As offices and industries are reopening, workers across the country are choosing to leave their jobs. What is going on? How can you and your organization prepare for the great resignation?
A few short months ago, employers were making hard decisions about PPP loans, furloughs, and layoffs as many industries stalled in the face of the pandemic. Many employees were clinging to jobs and desperately balancing work and life commitments in a mask-donned, Zoom-connected, COVID-driven world.
Now, the country is heading down the road to full vaccination. Offices and industries are reopening, with plentiful job opportunities. And many workers across the country are rethinking their work life and choosing to leave their jobs. What is going on? Why now? What can you do about it? “The Great Resignation” is happening. Is your company ready?
What is the Great Resignation?
Let’s start with the basics. “The great resignation” or “the big quit” refers to a post-COVID-vaccination wave of people leaving their jobs for other work – or exiting the workforce entirely.
The phenomenon has been quantified in a number of ways:
- A record 4 million people quit their jobs in April. At 2.7%, that figure is the highest number and greatest percentage since the U.S. Bureau of Labor Statistics’ (BLS) began tracking Job Openings and Labor Turnover twenty years ago. By contrast, at the height of the coronavirus crisis, the quit rate had fallen to a seven-year low of 1.8%. In April, the quit rate increased the most in retail trade; professional and business services; and transportation, warehousing, and utilities.
- There’s a spike in early retirement. 2.5 million Americans have retired since Covid started. That’s twice as many people as those who retired in 2019, according to Oxford Economics.
- Out of 1,000 US adults polled in a Morning Consult survey in May, 39% said they’d consider quitting if their bosses weren’t flexible about them working from home. For Millennials and Gen Z (adults born after 1980), it was 49%.
- In April, FlexJob released survey results showing that 58% of remote workers would “absolutely” look for a new job if they couldn’t continue remote work in their current job. Only 2% of the 2,100 remote workers surveys wanted full-time office work.
- A new 2021 Microsoft Work Trend Index came from 30,000 interviews across 31 countries, plus analysis of trillions of emails, messages, Teams meetings, and other activity across Microsoft 365 and LinkedIn. Nearly three-quarters (73%) of workers in the survey want the option of flexible remote work to continue, and 46% plan to move because of that flexibility.
- In a Prudential Pulse survey of American Workers in March, 46% of remote workers said they would leave their company if remote work is not a long-term option. 20% of respondents said they switched jobs during the pandemic and 26% plan to look for a new job as the pandemic threat wanes.
- According to a June Monster.com report, 95% of workers are now considering changing jobs and 92% are willing to switch industries to find the right position.
These data slices do not completely align, but taken together they show that a significant number of workers have recently quit their jobs, plan to leave, or would plan to leave if their company doesn’t provide the flexibility they want.
Why Now for the Big Quit?
In its monthly Job Opening and Labor Report, the BLS clarifies, “Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs.”
So, what makes workers willing to leave their jobs now? Again, reports and reporters cite a range of reasons, including:
- Pent-up “resignation demand” because fewer people quit their jobs during the early, uncertain months of the pandemic. (The Guardian)
- The pandemic highlighted the things workers value most in employment. If they don’t get them where they are, they are preparing to find them elsewhere when the time is right. (Prudential)
- Burnout after COVID-19 upended their working life. (Market Watch)
- Workers desire a better or better-paying job. (Business Insider)
- Pandemic encouraged many people to reevaluate what they want from their work. (Business Insider)
- The availability of unemployment benefits has incentivized workers to stay home rather than return to work. (GoBankingRates.com)
- Large numbers of Americans transitioned to working from home last year, and now that they’ve enjoyed the quality of life increase that remote work brings they are unwilling to return to the monotony of a desk-job. (Foundation for Economic Education)
Certainly, the pandemic and the need for many to work remotely has changed the work experience – probably forever. That experience appears to be one factor driving employees to reconsider what’s next for their work lives.
What Does the Great Resignation Trend Mean for Your Organization?
Regardless of the reasons, it’s wise to believe that your current and future employees are thinking hard – and talking to others – about their work environments. Which means a few things for your organization.
1) Your employees may or may not leave. You’ve heard the riddle, highlighted in the well-known business book on mergers and acquisitions, Five Frogs on a Log:
Five frogs are sitting on a log.
Four decide to jump off. How many are left?
Because there’s a difference between deciding and doing.
Many of the data points above capture workers’ intentions or decisions, not their actions. Which means, you have an opportunity to influence what happens next.
2) Now is a good time to do a risk assessment. Some of the second-level data in the above-cited reports highlight certain industries with higher quit rates as well as other risk factors, such as age and job experience. If you are a retail operation in the south or west, for example, with a high number of young workers who haven’t been with you for very long, you’re at greater risk of having employees quit than companies in other industries, geographies, and/or a different demographic of workers.
If your organization is at higher risk for quitting – or if you’re experiencing an uptick in employee resignations, you’ll want to act faster to counteract the trend.
3) It’s also time to do a skills assessment. Even if you’re not experiencing a high quit rate now, it’s important to do a skills assessment of your workforce. Does your workforce have the right mix of skills to serve your customers well today and in the future?
Once you understand where you have essential skills and where there are gaps, you are better prepared to act. That’s true whether your workforce stays largely intact, and you update important skills; or a wave of employees leaves, and you have instant visibility into the essential skills they’re taking with them.
How Can You Prepare Now for the Big Quit?
To prepare, start by understanding the great resignation or big quit. Track how the trend is unfolding in companies like yours. Then, make some very intentional moves to attract or retain the employees you want to stay.
- Assess and communicate your policies. Whether you require full-time in-person work, offer flexible workplace options, or are going fully remote, let everyone know your policies and plans. If they don’t know what’s happening, they’ll make up their own truths, feel uncertain, and will be more likely to leave. If you’ve made positive changes as a result of the past year of remote working, highlight what’s new to ensure that employees are aware of new flexibility or other benefits.
- Emphasize your culture. If you have a great culture, this is a great time to put a spotlight on what’s great about working for your company. Learning. Flexibility. Community involvement. Diversity, equity, inclusion. Sustainability. Highlight those things that are true and valuable about working with you.
- Review and update your retention strategies. Check what retention policies and practices you have in place. Given what you learn about the great resignation, are there any you want to adjust? Are there some practices you want to accelerate or elevate so your employees are better aware of opportunities you offer at work? Initiate those stay conversations with valuable employees at risk of leaving.
- Align your recruitment plans. Be sure you have a competency-based recruitment plan. By leading with skills and competencies, you’ll hire people who can fill the skills gaps of those who leave; you’ll find people who fit your goals to hire more women or diverse candidates; and you’ll find talent you might otherwise overlook if you emphasized, for example, a college degree.
Though the idea of the great resignation may be daunting, it could also be an opportunity to better align your workforce, your culture, and your policies with your business goals. In the end, you may just end up with exactly the right mix of people and skills you need to thrive together in whatever you do next. Together.
As you learn about and prepare for the great resignation, this Competency Management Toolkit can help you understand how competency management can help with current and future employees alike. Or contact us to find out how Avilar’s WebMentor Skills™ can help you through your big quit.
Stand by Me: The Latest Innovative Employee Retention Strategies
What Will the COVID-19 Vaccine Do to Employee Retention?
How to Attract Female Employees to Your Company – and Retain Them!
The Stay Conversation: It’s How to Retain Top Talent