Jeremy Scott
Manager
West Palm Beach, FL
888-991-PEOS
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Is 2021 the Year of the Resignation?
Jeremy Scott • Oct 22, 2021
What Does the Great Resignation Really Mean?
If you have not already noticed that more people are leaving their jobs than usual, you likely will soon. In April alone over 4 million workers got up and quit. Now there a number of factors this can be attributed to, most of them stemming from Covid related reasons. It may be that some people are realizing in this pandemic that their life is more finite than they thought so they would rather pursue what is really important to them or it may just be that people are looking to change after so much time in lockdown.
The "Gig Economy" is certainly having an impact but it is important to note that in 2020 a
record number of small businesses
were created. As technology improves it is possible that companies will not only compteting with each other to attract top talent, but also with a candidate who weighs the freedoms of being self employed with the advantages of being an employee.
Microsoft recently released its
annual work trend study
where they surveyed over 160,000 employees from countries all over the world to find out exactly what they think about their jobs, workplace, and leadership. The study certainly had some interesting findings, including that nearly 40% of all workers are currently considering quitting their job. This statistic may sound freighting, markedly so. If 40% of the workforce was to up and leave their jobs tomorrow there would be some serious repercussions for business owners and employees alike. So why should you not be worried?
Why You Shouldn't Be Too Worried
40% of people quitting their jobs is unrealistic and here is why. This statistic was derived from an anonymous survey which only asked, “would you consider leaving your job in the next 12 months”. A lot can change in a year whether it be in respect to relationships, finance, or health. All these somewhat unpredictable factors can severely influence someone’s decision to leave a job in the next 12 months. Knowing what the statistic is based on makes it seem a lot more realistic that 40% of people selected yes. News media outlets have largely sensationalized this number, but that doesn’t mean you shouldn’t be worry free.
Compared to last year or even the year before the 4 million people resigning in a single month isn’t too surprising. What is surprising is that this number is almost double what it was a decade ago despite the total amount of employed people largely remaining the same.
The game has changed. Employees are leaving their jobs not only to find either more accommodating or better paying jobs elsewhere, but also for a culture fit and expanded employee benefits. Retaining top talent is harder than ever and employees have accepted that loyalty is not valued highly in the current market. This means that businesses now more than ever need to focus on retaining their top employees to stay competitive.
Studies from Harvard Business Review indicate that when promotions are managed effectively employee turnover rates are cut in half compared to others in the same industry. Other metrics from productivity to innovation also see significant improvement when promotions are handled properly in a company. It’s clear that showing your employees that they are valued matters, but for many they will want to know that there is a clear path for advancement and taking on more responsibility. For those looking for long term fits in their current roles they want to know the company is putting them in a position to have a secure retirement, freedom to enjoy time outside of work, and a rich benefits plan. Employees now more than ever are prepared to leave their jobs if they don’t find that is the case. All that means is even higher expenses for businesses trying to make up for lost talent.
What Businesses Can Do To Protect Themselves
The answer to this question is fairly simple. Companies need to decide where they can make the adjustments their employees are coveting as well as get feedback from candidates they are pursuing. This will allow them to uncover what benefits and culture adjustments their employees value most. It might provide a slightly higher upfront cost to implement changes or increase employee benefit offerings but taking these precautions could save multiple times the amount invested due to lower turnover and higher productivity.
Providing employees with a more flexible work life balance combined with higher pay will earn their respect making them even more loyal to your business. Some of the benefits employees are coveting the most currently are Flexible Time Off, Remote Work when it is feasible, Group Health Insurance, Retirement Plans, and Defined Paths to Career Advancement.
Big companies like
Goldman Sachs
are already taking steps in this direction along with attempts to reduce hours worked by employees. Industry leaders are setting the pace. It’s time to act before being left behind.
Involve Your Team
As you can see there are a lot of moving parts. This is why I recommend having at least two people on your leadership team on this project. From my experience too many important details fall through the cracks when one person is left to juggle all aspects of the evaluation.
It’s also smart to involve a trusted business advisor which might be a strategic financial consultant, a business consultant, your
health insurance broker
or a
PEO Consultant.
About the Author:
PEO Focus, an HR and Employee Benefits Consulting Firm was named the Best Employee Benefits Consultancy for 2024 in the state of North Carolina.
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