The Great Resignation: Why workers quit (and how companies can respond)

A pandemic-driven exodus from the workforce has been marked by workers seeking more flexible working conditions, better pay and benefits, and career advancement. But companies can head off employee dissatisfaction — and boost customer satisfaction in the process.

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By now, what at first was seen as a workforce blip has become a real trend: workers are quitting their jobs in droves.

In October, 4.1 million US workers quit their jobs. That was down from a record 4.4 million who left the workforce the month before and 4.3 million in August. But it was still higher than any month through July of this year, according to US Bureau of Labor Statistics data.

A recent survey of 26,000 employees by the job-search site Joblist showed 22% of all job seekers reported quitting their previous job, and 73% of currently employed workers said they are actively thinking about quitting their jobs.

The Great Resignation (as economists have coined the employee exodus) reflects a deep dissatisfaction with previous employment situations. The ongoing global pandemic has enabled workers to rethink their careers, work/life balance, long-term goals, and working conditions.

Some of the top reasons workers quit this year are unhappiness with how their employer treated them during the pandemic (19%), low pay or lack of benefits (17%), and a lack of work-life balance (13%), according to the Joblist survey.

Workers in their 20s are more likely to have quit than teenagers and older workers, according to Joblist. In fact, about one-third of workers in their 20s quit their previous jobs, compared to only 20% of workers aged 50 and older. There was no difference in resignation rates along gender lines.

As the high level of resignations is predicted to continue through 2022, creating an inviting and comfortable workplace environment, both remote and in-person, will be key to employee retention.  

Both executives and managers play a role in stanching employee attrition, which means companies can do a lot to keep employees happy when the job market is flush with choices.

In fact, employees don’t always leave jobs because they’re highly dissatisfied with the work. For example, women leave the workforce in disproportionate numbers because of care-giving responsibilities, whether it’s for children or elderly relatives, according to Amy Loomis, research director for IDC’s worldwide Future of Work market research service.

Many workers report quitting to pursue a new career path (20%), reflecting how the pandemic created an opportunity for some to switch fields or move up to more appealing roles, according to Joblist.

“They may be satisfied enough in their current job, but there’s something greater on the horizon: 'I can do this for 20% more pay and live in the country,'” Loomis said.

Another factor behind high resignation rates appears to be a sense of feeling professionally stuck. A survey by employee management platform provider Lattice revealed 43% of respondents felt their career paths had either stalled or slowed to a crawl. That trend appears particularly true for younger employees as 38% of Gen Z workers (born after 1997) are looking for jobs with greater transparency around job path and development, according to the survey.

"People are a company's most important asset, and the cost of turnover is high," Lattice CEO Jack Altman said in a statement. Managers need to prioritize visibility for employees on their career progression, as well as provide the mentorship and tools to help them move forward, to ensure they're retaining their best talent."

The sharpened focus on employee experience reflects the escalating demand for businesses to re-examine their people management and engagement processes. Deloitte’s European Human Capital Trends Report found that 54% of leaders are re-imagining work processes moving forward, up from only 28% prior to COVID-19. More companies are re-evaluating outdated people practices in an effort to better understand their employees’ performance and engagement, as well as foster their development and growth.

Organizations should invest in training for top-down leadership that teaches them to encourage employees and make them authentically feel there’s an urgency in the work they’re doing. In other words, an employee should be made to feel their work is important and their manager trusts them. That kind of training for managers should be executed consistently throughout an organization, from topline managers down to front-line managers, Loomis noted.

When instituting new policies, employee polls can be invaluable, and can measure whether organizations as a whole. “That’s about opening up a two-way conversation so that management is tune with what employees need,” Loomis said.

With newly hired employees, it’s important to create a sense of belonging quickly so they feel they’re part of a cohesive team. “You’re trying to build a culture that’s intentional,” Loomis said. "Company culture happens not only when a manager trusts an employee, but also when employees have the technology and tools they need to connect to others in the organization."

Collaboration and communication tools are also key to creating a cohesive company culture. Some of the latest cloud-based offerings include Workspace and Viva from Google and Microsoft, respectively. Asana is another standout, according to Loomis.

Analytics are also beginning to play into employee experience, enabling managers to track how people are connecting with the company — and each other — or if they’re isolated. “They can nudge the manager to let them know this person on your team hasn’t communicated with anybody for two days,” Loomis said. “But you still have to maintain employee privacy on a day-to-day basis, so they don’t feel micromanaged.”

Apart from documented productivity gains that resulted from the pandemic for a myriad of reasons, studies show that an improved employee experience contributes to a better customer experience.

A July survey by research firm IDC showed that happier, more engaged employees  translate into a better customer experience, higher customer satisfaction, and higher revenues. In fact, 62% said that there is a defined causal relationship between employee and customer experience and that the impact was “large” or “significant” and measurable. Over half (58%) indicated that customer satisfaction is a key metric in evaluating employee productivity.

According to IDC, some of the important factors that affect employee experience are:

  • Transparency, trust, and communications from employers
  • The availability of a frictionless, collaborative work environment with digital experiences embedded in the flow of work
  • An organizational culture of belonging and inclusion
  • Employee listening, engagement, and recognition from management and peers
  • Career development and upskilling opportunities
  • Demonstrated corporate social responsibility

Organizations are also making investments in technology to support hybrid work environments.

According to research published in November by IDC, by 2023, digital transformation (DX) and business volatility will drive 70% of global 2000 organizations to deploy remote or hybrid-first work models, redefining work processes and engaging diverse talent pools. By 2024, 70% of enterprise businesses will have invested heavily in diversity, equality, and inclusion data, tools, and benchmarking to define recruitment and human capital strategies.

By 2025, 90% of new commercial construction and building renovations will use smart facilities technology that can support flexible workplaces and better in-office experiences and performance, according to IDC.

It goes without saying that a great employee experience can lead to increased talent acquisition and retention, IDC said in a September blog.

“This is especially critical as the world adjusts to a new hybrid work reality that removes some of the geographical limitations on talent, leading to increased competition for that talent,” the blog stated.

Copyright © 2021 IDG Communications, Inc.

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