Will 2022 See Another Great Resignation?
Staff turnover is a cause for concern at any time. But, in 2021, concern turned to widespread panic as quit rates soared across the country. This phenomenon reached such proportions that it earned a nickname: The Great Resignation.
This kind of movement seems to have leveled off—for now. But things can change quickly. What will you do if you find yourself suddenly facing another wave of resignations?
The good news is that not every company was affected by The Great Resignation. If you take steps today, you could prevent departures in the future. And the first step is to understand why people decided last year was a good time to quit.
What caused the first Great Resignation?
The Great Resignation is a controversial term. It actually describes several concurrent events, most of which occurred in low-paying sectors like retail and hospitality. Some resignations were forced, as people left the workforce to care for unwell relatives or because they themselves fell ill.
Nevertheless, most leaders in professional industries would agree that 2021 saw an unusual level of staff turnover. This movement of people came down to a number of factors:
1. Deferred resignations
In the first year of the Covid pandemic, workers felt a great degree of uncertainty and doubt. People worried about job security and a possible economic collapse. They also worried about what would happen if the virus hit their family.
People who had been considering a move instead decided to stay put for a while. As a result, employers saw a drop in voluntary staff turnover. But, once the situation stabilized, those same people decided that it was time to make a change.
2. More vacancies
Job openings surged last year, with over 11 million vacancies open in December. It’s tough to recruit in such a busy market, which is why 70% of HR leaders say that it’s harder than ever to find qualified candidates. As a result, many recruiters now try to lure recruits by offering enhanced salaries, lucrative perks, and signing bonuses.
Candidates hold all of the cards today, especially elite candidates. 50% say they received multiple job offers when seeking a role. The hectic hiring environment also puts pressure on staff retention, as headhunters try to entice loyal staff with high-value offers.
3. Better work-life balance
The pandemic had some positive effects. The switch to remote work made it easier for many workers to manage their personal commitments, such as childcare and education. They also saved hours each week by cutting out the morning commute.
This change in perspective has caused many people to ask the question: would my life improve if I had a different job? Over half of employees said that they would quit if they couldn’t work remotely, while many would consider a pay cut in exchange for a better work-life balance. All of these are critical factors in ongoing staff turnover.
4. Big companies hiring remote workers
Remote working has also allowed employers to cast a wider net for candidates. If you’re willing to hire a fully remote worker, you can look for talented people outside of your city – or even outside of your country.
But other companies can do the same, which disadvantages smaller companies. In the past, small-town businesses could benchmark their salary structure against local rivals. But now, elite firms will offer remote workers a big-city salary while allowing them to stay in their small town. That could be a major retention challenge for regional companies in the coming years.
5. Slow progress on DE&I
Diversity, Equity and Inclusion projects took a major step backward during the pandemic. Racial minorities have seen their average earnings decrease. Meanwhile, women left the workforce in record numbers. It’s frustrating for those groups, especially if they feel their employer isn’t tackling this issue head-on.
Candidates also care deeply about DE&I, with 67% saying they would prefer to work for a diverse employer. All of this means that we may see continued labor market movement in the coming year as people search for inclusive cultures.
Related reading: The Complete Guide to Employee Retention
How to minimize staff turnover
Some of the factors above are related to the pandemic, which means that they will fade away over the course of 2022. For example, deferred resignations may have already peaked, meaning that voluntary staff turnover is going back to normal.
The other factors are evergreen problems for employers. Even if there is an economic downturn, it’s always hard to hang onto your most valuable employees. But here are some things that you can do:
1. Review your Total Rewards
Salary is still the main driver of voluntary staff turnover. If a rival firm offers your employee a 20% raise, there’s a strong chance that they will take the offer. That’s why your first step should be to perform a salary review using up-to-date salary data.
But salary is only one element of Total Rewards. Ensure that you offer perks, benefits and bonuses that genuinely speak to each employee’s needs. You can also leverage remote work and flexible schedules to offer a sustainable work-life balance.
2. Reboot your DE&I strategy
First of all, you need to know where your DE&I strategy stands now. Has the level of diversity on your team changed since the pandemic? Have minorities seen their salaries increase at the average company level? Is everyone receiving the same kind of opportunities and support?
It’s also important to look at how your recruitment process deals with the post-pandemic reality. For instance, many women dropped out of the workforce in 2020 to care for children or relatives. Will your hiring team consider this when they make their decision? A proactive approach to DE&I will prove to your team that you take this issue seriously.
3. Revive individual career paths
Around two in three Gen Z employees say that their careers took a setback during the pandemic. You can help those employees – and anyone else that hit a roadblock – by reviewing their career goals and laying out a realistic career path.
You will need to support these career goals by offering meaningful professional development. That might include eLearning, certification courses, or subsidies for higher education. You can also offer mentoring, job shadowing, opportunities to work on exciting projects, or professional association membership. If people feel that their careers are moving forward, they’re less likely to consider a change.
4. Renew your organizational culture
Remote working is here to stay, even if that means a hybrid schedule of in-office and at-home days. Leaders see this as a challenge, with 95% of CEOs worried that their organizational culture will suffer if the team is not together in the office.
But perhaps it’s time to look past that. Instead, it’s time to consider how to build a thriving organizational culture that includes in-office, remote and hybrid workers. With the right strategy and communication tools, it can be done.