The Great Resignation is a term coined by Texas A&M’s Anthony Klotz in 2019 to predict a massive voluntary departure from the workforce. In 2021, his prophecy seems to come true. A survey in July this year revealed that 95% of workers are at least considering quitting their jobs. Last April, 4 million Americans quit their jobs, the highest record in the past 20 years according to the Bureau of Labor Statistics. The numbers are not as bleak globally, Microsoft reported 46% of global workers are planning to change careers since they can now work remotely. The pandemic has given people many reasons to switch their career direction, and the shift is present even more now than ever.
“The Great Resignation ended up being a pretty good prediction, but I also think talking about quitting is taboo and that taboo benefits organization. So it has helped to surface this conversation that a lot of employees are not doing well right now—and they want to talk about it.”Anthony Klotz to The Verse
However, the employers are disturbingly out of touch, or rather refuse to participate, when it comes to this conversation. A recent survey with 770 companies worldwide last May revealed a walloping gap between the employer and the employees’ perception about the Great Resignation. On average, human resource and C-suite leader experts expect only 8% of their workers will consider jumping on the exit trend, while a quarter believes that no one will quit.
The reality, however, is far more alarming. As of July 2021, an estimated 9.8 million jobs are available in the US, that is one million more openings than there are people looking for work. An employee crisis caused by the Great Resignation is inherently bad for businesses since labor turnover costs are expensive, to lose even a third of the workforce would be devastating. Inc specifically noted that the impact on small and medium enterprises will be especially severe during these times.
How did we get here?
A globally conducted poll done by Gallup in December 2019 exposed, just right before the pandemic broke out, that 85% of people hate their jobs. Bad relationships with bosses and colleagues, meaningless work, commuting, and stagnant growth were listed as the top factors that lead to unhappiness during work. Despite that, people were still reluctant to leave due to fear of making bad decisions and a lack of job opportunities. The next year, the pandemic hit, and the work landscape changed forever.
Almost two years later, it is safe to say that those who participated in the Great Resignation are the same people who had been unhappy with their jobs for a long time. After the economic shutdown in early 2020 and spending the last year working remotely, these people have had the time to reevaluate their careers and seriously do some evaluation for their future. Some are changing careers, and many have developed new interests or hobbies and find a way to monetize them. Since the pandemic began, Americans have started 6.7 million new businesses according to the Census Bureau. If anything, the pandemic only acts as the catalyst of the Great Resignation, not what causes it.
To shed some positive light amidst the chaos, the upside of the Great Resignation is we finally understand the deep underlying problem in the HR world, the disconnection between employers and employees. In a study done by Personio, most employees leave their job due to either worsening work and life balance or toxic workplace culture. On the other hand, the same research finds that most HR decision-makers think the reasons behind these resignations are due to pay freeze or cut and benefit reductions. While it is reasonable to suspect that decreasing income can be one of the major reasons driving the Great Resignation, most HR leaders evidently underestimate how damaging a toxic workplace culture is for their employees.
The Crucial Role of HR
As employees have found the time to rethink their lives during the Great Resignation, this is also the best time for HR decision-makers to start reimagining their workplace culture in 2021. As stated by Gallup, “Leaders need to recognize the influence of employee wellbeing and employee engagement on workforce resilience.” HR decision-makers should be able to improve their employee experience, which is essential within the HR function. There are seven areas of focus that need to be attended to for a better employee experience, including engagement, purpose, belonging, optimism, productivity, meaning, and connections.
Teamwork makes the dream work. As the backbone of any business, the HR function acts as the sole support and nurture system for employees. Yet, 1 in 3 HR decision-makers do not consider people strategy as an important scheme for their business. At the same time, 67% of HR decision-makers who put people strategy as their top priority see a productivity increase during the pandemic. By being more involved in the business scheme, HR decision-makers are expected to develop a comprehensive view of workplace culture.
Remember, with great resignation, comes great retention!