As the world aims to rebalance after each pummelling COVID wave, the global business community is reeling from another crisis - a tsunami of employee resignations.
We have heard much about what has been dubbed the Great Resignation. This phenomenon has been observed worldwide, but especially in the US. In August 2021, 4.3 million American workers left their jobs, with the "quit rate" increasing to a series high of 2.9 percent of the workforce. Globally, Microsoft's Work Trend Index indicates that upwards of 40 percent of the world's workforce is considering leaving their current employment.
In a McKinsey survey, the areas of the workforce that have the highest risk for employee resignations include; leisure and hospitality at 47 per cent; manufacturing industries at 43 percent; white-collar workers at 41 per cent; trade, transportation, and utilities at 38 per cent; healthcare and social services at 36 per cent; and education at 32 per cent.
In Australia, the Great Resignation tsunami has not landed, at least, not yet. While it's difficult to know whether it will, or whether it is overhyped, organisations should take the time to consider it.
After all, the Australian market is most certainly struggling from talent shortages - which have been exacerbated by closed borders - and the threat of top talent departing is a serious concern.
Preparing for Disruption
People who love their jobs rarely leave them. So, what could be behind the Big Quit? It's easy to point a finger at the pandemic, but what are some of the more nuanced reasons employees are quitting? And most importantly what can be done about it? How can businesses shore up their resources against job dissatisfaction and the inevitable departure?
From what we have observed, it's the group aged between 30 and 45 years that is showing the highest increase in rates of resignation.
There are a few reasons behind the movement of the mid-level employee.
First, experience levels. The mid-level employee is more experienced than the entry-level hire, and therefore more capable of managing a work-from-home position. This desirability for the mid-career employee translates into those workers holding a higher-value bargaining chip when securing a new job.
Another reason for employees moving on is a pent-up desire for a change in role. In the first year of the pandemic, there was great uncertainty and people were hanging on to see what would happen. But in the last six months, once the vaccines rolled out and people started to live more normally again, employees gained confidence and decided to leave their jobs.
Startlingly, some 40 percent of employees in the US who have quit their jobs did so without having secured another.
While working from home does save on commuting time, it has also increased burnout and pressure, both of which can result in job dissatisfaction. For one, the work/life barrier has become entirely permeable, and workers must contend with working in the same space as those they live with, potentially a partner, children, or roommates.
In addition, industry shifts to the online workspace have caused higher workloads, which have extended for months and months. And the nature of the work in some industries causes high stress, especially for those in service industries, healthcare, and education.
Also, people choose to "career downsize" and choose a less ambitious path with fewer responsibilities and hours. To retain valued staff, is there a way to adjust the job to fit the worker better, and fulfill their needs and values?
Of course, not everyone agrees with the Great Resignation, and some believe that people have become even more grateful for their roles and more emotionally connected than ever before. It may be the case that people are enjoying the stability they currently have and are wary of making changes in an environment of continuing uncertainty. However, whilst this may be true in some sectors, we are seeing the opposite in financial services.
Our working from home experience has broadened the scope of potential career opportunities for managers who no longer need to be based only in the capital cities. And, it has increased the opportunities for those keen on the hybrid style of work.
Also, those that have traditionally had some flexibility in how they work - such as part-time workers - are now realising that they no longer need to forgo salary in return for flexibility.
The effect of the Great Introspection
The work-related stressors and burnout of the pandemic- along with the existential threat of the disease itself - have contributed to a societal period called the Great Introspection. People are re-evaluating their priorities, meaning, and purpose.
They are taking a hard look at what is essential in their lives and are examining the role of work.
The Great Resignation may slow but given the massive economic and societal changes of the pandemic, it's likely to become endemic.
Employers have an incredible opportunity to get in front of the problem and to reconfigure ''the way we work" for the new, post-pandemic world we're living in.
Some employees are looking to work in a way that allows greater flexibility. Some have decided not to go back to the commute and full-time office work.
Employers that take a hard line on demanding workers return to the office from 9 am to 5 pm will see attrition rates rising. Fortunately, most businesses in financial services seem to have already adapted to this reality.
Employees value autonomy, which means believing that the worker knows best how to manage their workload. If an organisation is constantly micromanaging, this not only says "we don't trust you," but it creates more work for everyone with additional meetings and processes. A cultural shift that leans on trust and accountability can help reduce the need for micromanaging.
For other workers, their essential need is working with people they enjoy and/or doing meaningful work. As an employer, ask how you can strengthen the relational ties between staff and the work itself? Is there a way to create a sense of shared identity? This requires surveying employees to find out their needs and then acting on the data to change the culture.
It's important to listen to staff. If they are voicing their concerns, take them seriously, then take action. Also, ask whether your company is offering genuine appreciation for employees' work, especially in response to the pandemic. Workers are tired and uncertain, and a transactional response is unlikely to have much success.
To understand your organisation's risk of turnover, it's important to survey employees to identify the root causes of dissatisfaction. Once these metrics are quantified and the reasons understood, then it's possible to address these issues in the business and create strategies and initiatives to increase retention and reduce the risk of resignation.