The Great Resignation: Lessons Employers Have Learned — Plus Ways to Combat It
The Great Resignation has had a significant impact on businesses and the economy. Find out what lessons employers have learned from it.
Thanks to the pandemic that has ravaged the world for a little over 2 years, people are more aware of their rights as workers and what they want out of life. There has been a marked shift in employee mindsets as many prioritize personal happiness and well-being over money or a step up the corporate ladder.
This caused over 47 million people to resign from their jobs in 2021 — an event that’s known as the Great Resignation. It’s shown that employers can no longer get away with providing their staff with subpar work culture, harsh conditions, and bad management. It’s time for managers and bosses to step up or forget about running successful businesses.
The unemployment rate in the United States is low competitively to previous years. The number of new businesses and companies is increasing, creating a huge employment gap in industries.
Employees quit their jobs for many reasons. Some may have personal issues, while others may have planned to leave long before the pandemic hit us. Many people quit their jobs to start their businesses; it is also one of the reasons for increased employment opportunities.
Either way, the Great Resignation has had a massive impact on businesses and the economy. Here are some lessons employers have learned from it.
Why employees resign from their current workplace
During the Great Resignation, people resigned from their current workplaces. These reasons are warning signs for any organization; if they don’t take notice of these signs, it can have a long-lasting negative impact on the business.
Employers must lookout for these signs, as they played a large role in the Great Resignation. Here are some of the common reasons.
1. Toxic workplace environments
62% of the workforce is resigning from their current employer due to toxic work culture.
A toxic environment is bad for business. According to a study, 62% of the workforce is resigning from their current employer due to toxic work culture. It is still the number one reason for people to quit their jobs.
Various social platforms are connecting people. Once the word is out in the market about the company’s toxic work culture, it can be hard for them to get valuable employees. It can even cause them to lose sales and clients.
2. Employees feel underpaid
Paying employees less than the market rate is damaging in the long run. The 2nd most popular reason for leaving the job is underpaying employees, and 56% of employees quit their jobs because they feel underpaid.
The post-pandemic world opened many opportunities for people. The race to get better talent involves providing higher salaries, which many people don’t hesitate to accept if offered.
3. Underappreciated and overburdened employees
Appreciation plays a vital role in boosting employee morale. Ignoring employees’ hard work, not appreciating them for their achievements, and not recognizing their contribution or value addition to the company makes employees undervalued.
Underappreciated employees get unmotivated to work in the organization. Lack of recognition is considered one of the major reasons an employee would switch their job to go to a place where they believe their efforts will be appreciated. Due to the lack of recognition, employees start losing productivity which affects their work.
4. No work-life balance
Work-life balance is one of the core objectives of companies in the current times, but employers who overburden their workforce and force them to do overtime are likely to lose their workforce. According to The American Institute of Stress in 2019, 94% of Americans report having stress in their workplace.
Poor work life balance includes too many working hours, less time for family, and not enough flexibility at the workplace. This can lead to stress, anxiety, and other mental health issues for your employees. Lack of a work-life balance is one of the top contributors to the Great Resignation.
How businesses are affected by the Great Resignation
When the Great Resignation comes, it has a significant impact on the employers. During a mass resignation event, many employees resign simultaneously or within a few days of each other. In India, over 800 employees of a tech company quit their job when they were asked to return to the office and end work from home.
This is a sudden shock for the organizations that brace themselves for the fact that soon there won’t be anyone left to do the jobs.
This workforce can include high position employees and essential employees handling critical tasks in the business. However, the consequences of the Great Resignation are more devastating for the company.
Mass resignation creates many vacant positions in the company, disturbing regular operations. This results in employee overburden, where the remaining employees are required to accommodate for the lost staff by staying late or working more. Excessive work can lead employees to burnout and a decline in their performance.
The other way is to allocate resources to HR and hire a competent team to fill the gap made by resigning employees. This method also has some drawbacks. Due to urgent hiring, quality is compromised, and urgent mass hiring is costly for any business.
What precautions employers can take to avoid the Great Resignation
The traditional employee and employer relationship no longer work in 2022. The Great Resignation shows us that a knowledge gap exists among the employers, and it is also one of the reasons for the Great Resignation.
Employers must realize that COVID-19 has changed the working methods of organizations significantly. Working from home was not a common practice before COVID. Apart from working from home, some changes may be irrevocable, so they must develop new policies. It is better to catch the symptoms of Great Resignation early in your firm and take necessary measures to avoid it; this will save you time and money and creates employee commitment.
1. Create a flexible work environment
People have realized a strong connection between their work and private life. Work-life balance has become an essential aspect of our lives. Post-pandemic work has implemented significant changes in working modes.
Things have changed; working from home has made employees’ lives easy, allowing many to care for their house, family, and pets while working. Companies should provide flexible working hours and operating modes to their employees to keep them satisfied. That being said, the luxury of working from home also comes with its drawbacks. According to a study, people working from home have longer work hours.
So, a flexible working environment helps in improving productivity, retention, and a stress-free work environment. Moreover, it attracts a valuable, quality workforce.
2. Create conversations
Productive conversations always help in creating new ways of solving problems. Employers should create an open communication environment where everyone is free to share their thoughts, ideas, issues, and queries with their superiors. Ask your employees from time to time about the work environment, their relationship with their managers, and their work-life and mental health.
Employees are more satisfied when bosses care about their well-being; this motivates them and encourages them to provide value to the company. Frequent conversations can help in employee development and motivate them to stick around.
That’s why managers should personally check on their employees. It’s not necessary to have a formal meeting for employee feedback; instead, use informal modes of communication. A manager can invite their employees to coffee or lunch to discuss regular work or personal life. Asking employees about their discomforts reduces the chances of them resigning.
It’s not necessary to have a formal meeting for employee feedback; instead, use informal modes of communication.
3. Offer career development and opportunities to grow
Growth and learning are important factors for employees. Several people looking for a job often analyze the firm’s growth opportunities and personal development.
Today’s employee looks for long-term stability. Employers who cannot provide growth or development to their teams are at risk of losing them.
Even if an organization cannot offer much growth, it still can provide personal development and skill-enhancing programs to its employees. Many will embrace learning new skills that benefit them and their employers both.
4. Offer financial well-being to employees
Financial benefits are the attention of employees’ eyes. Businesses that offer a wide range of benefits to their employees have a more dedicated workforce that works hard to achieve bonuses and commissions. After low pay issues, fewer financial benefits also play their role in employee resignation.
Notable benefits include providing employees with health insurance, car, corporate home, bonuses and commissions, compensation for extra work hours, and paid time off. All these types of benefits attract and retain employees.
5. Offer physical and mental well-being to employees
It is good news that companies are now focusing more on the importance of employees’ mental health. Mental well-being is vital for both the business and employees. Working extra hours creates stress, anxiety, and other serious mental health issues which can be harmful to employees. Companies that fail to offer mental health well-being have vast chances of employee resignation.
To foster well-being, it’s a good idea to:
- Create well-being programs like sports activities
- Give realistic deadlines
- Offer paid leaves
- Have small team dinners or lunches
- Allowing employees to work from home
Great Resignation is avoidable
Employee retention is necessary for businesses to avoid the impact of the Great Resignation. Recovering from the Great Resignation can take time, money, and reputation management efforts to keep the candidate pipeline flowing. If an employer sees themselves facing the effects of the Great Resignation in the future, they should immediately take the above-mentioned steps.
It’s a better strategy to be proactive and scale your company culture to find avenues for improvement.
Businesses can secure their talent by identifying the causes and symptoms of resignation and taking immediate action using the aforementioned practices.