In October 2021, 4.2 million Americans quit their jobs, a trend mirrored in the rest of the Organisation for Economic Co-operation and Development (OECD). Where did they go?
Some pundits framed this “Great Resignation” as an exodus of disenfranchised workers fed up with corporate life. The facts tell a different story: employee engagement is near an all-time high, while unemployment is near an all-time low.
The Great Resignation: economic facts in context
The rate of “quits” hit a record in late 2021 and has remained high. But quits data is skewed by the rate of quits in the Accommodation and Food Service sector. These industries have twice the average quits in comparison to other occupations.
Workers are leaving for new jobs, not leaving the workforce. They only resign with a new opportunity on the horizon or in hand. The ratio of employment seekers to open jobs has not been this low since the 1960s. There are approximately two vacant jobs for every job seeker. Normally, there are several job seekers for every vacancy.
Workers aren’t resigned. Engagement, according to Pew Research surveys, is near an all-time high. Average engagement data masks significant variations in employee experience. What matters more is workforce engagement and the different effect of policies on different cohorts.
(Data drawn from Bureau of Labor Statistics, The Brookings Institute, Pew Research, National Bureau of Economic Research, The San Francisco Federal Reserve, The Economist.)
Causes of the Great Resignation
When the pandemic forced virtual working upon us, many workers decided they preferred it. Data suggests workers are “pumped” by the new flexibility. There is a wider realization that office environments and office culture were designed with an idealized worker in mind, not around a diversity of worker needs. This “one size fits all” design actually served very few.
Moreover, knowledge workers are increasingly able to work anywhere in the country. This allows them to pursue “dream jobs” that offer a purpose, not just a paycheck. This “hyper-mobility” helps employers broaden their talent search, with companies in Chattanooga recruiting talent from Silicon Valley and firms in New York hiring developers in Bulgaria.
Workers now have increased agency and autonomy and they’re waking up to new possibilities. These open the door to new questions, inviting a Great Re-evaluation of priorities: “What kind of experience, at work, matters to me?” “What kind of business do I want to work for?” or “What, beyond money, matters most to me?”
This is good news for many organizations, who can:
Draw from a much wider talent pool
Reduce facilities costs
Retain talent for the right reasons, a powerful, compelling purpose, culture, or ethos
Put employee experience at the center of their brand
However, laggards in managing talent and culture will struggle. The new “hypermobility” will shine a bright light on firms whose employee experience is subpar. According to survey research, firms that insist on pre-pandemic policies may face a talent exodus while missing opportunities to recruit from a wider talent pool.
For those businesses that prioritize employee experience, the Great Resignation will prove to be the Great Opportunity. This will require a holistic change across every dimension of the talent lifecycle, including systemic changes to technology, policies, culture and leadership.
Mistakes leaders make with the Great Resignation
Even iconic firms are making mistakes as they manage the surge in attrition and external mobility:
Mistake 1: Managing the Great Resignation as if it’s just an HR problem. Leaders need to take responsibility because their behavior creates the culture and climate that retains workers.
Mistake 2: Throwing money at the attrition problem. For many knowledge workers, who are often already highly paid, money is not what makes them stay or leave. It is easy to sign a check. But focusing on paychecks gets you paycheck players. Moreover, dollars do not differentiate —they do nothing to create the ethos and purpose that today’s workers crave.
Mistake 3: Failing to look at the problem systemically and across the entire talent lifecycle. We have had a shift in worker expectations, not just those around remote/ hybrid work. As IBM’s Nickle LaMoreaux says, “this gives us an opportunity to ‘re-recruit’ our workforce” – that is, to revisit many of our assumptions and practices around talent.
To make a Great Opportunity out of the Great Resignation, leaders must create flexible, meaningful work environments that center on employee experiences. A holistic, mindful approach will not just fill desks; it will allow businesses to attract and maintain talented workers who deeply connect with the company vision.
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