The Great Resignation: What it is and what you need to know

What is the Great Resignation?

The Great Resignation is the ongoing trend in which employees voluntarily resign from their jobs in droves. This trend started in early 2021, and it looks like it’s not going away anytime soon.

According to a US Bureau of Labor report, 4.3 million employees quit their jobs in August 2021 alone – recording a 242.000 increase from July. This record-breaking quit rate has not been since in the US since 2000, as noted by Lawrence Katz, an Elisabeth Allison Professor of Economics at Harvard.

What you need to know about the Great Resignation

Why are employees quitting? The main drivers behind this movement

A study by Harvard Business Review noted that there are five factors that drove the Great Resignation. These factors, combined with the pandemic, were the main reasons why we’re currently facing these labor changes.

These factors are the five Rs: Retirement, Relocation, Reconsideration, Reshuffling, and Reluctance.

Let’s discuss each factor, shall we?

●      Retirement. In 2021, older employees decided to leave their respective jobs at a faster rate. Probably induced by the pandemic, studies show that these employees decided to spend more time with their loved ones and focus on their personal lives. Not to mention that they’re also keeping themselves safe since they’re more susceptible to COVID health risks.

●      Relocation. The quarantine period by the start of the pandemic urged employees to stay with their loved ones. Some workers moved across states, others stayed within their state but in a different city, while a few decided to pursue being digital nomads. Whatever their reason behind the relocation, it played a part in employees quitting their jobs to find ones that better fit their new lifestyle.

●      Reconsideration. Being stuck for at least two months at home caused people to reconsider their employment. Those that have been experiencing burnout for quite some time may think that it’s time to leave, and others may look for other companies that place importance on work-life balance. Employees had a shift in perspective, which urged them to submit their resignations.

●      Reshuffling. Lower-wage industries like food services and accommodation recorded the highest resignation rates. This is likely because of employees looking for higher-paying jobs in other sectors.

●      Reluctance. Two years into the pandemic and experts are still discovering new variants of COVID-19. A survey by Pew Research Center revealed that 64% of the respondents are uncomfortable to return to the office due to COVID risks. Many research studies also revealed that employees are willing to quit if their companies wouldn’t allow a hybrid work option.

In addition, Professor Katz said, “Historically, people are much more willing to quit their jobs when there are a lot of job openings. And what we’re seeing is a record level of job openings.”

It’s a cycle. We’re seeing record level of job openings because we’re also seeing record level of resignation rates.

What Gen Z and millennial employees want

Did you know that around 40% of Gen Zers and 24% of millennials would like to leave their jobs within two years? Deloitte surveyed 14,000 Gen Z and 7,400 millennial employees around the world, and here are the results:

●      Younger people mainly resigned from their jobs to get better pay. Second and third reasons are unhealthy workplace environment and burnout, respectively.

●      Around 75% of Gen Zers and millennial employees prefer hybrid or remote work arrangements.

●      They’re willing to reject offers if the company’s values don’t align with their personal values.

●      The younger workforce value companies that care about issues like climate change and mental health.

How to beat the Great Resignation

Adobe conducted its own study, which revealed that 56% of Gen Z employee respondents plan on quitting their jobs this year. What can you do to beat this trend?

Here are some tips:

Be transparent with your employees

Transparency is the new normal.

Whether it’s an open-door policy, an employee performance review, or a conversation about compensation, sharing information with employees makes them feel like they’re being heard.

It also builds trust and fosters a sense of community within the company. This allows for more productive work environments, which ultimately leads to better results for the business.

Employees want leaders who will tell them what's going on, so they don't have to guess or fear the worst when bad things happen. Transparency also builds trust among coworkers and managers by making sure that everyone understands their roles and responsibilities, as well as how they fit into the big picture of the organization's goals and objectives.

Here are five other ways transparency can benefit your business:

1. Employees feel they're part of the team
2. Employees have more trust in management
3. Employees will work harder for you
4. Employees have more respect for their company
5. Employee satisfaction increases

Provide hybrid work options

The business landscape has changed dramatically over the past few years, and with it, so have the demands on employees.

Companies are now competing for talent by offering a variety of work arrangements that cater to the needs of millennials, Gen Xers, and Baby Boomers alike. Employers must provide more than just a paycheck to retain top talent. The best way to keep employees engaged is by allowing them to work remotely or on a flexible schedule.

Here are some benefits of this type of work arrangement:

●      Employees can better handle their time and their workload

●      Employees feel trusted

●      Employees have more flexibility, making them happier with the company

At the end of the day, people work because they want to be happy. And if you can’t make them happy at work, then they will look elsewhere.

Are there benefits to the Great Resignation?

The Great Resignation mostly benefits the employees. But as we investigate, are there any Great Resignation benefits for employers?

If we try to look at the bright side, of course, there are! Here are some of them:

Newfound employee appreciation

The mass resignation was somehow caused by employees feeling unappreciated and undervalued by their employers. This led to a huge shortage of employees, which forced employers to reconsider their attitude toward their employees.

As a result, employers started treating their employees with newfound respect and appreciation. Businesses have also started giving them better compensation packages and benefits than before, as well as hiring more employees to compensate for those who had resigned.

Chance to overhaul/improve processes

This unexpected trend gave companies the opportunity to improve their current HR practices. Since companies are now the ones chasing employees, they need to provide the best employee experience – starting from recruitment and onboarding.

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