The Great Resignation is a phrase first coined in the US, describing a seismic shift in the US labour market, driven by a record number of resignations in late 2021. We’ve adopted the phrase here in the UK, though we should probably also remember that, while resignations do seem to be on the rise in the UK, there appear to be more factors behind the ‘missing million workers’ in the UK:
- A significant reduction in immigrant workers, repatriated because of Covid, or Brexit, or most likely both.
- A big rise in the number of people classed as “economically inactive” – that is, people who are not looking for jobs and are not available for work – people with long Covid, staying in education longer or taking early retirement all contribute to this.
- Eye-wateringly expensive childcare makes full time work for both parents impossible for many families
When we add these factors to the existential decisions being made by workers to insist on greater flexibility, and employment conditions that are better suited to their needs, plus a very real chance to not have to commute on overcrowded trains/roads 5 days a week, I would suggest we have a significant talent challenge on our hands.
While employers may be tempted to dismiss this trend as a phase, they do so at their own risk. It’s becoming increasingly challenging to retain and recruit staff.
If your business isn’t making a genuine effort to address the reasons behind the record number of voluntary departures throughout multiple industries, you may get left behind.
Whatever phrase we choose to coin, the Great Resignation is an opportunity for organisations to review their employee experience and revamp their reward strategies to keep workers motivated and engaged.
In this article, we’ll reveal the data behind the Great Resignation and share some key actions you can take to get ahead of it.
How to Address the Great Resignation
Is The Great Resignation Really That Significant?
The Great Resignation took hold in 2021 and is set to continue throughout 2022. At the time of writing, the 2022 data suggests that one in three (32%) UK workers plan to resign from their jobs in the next 12 months.
Similar figures are backed up by research in various countries – from Australia and Singapore to Canada, the United States, and the UK.
The data shows that although some industries are more impacted than others, this isn’t a niche issue. It’s happening across the board.
Currently, the UK is experiencing the highest quit rate since 2009. The vacancies are the highest on record, while redundancies are at their lowest since the mid-‘90s.
The data doesn’t lie: employees are no longer willing to be burned out, underpaid or undervalued. Organisations that understand this and rectify it will reap the rewards; those who don’t will pay the price.
Businesses and managers who are ready to adapt their working models should go back to basics and attempt to understand exactly what employees are looking for.
Understand What Employees Truly Value
Research reveals a significant gap between what employers think their employees value and what employees actually value.
Before you make snap decisions about benefits, perks, and salaries, work on gaining clarity on what makes a desirable workplace.
Remember, this isn’t a one-size-fits-all proposition. Workers may value different things at different career and life stages. We can generalise a little using data, but things may look slightly different between industries.
While salary and benefits are a factor, they are just one piece of the puzzle – and often not even the most important piece. Today’s employees crave a sense of purpose and connection with their colleagues and managers. They want to contribute meaningfully – to their organisation and to the world around them. They desire flexibility and work-life balance, and they want to be valued and recognised.
Recognising a Disconnect
Research from McKinsey highlights where the disconnect between employers and employees was most acute.
It shows that employers assumed that transactional factors, such as compensation and development, were the most important.
However, in reality, it was the relational factors that affected employee satisfaction the most, such as having caring and trusting teammates, being valued by their manager and organisation, and having a sense of belonging.
Work-life balance, being engaged in their work, having a manageable workload and being able to care for their family were also highly valued.
Balance Hygiene Factors vs Motivators
This disconnect between relational and transactional elements is reflected in Herzberg’s Motivation-Hygiene Theory – also known as the Two Factor Theory.
American psychologist Frederick Herzberg came up with this theory in the ’70s, but it is still highly relevant to the modern workforce.
The two-factor theory recognises two vital “factors” that govern job satisfaction and dissatisfaction. Each category must be met and balanced appropriately to be effective. Here’s a brief overview of how each works.
1. Hygiene Factors
Hygiene factors have an impact only by their absence. They can ease dissatisfaction but are ineffective at increasing satisfaction.
They include issues related to the work environment, such as salary, supervision, relationships with peers and supervisors, status, security, and working conditions.
2. Motivation Factors
Motivators are effective by their presence. They involve an employee’s needs for meaning and personal growth and include issues such as performance, achievement, recognition, responsibility, the work itself, and advancement.
Combining the Factors
When you alter a hygiene factor such as salary, you are removing a sense of dissatisfaction but not necessarily providing motivation. However, when you have met the relevant hygiene factors, you can then build upon this foundation by addressing the motivation factors.
Key Actions to Keep Your Employees Motivated and Engaged
In the time of the Great Resignation, it’s important to keep your employees motivated and engaged. Here are some strategies to do that:
Provide Competitive Pay and Benefits
Even though pay is a hygiene factor, not a motivator, the current reality is going to put a lot of pressure on salary. Providing fair and competitive pay and benefits should be the bare minimum of your strategy.
- Action – undertake a detailed pay benchmarking exercise, to understand how your pay compares to market. Even if you are not in a position to purchase formal salary data, there are other ways to do an effective exercise that suits your organisation size and budget.
Give Growth Opportunities
Employees want the opportunity to grow and develop in the workplace. This is one of the most important benefits, alongside flexible work schedules. Give employees plenty of opportunities to increase their skills and advance in their careers.
- Action – do your key roles have clearly articulated career pathways? Many areas of the business will have natural ‘junior to senior’ roles with distinctions between each level – how clear are these to managers and employees. Once you have this in place you can identify clear L&D initiatives to give employees the growth opportunities they want and need, and fulfil your need of creating a strong internal talent pipeline.
Be Flexible with Hours
Over the last two years, more people have transitioned to working from home than ever before – and many have noticed a difference in their quality of life and attitude to work as a result. Providing flexibility around location and hours should be high on your list.
- Action – get clear on your approach to hybrid working – help employees and managers to navigate this transition, and maximise their effectiveness to adjust to this new way of working, which is very much here to stay.
Tailor your benefits
Not everybody values the same benefits. Take the time to get to know your employees’ priorities so you can curate a benefits offer that is the most meaningful for them, and maximise your ROI on benefits spend.
- Action – do an audit of your entire benefits suite – what does it cost, how much is it used by employees, and what is potentially missing? Ask employees for feedback and input. Consider which aspects might be tailored to better suit individual preferences, and investigate tech to support a more flexible benefits approach.
Create a Sense of Purpose
Employees who believe their work is meaningful and important are more likely to be motivated and experience job satisfaction. Millennials and Gen-Xers are more purpose-driven than previous generations. If you want to attract and retain staff, provide them with a palpable sense of purpose in their roles.
- Action – look at your employer brand – how would employees describe working for your company to friends and family? Is it time to look at what really ignites their passion and motivation to do a good job every day?
Revamp your Recognition
Lack of recognition can be one of the main reasons people feel undervalued and unmotivated, and ultimately might lead them to resign. Your workers want to be recognised for their effort. Working remotely has put further pressure on this, and it could be that your established processes are out of date, or not working as well as they could. Taking the team out for lunch, or buying a box of donuts to eat together at 11 am isn’t necessarily as easy to do anymore.
- Action – When an employee makes a lot of effort, what mechanisms do you have in place to thank them, and remind them how much they are appreciated? Do the systems you’ve previously used still work well – are they used and valued? Could they do with a revamp?
Work on Your Company Culture
Positive relationships with peers is one of the key motivational factors for job satisfaction. Ensure your discrimination and harassment policies are robust and offer team building and bonding opportunities.
- Action – whether you feel this has not received enough attention recently or you want to take the opportunity as the workplace returns to a new normal, it might be time to do a culture review. Do managers feel empowered to walk the talk? Are behaviours consistent to the values? Have there been some tough decisions – furlough, restructure etc – that mean some healing and rebuilding is needed?
With COVID-19 came stress, overwhelm and burnout. Employees have had enough and realise that their mental and physical health is worth more. Wellbeing is often seen through the reactive lens of crisis intervention, but in fact we should remember the importance of preventative actions too – proactive interventions, providing support before crisis point is reached, can provide strong and sustainable results.
- Action – how will you sustain any of the wellbeing support measures put in place during the pandemic, to provide ongoing support to employees?
Take Opportunities from the Great Resignation
As employees worldwide take time out to reassess what they want in a job, this is the ideal time for employers to reflect on how they can improve retention and provide a better employee experience.
If you need assistance to determine what that looks like for your organisation, I can help. As an experienced HR Reward Consultant, I can support you with any aspect of reward, from design to implementation. Contact me to find out more.