‘The Great Resignation’ is a phrase cropping up with increasing regularity across social media platforms, the HR community and, most alarmingly of all, amongst employers.
So, what is it and how is it impacting the UK employment market?
We know that more and more individuals are seeking greater ‘meaning at work’, or looking to increasingly align their personal values or ‘world view’ with an employing organisation’s mission and purpose. It’s not a new concept by any means and many individuals have already chosen to pursue this course – to paraphrase ‘….if your approach as an organisation doesn’t give me what I need, then I’m ‘outta here…’.
However, the ‘great resignation’ is an accelerating trend and one that is likely to cause some real challenges for those employers unwilling, or unable, to accept the fact that the world of work (as always) is undergoing rapid evolution.
What’s driving the ‘great resignation’?
Five key themes seem to emerge as to why people are suddenly ‘handing in their notice’.
1. The pandemic has cast an unflinching eye on an individual’s relationship with their employer. How employees were treated during the pandemic, and indeed how they are being treated as the transition back to normality resumes, has determined the level of engagement across the organisation. This is primarily a leadership issue and, in some cases, has highlighted either a lack of flexibility in how the employer has dealt with certain situations, or, more commonly, a failure on the part of leaders at all levels to recognise – and then act on – the changing needs and wants of their employees. Does the employee feel valued; are there development opportunities; is the employer’s organisational culture still relevant? The reality is that too many organisations are coming up short; leading to further departures. Any organisations and leaders that do not recognise these challenges are in for a tough time.
The global pandemic has caused many people to re-evaluate their broader approach to work; and how this impacts both their career aspirations, and, more broadly, their life goals. For some, time spent ‘working from home’ during lockdown has been a welcome relief from the stresses and strains of commuting and heading into crowded city offices has not been missed. It has given people time to reflect on how they want to live their lives as well as determining what’s important and what is not. The pandemic has acted as a catalyst around health and wellbeing issues and ‘family time’ is once more genuinely at the forefront of peoples’ minds. This refocus also links to the way Millennials have been approaching work – a greater focus on experiences than the acquisition of tangible assets. Taken together, some in our workforce have found a different approach to – and understanding of – work and how it fits into their lives. Few will ‘go back’.
2. The growing realisation that alternative careers are available is also a key driver in the ‘great resignation’. Many workers who were impacted so severely across the retail, leisure and hospitality sectors have found that alternative work is available, at comparable pay and with significantly less unsocial hours. It’s why we are seeing chefs become van drivers or workers in the restaurant trade move into call-centres. The haulage industry is another where poor conditions, low pay and a lack of succession planning (amongst many other issues) has created an alarming crisis that we are all having to deal with. We all have unused skills and abilities and understanding how to corral these and apply them to alternate career paths is starting to take hold.
3. Too many staff are languishing at work and heading imperceptibly for the exit. Whilst these ‘resignations’ may be deferred, they possibly have the greatest impact on an organisations future success. ‘Languishing’ – with employees feeling disenfranchised, empty and stagnant -is not where we want our people to be. Equally, survey after survey has found that increasing numbers of employees do not feel engaged in the work they undertake – so whilst not actively looking to move (yet) – they’re either biding their time until an interesting opportunity presents itself, or have resolved to maintain the status quo despite misgivings; neither ‘in’ nor ‘out’ of organisation. They are the 45-60% of staff reportedly ‘looking to change job’ in the coming months – languishing and, disengaged employees are a toxic combination.
A lack of career development opportunities is often discussed as part of an exit interview, but rarely acted upon. It’s typically quoted as one of the top 3 reasons people opt to leave their employer and continues to drive resignations. Millennials and Gen Z employees will think nothing of frequent role changes to advance their careers, this is well documented. However, even older workers who we all believed to be more likely to stay longer with their employer are now following suit. constant change initiatives and increased pressure to perform is driving an increasing regularity of job-swapping across all generations. Career development is an easy area to overlook, especially when it is linked to any of the other reasons given at exit interviews.
With over one million vacancies in the UK – and almost all sectors across the economy pointing to shortages of staff as an emerging business ‘threat’ – looking to stem the tide of resignations demands immediate attention.
Research by the Society for HR Management, amongst others, has pointed to the ‘true’ costs associated with employee departures. Whilst the cost of replacing an employee is estimated to be between 50 and 75% of that employee’s base salary (when recruitment, training and onboarding costs are taken into consideration) the overall costs to the business can be anywhere between 100 and 200% of that employee’s salary (lost commercial opportunity, rebuilding relationships and time taken to genuinely ‘add value’ within the role). Organisations incurring those unforeseen costs on a regular basis will quickly see profits begin to evaporate.
So how should employers respond to the great resignation?
Whilst it is not easy to stem the tide of resignations, there are practical steps that organisations can take to reduce them.
1. Develop Leadership Skills
Too many leaders have insufficient preparation and training to take up more senior roles – particularly if that involves a role more skewed to managing people. Whilst many succeed many struggles; and by extension negatively impact the belief, drive, motivation and even career prospects of their teams. Having leaders who are able to balance achievement of organisational goals alongside the ability to empathise, encourage and drive their teams to ‘do more, better and faster’ – even in the face of evolving uncertainty and change is a valuable and much sought-after set of attributes. Leadership development can help ‘cover the basics’ and will enable people to understand elements of a leadership role. Ongoing investment in interventions such as coaching can support those further up the hierarchy. It’s a straightforward step and a relatively simple investment case.
In a world filled with staff surveys, engagement polls and feedback mechanisms, it’s easy to forget that what most people value is an opportunity to talk frankly with their line manager about how their role is progressing. Making time to do this is difficult in today’s business environment- but it remains essential. If people don’t have the opportunity to discuss their role, how they are feeling, or where their next move might take them, then ‘working elsewhere’ becomes an attractive prospect. It’s the ‘grass is greener’ syndrome and can cause some organisations to haemorrhage talent unnecessarily. Mentoring programmes can also work well.
3. Respect, Appreciation & Inclusion
Taking time to genuinely acknowledge peoples’ efforts can have a galvanising effect even in the most difficult of circumstances. As business pressure increases, as resources become stretched and as change intensifies, a note of ‘thanks’ can go a long way. All workers – at whatever level – will have a range of internal (work) and external (home) factors encroaching upon their performance. Having due respect and understanding for the individual employee and their specific set of personal circumstances can help address early signs of stress, burnout or simply a growing sense that ‘moving on’ may be the right thing to do. Ensuring that the organisation adopts an inclusive culture is more important now than it ever was. Good leaders, as well as organisations, ‘connect’ with people and small changes in the approach can both drive loyalty and bind the team to a cohesive purpose.
4. Supporting Careers
For many organisations promoting career opportunities is the best way to retain talent within the business. There are inherent challenges in raising career expectations for employees – often overstated by line managers – however this approach remains one of the best motivators for people to remain with their current employer. From ensuring that skills and capabilities are understood, seeking to align these with existing or future developmental opportunities, finding an internal mentor or external coach or having open conversations around career aspiration – all will demonstrate to the employee that their current employer is taking their career seriously. Career activism is alive and well and unless the employer adopts a robust framework to help channel and manage individual ‘careers’ then your people will take their skills to your competition.
Each employer will face their own challenges. Some may not be easy to address – with competition, internal resource or organisational activity all impinging upon ‘how far and how fast’ an organisation can change. However, with managerial resources increasingly focussed on ‘replacing and rebuilding’ as opposed to ‘growing and developing’ its talent, business opportunity falls by the wayside, in some cases, never to recover.
Now more than ever we need to practice what we preach, that ’our people are our greatest asset’ and with the ‘who’, ‘what’, ‘where’, ‘when’ and ‘why’ questions surrounding career not going away, we – as employers – need to be ready to respond convincingly.
INTOO’s latest guide to career development, provides detailed practical advice on how organisations, managers and employees can work together to bring career development to the forefront of your people strategy in order to drive business success – reaping the rewards at individual, team and organisation-wide level.
Download your copy of our guide ‘Career Development – The Silver Bullet to Employee Attraction, Retention & Engagement’ by clicking on the button below.