The US economy continues to be as strong as ever, we’re down millions of workers, and the shortage and lack of ability to fill jobs continues to be perplexing for most organizations. In the search for answers, questions come up – can it be attributed to COVID-19? Is it spurred by early retirements? Or are workers simply just giving up on work? The one thing we know for sure is that companies are losing staff. Struggles to hire are leading to burnout and high anxiety in those who remain. Enter “The Great Resignation.” This term was introduced in 2019 by Anthony C. Klotz, a professor at Texas A&M University. He predicted that, “workers would start to resign following the pandemic as burnout and working remotely trigger a shift in people’s identities.”
Alarming Statistics to Consider
According to the U.S. Bureau of Labor Statistics, 4 million Americans quit their jobs as of July 2021. Resignations peaked in April and have remained abnormally high for the last several months, with a record-breaking 10.9 million open jobs at the end of July. There are even more alarming statistics that different surveys and studies are finding. Here are a few:
- According to the Bureau of Labor Statistics, resignation rates are highest among mid-career employees.
- 41 percent of the global workforce is considering leaving their job, reasons cited included burnout, fear for personal safety, dissatisfaction, and a shift in priorities. (LinkedIn)
- Only 20 percent of the global workforce Is actively engaged (Gallup State of the Global Workplace).
- Americans value workplace flexibility (56 percent) more than higher pay (53 percent percent) and job security (47 percent) (Job Seeker Survey in August 2021).
- Digital overload continues climbing as high productivity masks an exhausted workforce. (Prudential)
These are just a few outcomes many of us have seen. The reality is there is change happening and organizations are trying to get their arms around what’s causing it. Why is it happening? What can they do about it? How do they stop it? The key is identifying the core causes and what is driving this phenomenon.
What Is Driving This Extreme Mobility?
Depending on the resources you rely on, the reasons why this is happening continue to evolve. Let’s review some of the most often cited reasons people believe the great resignation is happening.
Unemployment Benefits: Higher unemployment benefits were offered through September of 2021. People took time off, received additional cash and have saved a lot of money. This resulted in the decision to take a little extra time off before they get back into the workplace. This reason certainly has had an impact on employment, but there are clearly other factors impacting the desire for people to change jobs or stop working completely.
Salaries and Wages: Compensation is often a big factor in people’s satisfaction with work. Post unemployment benefit increases, going back to work and being paid less is unattractive, especially to those working in the restaurant, retail, and hospitality industries. The argument around increasing the minimum wage has been going on for several years and with opportunities for workers to change jobs afforded by the increased availability of jobs in our workplace, more and more people are deciding to decline lower paying jobs as they search for something better.
Lots of Opportunities: There are more job opportunities then there are workers to fill those jobs. Many years ago, the term “war for talent” was established and now, I believe more than ever, there truly is a battle to attract and retain talent.
Limited Care Resources: Another common theme is low availability of services to accommodate either child or elder care. People have learned to manage care at home while they work remotely, thereby creating new routines, while lessening the financial burden on many families. Couple that with the scarce availability of services due to open jobs and lack of talent in the industry. In addition, some services have just simply not reopened / resumed.
Aging Workforce/Early Retirement: An emerging topic, talked about for several months, is the belief people who are closer to retirement are not happy in their current job and have started to consider retirement earlier than originally anticipated.
What Can We Do About It?
Doing nothing is not an option. And there really is no genie in a magic bottle that can help solve this once-in-a-lifetime challenge. Organizations are trying everything they can think of to address talent gaps. Things like offering work from home flexibility and sign-on bonuses are some of the common solutions that organizations have tried over the years. Some are starting to hire on the spot and take steps like expediting applications and bypassing their traditional interview processes to make a quicker offer and capture talent before they accept offers from other organizations. We are also seeing an increase in counter offers by organizations to keep their employees. In the short term, some of these may work but organizations do need to be cautious of the long-term implications to their organization.
There are tactics that organizations can take to help mitigate the challenge. Here are a few.
In the rush to hire new talent it’s important not to forget to develop tailored retention strategies for your organization. These strategies need to be focused on some of the core issues and root causes of either turnover or inability to fill vacant positions. They can’t be a flavor-of-the-month program that every other organization has tried simply because it seems like a good idea.
Increase your focus on not only engagement, but the well-being of your employees – specially the financial, physical, social, and emotional elements of well-being. Anxiety, stress, and burnout is dominating the workplace. Equip managers, especially those in the middle of the organization, to have these important conversations with their people. They must seek to understand, focus on strengthening relationships, ask questions and become a resource for members of their team.
Slow Down and Reset Time Requirements
Organizations and hiring managers need to resist the urge to move quickly and hire impulsively. When we start to rush our hiring practice, we start to make errors that we have learned to address from the past including lack of diversity in the workplace, lack of cultural fit and hiring talent that doesn’t have a long-term positive impact on the organization. There’s going to be pressure to move quickly and fill gaps especially when it comes to hiring a diverse workforce. Be intentional and make good hiring decisions. Quality in a long-term sustainable pipeline must be the priority not urgent short-term needs.
Reframe the Organization
Now is the perfect time to look at reframing your organization. Using proven organizational design principles, align overall strategy, business processes and structure that will result in a sustainable, high-performing organization. In these times we try to rush and fill the current organization when we really should be rethinking the framework and what success looks like in the organization based on the corporate strategy – then hiring for the skills and roles we need.
Assess Your Hiring Practices
Rethink how you identify, select and onboard talent. Most organizations want to hire talent that’s ready to jump in and start performing immediately. This leads to longer hiring timelines, higher compensation levels and lower long-term retention. Start to look at recent college graduates and non-traditional talent. This will require managers to do more coaching and training, but it will be fruitful for the organization in the long-term.
Contact us to learn more about how LAK Group can help transform your leaders into talent magnets and better position your company’s ability to establish a diverse internal pipeline of talent.