How to turn the Great Resignation to Your Advantage
The rollercoaster ride of the last few years seems never ending. First, an unprecedented global pandemic turned everything upside down, and now an impending economic recession is bringing massive uncertainty into our lives. Lockdowns and business closures destroyed livelihoods and cut us off from our support networks. Then, just as the economy appeared to be recovering, inflation hit levels not seen since the 1980s.
Amidst all this uncertainty, we’re seeing another trend come to the fore. It’s called the Great Resignation – a tidal wave of workers voluntarily quitting their jobs, affecting the economy and how we will work for years to come.
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What is the Great Resignation? Is it real?
The Great Resignation is an employment trend marked by high rates of employees leaving jobs of their own accord. It began in 2021 in the retail and hospitality industries but soon spread to white-collar work and professional services. Brought on by shifting workplace demands – like the rise of working from home and increased pressure on service workers – the Great Resignation heralded record-breaking quit rates. For example, between April and June 2021, 11.5 million workers quit their jobs, with a further 4.3 million resigning in August 2021 – a quit rate of 2.9%.
Is the Great Resignation still happening in 2022? The answer is a resounding “yes, ” with the voluntary resignation rate still much higher than pre-pandemic levels. Between March 2021 and January 2022, the quit rate hovered around 3%, with 4.3 million workers resigning in January. By October 2022, the quit rate slowed to 2.6%, equating to 4 million workers leaving every month.
Many economists believe the Great Resignation is still ongoing, and they may be right. According to a June 2022 study, 1 in 5 workers will likely switch to a new employer in 2022, and while pay is the top reason, purpose comes in a close second. So, how do businesses respond to this reshuffling of talent? First, they need a deeper understanding of the root cause.
What caused the Great Resignation
Some economists theorize that the economic recession and rebound contributed to the Great Resignation. In 2019, the average quit rate per month rarely topped 2.3%, and in April 2020, it dropped to 1.6%, its lowest point in years. Why? With the global recession casting a shadow over 2020, many employees were hesitant to face the uncertainty that comes with leaving a stable job.
Now, inflation is soaring, and the economy is heading toward recession, so why is the Great Resignation happening in this climate? While it’s true that white-collar and tech industries continue to lay off employees, overall unemployment and layoff rates remain steady, and total job openings are barely affected. Clearly, the labor market remains strong, which is why economists debate whether we are actually in a recession.
Another theory is that the pandemic caused many to rethink their priorities and confront their fear and uncertainty around health, the economy, politics, and the future of the world. The pandemic also woke us up to the gifts of life – we spent more time with our families and started new projects and pastimes that helped us find and follow our passions. Plus, we realized that we have so much to be grateful for, which solidified our resolve to abandon the old working methods.
Finally, the Great Resignation caused a snowball effect. As more positions opened up, more employees entertained thoughts about moving on. With their newfound clarity of purpose, they sought new challenges and more fulfilling work, creating new opportunities for employers to raise their standards and fill their talent rosters with hungry and skilled employees.
What's next for the Great Resignation?
The Great Resignation of 2022 appears to be showing signs of slowing. Inflation hit 7.7% in October 2022, but after a year of increases, inflation is finally trending downwards. That said, layoffs at major tech companies like Meta, Snapchat, and Twitter are making the news, and only 39% of CFOs have a positive economic outlook for the next six months. The loose labor market is one possible answer to the question, “Why is the great resignation happening?” but financial pressures and fear of uncertainty may tighten the market up again.
The Great Resignation will have a lasting impact on the labor market. Employers are learning that workers will reject workplaces that don’t make them feel respected, appreciated, and physically safe on the job. Stand out from the crowd with effective employee retention strategies that make the most of the current climate – in addition to good pay and benefits, create a culture of innovation, establish strong company values and build trust in the workplace by making employees feel safe and appreciated.
Remote work is another trend that will last. Business owners benefit from lower costs, capital expenditure, and employees enjoy short commutes, flexibility, and increased productivity. In a recent study, 42% of remote workers warned that if their company stops offering remote work, they will quit and look for a job at a company that does. Offering remote work or a hybrid work environment can help you stay ahead of the competition. As you transition to the new normal, learning how to manage a remote team is essential.
Tips to make the most of the Great Resignation
Certainty is one of our deepest human needs – which helps to explains why many of us felt lost, scared, and angry over the past few years. Yet moments of enormous change can also present possibilities – if we know how to find them.
Build a rock star team
The job market is currently bursting with employees looking for the perfect fit, and this time. This time, mid and high-level employees are driving the Great Resignation, allowing employers to capitalize by filling their ranks with passionate and experienced employees. Build a team that works now, and you’ll experience the benefits for years to come.
Treat employees like raving fans
The Great Resignation of 2022 isn’t just a chance to hire right – it’s also an opportunity to show your employees why they should trust your business. Raving fan employees are just as important as raving fan customers, so ask your employees for their feedback and take it to heart.
Improve your leadership skills
As Tony often says, a business is only as strong as the psychology of its leader. Great leadership is even more essential during the Great Resignation, so take the opportunity to improve your skills, develop your company vision and lead with a newfound determination.
The Great Resignation is here and it’s real. But there’s no reason to be afraid. True leaders know how to turn obstacles into opportunities and come out stronger from any challenge.
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