The Great Resignation. The Great Reset. The Great Reshuffle.
Whatever you want to call it, companies across the country are faced with a dilemma. How can they attract, hire, and retain employees? In February 2021, Anthony Klotz, a management professor at Texas A&M University, started using the term Great Resignation to describe the large numbers of people quitting their jobs. In April 2021, close to 4 million Americans had quit their job. This trend has not stopped. The Job Openings and Labor Turnover Survey reported that in the eight months leading up to January 2022, monthly resignations exceeded 4 million. Here we are, over one year later, and the issues persist. Companies across America are looking for answers and solutions to this current workforce challenge.
HAVE WE SEEN ANYTHING LIKE THIS IN THE PAST?
Perhaps. The period surrounding World War I and II saw an increase in the number of women entering the labor market to perform jobs that had previously been performed by men who went into military service. When those men returned to work, there was a shake-up in the job market and women sought new opportunities. Another example is the 1990s dot-com explosion. In this case, a new industry brought about new jobs and as a result, people looked to explore those opportunities.
WHY ARE WE SEEING THIS NOW?
So, what is causing this current shake-up in the job market? Many people believe this is a result of post-pandemic uncertainty which caused people to rethink their place in the workforce. However, if you look at data from the Bureau of Labor Statistics, the average monthly quit rate has steadily increased since 2009; on average, .10 percentage points per year. In 2020, the uncertainty surrounding the pandemic made people reluctant to voluntarily resign and the rate did drop. However, 2021 saw the loosening of COVID-19 restrictions and the beginning of return to normalcy, which included the continuation of the upward trend that was seen prior to the pandemic.
Some of the increased resignations can be attributed to retirement. The Pew Research Center reported that in 2021, 50.3% of US adults over age 55 had retired; an increase of a little over 2% from the prior year. However, not everyone is quitting their jobs and opting out of the workforce, which is why what we are experiencing is better termed a reshuffle and not a mass resignation. Willis Towers Watson’s 2022 Global Benefits Attitudes Survey reported that 44% of employees consider themselves “job seekers”. According to National Public Radio, “people are leaving their jobs in search of more money, more flexibility, and more happiness.” And while the resignation trend may have started before the pandemic, there are a few factors that may be unique to the post-pandemic climate. Wages did rise, but they have not kept up with inflation. Also, during the pandemic, many people enjoyed the benefits of remote work and are reluctant to give that up, so they seek employers who embrace distributed workforces. But pre or post pandemic, this remains true: people continue to seek advancement opportunities, they want to be valued, and they place importance on a positive workplace culture.
IS THERE A SOLUTION?
While all this may sound overwhelming to employers, it shouldn’t be too great a cause for fear; a Great Retention is still possible. Savvy employers will use the Great Reshuffle as a driving force to redefine what they bring to the table. So, how can you boost employee retention in the face of the reshuffle? Much of it comes down to engagement. Here are some ways to do that.
Offer Growth Opportunities: How do you show current employees they are valued? Offer them opportunities to grow and advance within the organization. This can be accomplished through multiple strategies, such as job enrichment or job expansion. Job enrichment involves increased responsibility, increased authority (more decision-making power with less supervision), the learning of new skills, and more challenging tasks. If employees are challenged, the lure of a new external opportunity is not as appealing. Job expansion is a similar concept but takes it in a slightly different direction. Job enrichment is considered to be a vertical change, as the level of work and responsibility increases. On the other hand, job expansion is considered a horizontal change. It is the doubling down on the tasks an employee is already used to performing, and is generally represented through an increased number of tasks. This can help show an employee their value to the company. Employees will not only feel valued, but they are also encouraged by the vote of confidence and trust in their skills and abilities.
Elevate Your Company Mission, Vision, & Values: A company’s mission or purpose is a very influential factor that will attract a new employee and provide a reason for a current employee to stay. Prove to your employees that you care about more than just your business’ bottom line; use your purpose to shape what you do and how you do it. Business owners must keep in mind that your company’s mission is what you do now, the company’s vision represents a future ideal state that you’re striving towards, and its’ values are the guiding principles by which all decisions are made. Anyone at your company with decision-making power should always be making decisions through the lens of your company’s mission, vision, and values. (I.e is the decision ethical? Is the decision beneficial to all stakeholders?)
Invest in Employee Well-Being: The wellbeing of employees is not something business leaders can afford to overlook – in fact, it’s more important than ever that employees know that their employer cares about them as an individual rather than just another cog in the corporate machine. Providing mental health resources, offering more paid time off, subsidizing daycare for working parents, and offering flexible schedules will go a long way in retention efforts. Taking care of the employees you have is key. Business owners who prioritize employee well-being quickly begin to see its’ positive correlation with employee engagement and, in turn, a host of other positive outcomes.
Embrace Flexibility: Flexibility doesn’t just apply to remote working arrangements and schedules. It may also mean looking at your current job openings and redefining the qualifications for those roles. There may be a candidate who does not perfectly fit the requirements of a job, but if they are the right culture add, they can become productive and valued members of your team. Managers must be skilled in agile management practices to not only be more mindful and understanding of others whose working style differs from their own, but also so that they bring out the best in each employee.Managers should strive to manage their direct reports in the unique way each employee needs and appreciates, and not necessarily the way the manager thinks is best.
Compensation: In this time of high inflation, businesses need to be paying their workforce appropriately so that their financial needs are met. There are numerous tools that employees can use to learn their market value, so businesses need to regularly review and update overall compensation packages to remain competitive in the job market. If we were to look at compensation in the context of Maslow’s hierarchy of needs, paying your employees a livable wage would be on the same level as other basic needs such as food, water, and shelter. Be mindful of compression and other negative consequences of underpaying your workforce.
The bottom line is that good leadership recognizes that people are their greatest asset. The challenges faced during this Great Reshuffle offers organizations the opportunity to grow and reinvent themselves. Take the time to look at your organization and find the ways that you can better your company culture, strengthen employee relationships, and become an industry leader. Please reach out to us if we can help you accomplish these goals.