Navigating the ‘Great Resignation’
Navigating the ‘Great Resignation’
Industry Experts Weigh In With Recommendations
In April, nearly 4 million people quit their jobs. According to the Bureau of Labor Statistics, it’s the highest quit rate they’ve reported in more than two decades. Workers in industries that typically have a high level of turnover, such as retail, warehousing and food service, quit in large numbers.
The number of job postings also hit a record high, with 695,000 more open positions than unemployed workers. Headlines, backed by recent labor studies, say it’s the summer of quitting. But why?
Anthony Klotz, associate management professor at Texas A&M University, recently coined the phrase ‘the great resignation’ during an interview with Bloomberg Businessweek. He predicts that people who stayed put during the uncertainty of the pandemic are getting ready to jump ship. And a study by Microsoft found that 41% of the global workforce would consider leaving their current employer within the next year.
Brian Kropp, Chief of Research for Gartner’s HR Practice said, “We’ve gone through in the last 14 months the biggest experiment in changing work that we’ve ever had. But what we’re going to experience across the next 14 months is actually going to be even more disruptive and a bigger shift and a bigger change.”
More headlines and data that have businesses across the United States bracing for another wave of labor challenges. So—what can businesses do now to combat looming labor issues while preparing for the bumpy road ahead? We dug into the latest labor research and headlines to see what experts are saying.
1. Offer Bonuses & Incentives
Businesses are battling to attract workers as the economy roars back to life. Their latest weapon according to Indeed: a slew of hiring incentives.
The share of job openings touting incentives—ranging from signing bonuses to retention payouts has doubled since July 2020, according to Indeed. The share began to steadily climb through the spring, the same time hiring unexpectedly slowed and narratives of a labor shortage emerged.
Ann Elizabeth Konkel, an economist at the Indeed Hiring Lab, says the bonuses are a win-win in the current labor market. Job searches for hiring incentives have leaped 134% since the start of 2021, reflecting the broad desire for more attractive openings.
The incentives are also appealing to businesses. Instead of offering permanently higher wages or paid time off, employers can boost hiring with one-time bonuses she said. Businesses falling behind in the rehiring race may need to “consider offering candidates something upfront,” she added.
2. Get Creative with Recruitment
A mix of recruitment strategies can help alleviate labor shortages in significant ways. Staffing Industry Analysts report that some of the quickest and most impactful solutions involve making changes to the recruitment process—such as adding or modifying employee referral programs, contracting with staffing firms or implementing technologies to streamline recruitment.
Another strategy is to expand into new recruitment demographics, populations and geographies. When you create a more diverse, equitable work environment, it not only widens the pool of people from which you can hire, it also adds a wealth of new perspectives that can strengthen your business. Wider pool, more candidates, better hires.
3. Create the Best Employee Experience Possible
Elizabeth Mygatt, Associate Partner at McKinsey & Company, frames up the current labor climate perfectly: “As we think about talent, the big theme here is recognizing that talent is, in fact, a scarcer capital than financial capital. It used to be that you could get the talent you needed, but financial support was hard to come by. Now it’s largely reversed. For most organizations you talk to, what’s top of their list? What keeps them up at night? It’s the question, “Do we have the talent to deliver on our strategy, to meet our customers’ needs?”
Companies know that a better employee experience means a better bottom line. Successful organizations work together with their people to create personalized, authentic, and motivating experiences that tap into purpose to strengthen individual, team and company performance.
Mygatt says the HR team plays a crucial role in forming employee experience. Organizations in which HR facilitates a positive employee experience are 1.3 times more likely to report organizational outperformance, McKinsey research has shown. This has become even more important throughout the pandemic, as organizations work to build team morale and positive mindsets.
4. Make it Easier for Employees Who Commute
A recent article by Harvard Business Review showed that when it comes to hourly workers and lower-salaried positions, accessibility is one of the biggest—and often underestimated—drivers of effective recruiting. Research has shown that minor geographic differences in available talent and open jobs, even in the same city, can lead to higher unemployment.
Look at ways of improving accessibility and other ways of reducing commuting time. Structuring your 40-hour workweek as four shifts of ten hours each, instead of a regular five-day workweek, will reduce the time your workers spend commuting by 20 percent. Moving a shift’s starting time away from rush hour widens the set of home residences that can reach your establishment in a given driving time.
A successful recruiting strategy starts with acknowledging that you won’t solve your current hiring challenges by applying the solutions of the past. This is the time to revisit your previous underlying assumptions, stress-testing them one by one.
5. Fill Gaps with Freelance and Gig Talent
Employers need to realize that the labor landscape is changing. Cassie Whitlock, head of human resources for the talent management software platform, BambooHR, says many businesses optimize hiring employees who will stick around as long as possible. However, we now know that talent is looking for something else: flexibility and freedom. So it’s not surprising that a recent survey reported “three in five people said they’d stop at nothing to become their own boss.” Evidence that shows new ways of working are here to stay.
Creating fun days in the office, adding ping pong tables to the break room and perks like all the chocolate you can eat isn’t going to get people to stay—Whitlock says it goes much deeper than that. “Start the conversation about creating a blended workforce utilizing a mix of full-time people and independent contractors.”
As people move toward work/life integration, organizations that support them will be in the best position to retain their workforce. “Employees now know you don’t have to give up one for the other to be better,” says Whitlock. Organizations have an opportunity to step up and bring everyone together and build on the good things that have come out of the pandemic.
