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The Great Resignation: Why Has It Happened And What Can We Do About It?

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The world of work has experienced what appear to be seismic shifts over the past two years and as some of us are starting to return to offices, there is evidence that many of these changes will have permanent results.

Remote working options have become the default across many industries, which is possibly the biggest shift ever seen in the way that we work. We are currently seeing companies trialling a four-day week and flexible work options abound.

Now questions are being asked about The Great Resignation. Will it ripple its way across the world or remain largely a US phenomenon?

What is The Great Resignation?

In November 2021, The US Labor Department reported that around 33 million Americans had voluntarily left their jobs over the course of 2021.

Also in 2021, a survey by Microsoft of 30,000 people across 31 countries found that 41% of them said they were also considering leaving their jobs.

Organisational psychologist and professor Anthony Klotz coined the term ‘The Great Resignation’ in May 2021. The world was riding the wake of the coronavirus pandemic and lockdowns had re-shaped the way that many people worked. The theory is that it had given people the opportunity to rethink notions of work culture that have been ingrained in society for decades and now there was an chance to challenge it -by walking out and doing something else.

Anthony Klotz told CNBC: ‘It’s not just about getting another job, or leaving the workforce, it’s about taking control of your work and personal life and making a big decision – resigning – to accomplish that. This is a moment of empowerment for workers, one that will continue well into the new year.’

While on the surface, we’re in the midst of an uncertain global economy rocked by war -will people in the world’s largest economies continue to quit their jobs?

Reasons for Leaving

A common reason given for resignation is a severe lack of adequate, affordable childcare options and mothers still take the brunt of this.

An economist at the US Census Bureau found that there were 1.4 million more unemployed mothers in the US in September 2021 than there were in 2019 compared with a very negligible rise amongst unemployed fathers.

Toya Gavin, founder of career coaching service Legally Bold, puts forward that BAME (Black, Asian and Minority Ethnic) employees just want greater satisfaction and the ability to make an impact with the jobs that they do. She said:

‘For people of colour, and in particular, Black people, where you see that play out is along the impact line. They want to make an impact and they also want to feel connected to their workplace, and there’s a sense of disconnection when you’re working in an environment that doesn’t see you.’

A survey of over 900 Americans conducted by US based career website Zety showed 67% reported that low salary was one reason for them quitting and 55% said that being forced to return to the workplace after successfully working remotely was another major factor.

Microsoft Work Trend Index found that 46% of remote workers globally plan to relocate from the towns and cities that they used to commute to and from. Another survey by professional services network PwC found that 12% of remote workers across the world had already moved 50 miles from their office since the start of the pandemic.

There is also evidence that hospitality, healthcare and retail have been disproportionately affected by The Great Resignation. These typically low-paying industries are also overwhelmingly run and staffed by women. Could it be that a large number of women have had little choice but to seek better pay and better opportunities?

As the cost of living continues to rise but the average wage doesn’t match up to it, employees at all levels and in across multiple industries are looking for other opportunities. The ONS reported a rise in regular UK employee wages (excluding bonuses) by 3.8% at the end of 2021 but prices of food, energy and household essentials rose 5.5% over the course of last year, putting inflation at a 30 year high.

Similarly, a recent US survey of around 9600 employees of large to mid-size private companies found that 44% of them are active jobseekers. 56% of the total number surveyed said that their wage is the main reason they’d look for another job and 41% said they’d leave their jobs for just a 5% increase. Interestingly, 20% said they’d leave their job for the same salary, which suggests that it’s not just a financial thing.

Feelings of disconnection could also be at play for employees looking for roles elsewhere. A recent survey of 1000 employees by Business Electricity Prices found that 53% of remote workers are worried about being left out of office-based activities and around 35% thought that office employees would be favoured for promotions and pay rises. Exclusion and loneliness can be hugely detrimental to anyone’s mental health, so businesses must consider how they’re going to reconnect with valued employees, who no longer have a desk in the office.

The Anti-Work Movement

With feelings of intense dissatisfaction, disconnection and mental burnout rife amongst workers, it’s little wonder that many have seriously questioned the purpose of their work. Rooted in socialist and anarchist critique, anti-work challenges the necessity of most jobs and encourages workers to only work as much as is needed.

A rapidly growing subreddit r/antiwork now has over 1.7 million subscribers and focuses on conversations around labour rights. It is also a space for tired, overworked employees to share the work stories that made them realise that life is simply too short to spend it in jobs with low pay, limited benefits and in some cases, a complete lack of consideration for the humans themselves.

The anti-work phenomenon is not new but of course, the pandemic ignited new interest and refocused workers’ minds to the actual most important things in life, namely freedom and happiness.

The Talent Squeeze Continues

The combination of The Great Resignation and the anti-work movement has meant that large numbers of businesses across a range of industries now face a severe talent shortage and are struggling to recruit.

Voluntary job quitting was higher in 2021 than it was in 2019 and managers of large organisations, in particular, are expecting that to continue in 2022.

A December 2021 poll of over 1200 UK managers found that 89% of them currently had vacancies in their businesses and 55% said that it’s harder to fill those vacancies than it was pre-pandemic.

Another poll of 1000 UK workers found that around 29% are indeed currently considering a new job this year. The main reasons appear to be salary issues and unnecessary office working. Companies that offer remote or hybrid working seem to be the least in danger of losing employees with a third of workers stating that flexibility is a reason for them to stay in their jobs.

Meanwhile, a recent survey by Mercer found that it’s a similar story in Asia. Employers in Malaysia, Indonesia, Thailand and the Philippines all reported a higher than usual turnover of staff at mid-career level due to salary dissatisfaction but also because of a lack of attractive employee benefits and career development. It is time for companies to start thinking about sustainable employee benefits that go beyond financial incentives.

What does the future look like?

There is evidence that The Great Resignation is now morphing into The Great Regret. Job site Muse found that in a survey of 2500 workers, 72% of them had discovered that their new job that promised them greener grass was very different to what they’d believed it would be. Almost 48% of these workers would like to try and get their old role back. This phenomenon is becoming known as ‘shift shock’ and it could well be hot on the tail of The Great Resignation.

Anthony Klotz himself has predicted a wave of ‘boomerang employees’ in the coming months. Whether this is due to nostalgia for the traditional workplace, struggle to find new satisfying work or improved employee benefits, many of those who quit their jobs during The Great Resignation of 2021 are expected to re-enter the industries they left. But these employees have been through a pandemic. They’ve had time to reflect, assess what they want from life and work and they won’t be returning to their jobs as the same people who quit.

A survey of 39 IT boomerang employees found that most of them were much more satisfied in their jobs after negotiating a return with better working conditions. There is also evidence that boomerang employees perform better than fresh talent, as they are armed with a new sense of appreciation from their employer and in some cases, the knowledge that things aren’t better elsewhere. There is a sense that their bosses have finally listened to what’s important to them and have incorporated their needs into their work.

How Can Businesses Reinforce Retention Strategies?

The pandemic gave workers across the globe a glimpse of the possibility of a better work/life balance through remote and flexible working. Businesses that respond to their employees needing flexibility will strengthen their appeal and build loyalty and trust, particularly from parents and carers.

While higher salaries or more rewarding benefits will attract and retain hard-working employees, creating roles that have a visible positive impact on the world will improve employee satisfaction.

Consider a bespoke approach that responds to the needs of different workers and especially different demographics. There is substantial evidence that women and BAME employees have unique needs and priorities. A ‘one size fits all’ approach may inadvertently disenfranchise these groups and lead to resignations.

Think about how remote workers can reconnect with their colleagues and leaders through increased interactivity, collaboration and even digital social activities. Keeping remote employees informed of all decisions or events that happen in the office will foster better connections and loyalty, as they’ll feel like they’re still very much part of the team.

Whether The Great Resignation is a US trend or a global revolution, successful businesses are using today to build stronger businesses by listening to their employees and developing the culture based on their feedback.

This will also be key to businesses’ ESG efforts and will show investors and stakeholders which businesses put people first.

If you need help in analysing how a new inclusive workforce strategy could help to strengthen employee retention, contact us today.

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