Four steps to success
As businesses begin to re-examine their workforce practices and procedures, it is important to keep these steps in mind.
- Look forward. Listen to your job candidates, what do they value, and are you able to accommodate them? Since they are a large part of the renewal of your workforce, these things are important.
- Examine your compensation and benefits as a whole. It is important to recognize what is going on in the workforce related to mental well-being, hybrid work arrangements, and diversity. There is an opportunity for businesses to adjust compensation and benefits accordingly with a renewed focus on total rewards.
- Take an approach of consultation. A well-being component in a benefits package can help give employees a way of compensation outside of salaries, such as gym membership and childcare help.
- Stretch and be vulnerable. Empathy is important. How can businesses open up to learning about their employees and helping each other thrive?
The Great Resignation has posed an opportunity for workers to negotiate for higher wages, however, companies must look at the bigger picture and do more than just a quick fix for a bigger paycheck. Businesses need to dive into open communication and get a feel for what their employees want and need in the workforce.
There is a lot of talent moving around in the workforce that can truly be rewarding to companies that strive for positive relationships with their employees.