Over the past year, North America has seen a seismic shift in employment unlike anything the job market has ever seen. In 2021, more than 42 million employees left their jobs. And between April and August 2021 alone, workers resigned nearly 20 million times, according to the Bureau of Labor statistics. This mass exodus was 60% higher than during the same period in 2020 and 12% higher than 2019. And with nearly 10 million open positions, the trend is expected to continue. While the reasons vary for workers to call it quits and look for greener pastures, a study from Indeed found that 92% of individuals who switched jobs said “the pandemic made them feel life is too short to stay in a job they weren’t passionate about.”
Taking a deeper dive into the reasons why employees are leaving in record numbers can help leaders better understand “The Great Resignation” and help shed light on how to recruit and retain top talent during this employment phenomenon.
Prelude to the Great Resignation
In 2019, the job market and economy were the strongest they had ever been. Companies were investing their capital and consumers were enjoying higher wages and spending accordingly. Because of the high demand for top talent, employees where taking advantage of the market and testing the waters more and more. However, the COVID-19 pandemic put a freeze on the job market, while governments and local principalities induced a forced coma on their economies and communities in attempts to fight the virus. During 2020, companies weren’t hiring or investing in their businesses, and while wages stalled, individuals who were lucky enough to remain employed held on to their jobs remotely.
Yet, a mentality shift occurred as the pandemic ensued. Organizations and employees alike found that productivity wasn’t slipping with a remote workforce. In fact, many businesses were able to function well with a virtual office. A PwC study found that 52% of leaders said productivity is higher since they switched to remote work; moreover, 83% of companies found the jump to remote has been successful during the pandemic.
Likewise, people across the world realized just how short life is as they saw the virus spread throughout communities. The combination of virtual work options with existential realities caused a paradigm shift in the relationship between employees and employers. Loyalty was now contingent on meeting the wants and needs of not just the employer, but the workers as well. Hence, a great exodus of employees to companies that could meet their needs.
Reasons Why Workers Leave for New Jobs
While the age old saying may still be true—people don’t quit companies, they quit people—this employment shift isn’t mainly driven by that reality. Indeed surveyed Great Resignation participants who left their jobs from the beginning of the pandemic, as well as recently. The following reasons are why workers resigned originally:
- Remote Work Opportunities – 45%
- Flexibility to Care for Family – 40%
- Flexible Work Hours – 34%
- Inability to Follow COVID-19 Safety Protocols – 34%
As we entered late 2021, being able to work remotely remained a major factor in shifting jobs; but now, 36% quit their positions for opportunities with higher wages. While remote work and larger salaries have been common reasons for accepting new jobs, a new reason emerged that has never before affected the job market. The third highest reason why employees quit was due to companies requiring COVID-19 vaccines as a condition for employment. Additionally, nearly 17% of employees quit because their companies wouldn’t impose vaccine mandates on their co-workers.
Retaining and Recruiting During the Great Resignation
While the revolving door of talent is likely to continue for the foreseeable future, companies are now dealing with both trying to retain top talent who may be eyeing potential opportunities, as well as recruit talent to either fill vacated positions or expand operations in the growing economy. Understanding the role of both retaining and recruiting should help leaders build a similar approach for both. If leaders are willing to offer specific opportunities or wage increases to recruit talent, then it would be prudent to do the same to retain the loyal employees they currently employ. The Indeed study found that 40% of individuals who have participated in the Great Resignation are currently in positions where they are no longer considering another job switch. These are their reasons:
- Good work-life balance – 56%
- Flexibility in remote work – 46%
- A positive working environment – 43%
To create a retention and recruiting strategy during this tumultuous job market, it’s best to combine efforts. From offering full-remote opportunities and allowing for truly flexible schedules to giving retention/hiring bonuses to keep or attract talent, what it takes to hiring workers during the Great Resignation is similar to what it takes to retain them. The third most popular answer of creating a positive working environment was likewise corroborated by another study showing the difficulty in recruiting talent away from good companies. A recent Gallup poll found that it took a pay increase of more than 20% to recruit an employee away from a job in which the leader created high engagement. So while work-life balance and remote options remain top reasons for employees to accept job offers or stay with their current employers, great leaders still have the ability to factor into the Great Resignation. Yet for some, companies that can offer everything employees are expecting during this job-seekers’ market have the best chance at slowing the revolving door of talent.
What experiences have you had with the Great Resignation? How have you retained/recruiting top talent during this period? Let us know in the comments section below!