Sparking fear and panic in many, the concept of ‘The Great Resignation’ has been gathering momentum, fuelled by near-daily media attention in recent months. We wanted to understand more:
· Is this really an issue?
· What does the data have to say?
· And if it really is a problem, what can employers practically DO about it?
Whether you’ve heard this as The Great Resignation, Realignment, Reckoning, Opportunity, or some other term, chances are you’ve heard it described as great swathes of the workforce preparing to quit their jobs and move on to greener pastures. While this is certainly true for some, the data suggests it’s not the majority, and while panic might be your instinctive response to headlines such as these, let’s consider what a more pragmatic, solution-focused response might look like.
But first, let’s look at what the data says:
The rate of people quitting jobs in the US has risen from 2.2% to 3% since January 2020[I]. In Australia, the percentage of people changing jobs actually decreased from 2019 to 2021 from approximately 8% to 7%[ii].
Job vacancies in both the US and Australia have increased by approximately 50% in the past 12 months[iii].
Company profits as a percentage of GDP have been rising while wages as a percentage of GDP have been declining, particularly in Australia[iv].
The US has seen some wage growth in the past two years after similar steady decline and stagnancy[v].
So, while the mass existential crisis that has been portrayed in the media appears to be unlikely, we do know:
Lots of Americans resigned from lower paying, insecure roles in retail, hospitality and associated industries, probably for better paying jobs
There is strong growth in labour demand in Australia, this may result in greater job change, particularly as real job growth may finally occur.
It does not suggest that most people are leaving their current role to make significant life changes. However, in many ways the current context, at least in Australia, appears to mimic the “War for Talent” conditions from 15 years ago. So, what can people leaders and human resource professionals do?
We are becoming better informed about what is important to our employees, interestingly, sometimes this is different to what management believe. The most obvious of these defaulting to paying more, while, at least in some cases, employees wanting a greater sense of connection, respect and career development from their employers. It is also worth mentioning that different research projects yield conflicting results. Our research suggests the following actions:
Listen to your people – understand what they want
Don’t assume you know what your employees value most, ask them! Talk to them. Be open during the recruitment process to hearing what great candidates are looking for. If you think it’s all about money, flexibility, training and development - as important as all of these are, you may be wrong. Great co-workers, a caring environment, and feeling valued are ranking higher for many employees.
Reconsider the psychological contract
What are you really promising when you hire someone? These may be explicit in terms of remuneration, benefits, agreed working arrangements, etc. But there will also be implied promises that you’re making – the sort of work people can expect to do, the people they’ll be working with, the opportunities that may arise. Do this match reality? Does your organisation consistently follow through on its promises? And once you know what really matters to your people, what can you do to improve the conditions that you offer?
Don’t overlook the ‘hygiene factors’
While a few the ‘higher order’ factors such as career development are important, one of the areas that is often overlooked are the key resources, ways of working and other conditions that are fundamental to employee experience. Sometimes showing up in employee feedback about ‘resources’, ‘processes’, or other descriptions, these issues may be more easily addressed than other factors, while directly contributing to improved productivity.
Actively shaping your culture, focusing on community and connection
Working with supportive co-workers and feeling valued are often cited as one of the top priorities for employees, as well as being part of an organisation that genuinely cares. Does your culture currently generate this experience? Shaping your culture to your employees’ expectations will not only improve retention but create to possibility of people returning to your organisation having worked elsewhere.
Providing Meaningful Work
This may take a few different forms. One form is the overall organisational purpose; how does it contribute positively to the broader world and is this aligned to your employees’ values. The second form is providing opportunities for your people to develop mastery and have appropriate autonomy over their work. Both factors have been shown to improve engagement and retention.
In summary, most organisations are likely to face challenges in the current economic environment, however, identifying and providing a few key factors for employees will result in these organisations being better placed than their competitors in our current conditions.
[i] US Bureau of Labor Statistics
[ii] Australian Bureau of Statistics and ANZ Job Series
[iii] Australian Bureau of Statistics and ANZ Job Series & US Bureau of Labor Statistics
[iv] Australian Bureau of Statistics
[v] US Bureau of Economic Analysis