The Great Resignation: Why Millions of Employees Are Saying, “I Quit”
In recent months, resignations have accelerated at an alarming rate within organizations across a wide range of industries, leaving many business owners to grapple with the ever-expanding challenge of maintaining and supporting a high-caliber workforce.
During a presentation last month, Sean Keating, Founder and President of Oggi, outlined key factors affecting the current state of the labor market and what business leaders can do to better navigate today’s climate as we head into 2022 and beyond.
Here is a closer look at the highlights and findings Sean shared as well as a link to the full video.
The Current State of the Labor Market
Supply and Demand in the Free Market Economy
We saw a record number of resignations during August of 2021, with the number of workers leaving their jobs voluntarily increasing by 61.8% year-over-year – a figure that equates to 4.3 million employees. Healthcare, social assistance, food and beverage, and hospitality have been the industries most affected, although the impact has certainly been felt across the board.
We have also been seeing a decrease in the number of professionals graduating to support the economies within finance, accounting, and engineering, where not enough has been done to offset population growth and retirement to bolster these industries. There are many variables going into this, but the deficit in these fields has been growing for years due in part to a shift in people opting to chase what may be a dream career (e.g., video game development) rather than one that will simply support a family or a leisurely lifestyle.
Two Decades’ Worth of Retirees
When we think about baby boomers and the current group close to retirement, we often forget about the fact that many of these people have been ready to retire for almost 15 years. Many were ready to retire in 2007 and 2008 before the recession and other factors forced them to keep working. An increased life expectancy for some people was also a contributor, where having enough money to live comfortably to age 90 or beyond became a more prevalent concern.
While not many in this age group have retired in the past decade, two decades’ worth of professionals are now feeling like they’re ready to do so – which is impacting the increase in resignation.
Private Equity Investment and Business Consolidation
A decade ago, it was essentially required for businesses to reach $20M in revenue in order to feel primed for private equity investment. This number has slowly been going down ever since, and private equity and venture capital firms are now much more open to looking at smaller and smaller transactions – which has impacted the labor market.
If a VC firm today buys 10 companies worth $2-3M each, they might absorb a total of 150 employees. But because of consolidations and redundancies across roles, those 150 people might be reduced to 40 or even 20 as organizations complete their acquisitions and streamline their workforces.
The Emotional and Residual Effects of 2020 and 2021
The current psyche of much of the workforce today is one of exhaustion, due largely to having traversed the pandemic, economic shifts, political shifts, and so on throughout the past year-and-a-half. Because of this, many employees today think, “I simply don’t have it in me to make a change or to work harder to further my career like I did three years ago.”
More and more two-income households are also shifting to a singular form of income more than ever before, with the pandemic providing the opportunity to prove that this is in fact possible. Many households were able to make ends meet with one parent at home during the pandemic, and have also adapted to only having one car, dining out less, and more.
Behaviors and emotions like these are playing into the workforce and economy, where a decrease in professional ambition and in overall spending has resulted in an increase in resignations.
Generational and Post-Pandemic(ish) Workforce Trends
Understanding that the pandemic has not yet entirely subsided, here are a number of workforce trends have helped shape the current professional climate.
Regardless of your political alignments, it’s tough to deny that the political landscape affects the overall workforce, as people may be more eager to leave a company because they either mandate vaccines or masks (or neither) or because they support any number of other polarizing modern-day issues.
Remote and Hybrid Working
Research shows that 40% of employees say they would only work at a company that offered remote or hybrid work, which has certainly contributed to the increase in resignations throughout the past 18 months.
Factors like seating areas, remote and hybrid work, office protocols, in-person meetings, and more also all contribute to employees’ willingness to work within a given organization.
Many employees today feel that if they’re able to pay their bills, live a comfortable lifestyle, and support their family, they may not need to pursue a promotion or more ambitious opportunity at this time. These factors have an impact on one’s motivation, purpose, and goals. For many employers, a challenge has been to bring team members back to a place of focusing on goal-setting and professional development.
Now more than ever, people are also more open to considering and chasing what they perceive will add joy to their lives, which results in many professionals changing positions and even changing careers altogether at a never-before-seen rate.
There are many challenges present for business leaders striving to maintain, support, and motivate their teams, particularly in the areas of training and development and workplace culture and connection.
Training and Development
For long-tenured employees experienced in their roles, organizations, and industries, remote work came quite naturally early on in the pandemic, as many of the processes were already in place to help facilitate success whether in-person or not.
For newer hires, however, training programs are often not in place to help them receive proper remote training and onboarding to succeed in their new roles.
Because of this, it’s important to have regimented processes in place that set expectations and effectively follow through with new hires. When they come to the office, they should have dedicated value to add and people in place that are spending time with them – not only helping onboard but helping create culture and connection.
Culture and Connection
Ingraining a powerful corporate culture with so many remote employees is a challenge unique to the past two years for most businesses. Early on in the pandemic, many resorted to Zoom happy hours and similar activities to help fill this void, but it quickly became clear that nothing could replace face-to-face interaction and most employees became burnt out.
Figuring out how to get team members in front of one another is essential, as culture is a major retention difference-maker. If someone is offered more money to do the same job at a competitor and they have no emotional connection to your organization, they are most likely going to leave.
At Oggi, we utilize a people-first approach to staffing and recruiting, always placing the quality of fit above all else to pair talent with roles that will be as impactful for them as they will be for the organization. In taking time to really get to know our clients and consultants, we are able to place the industry’s best and brightest in positions where they can truly thrive beyond a six-month contract or a short-term paycheck.
Contact us today to start unlocking your future with a people-first approach to staffing and recruiting.
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