Overture Offers Insight On The Great Resignation

Post Great Resignation? And the Future 

Three million people resigned in May 2020 in what began a trend known as the Great Resignation. This great resignation continues into 2022. According to The Wall Street Journal article dated July 21, 2022, titled “The Great Resignation Started Long Ago,”   The pandemic slowed it down a little then it accelerated in the spring of 2021. 

 

In 2021, 47 million Americans resigned, retired, or dropped out of the labor market. Labor participation reached a record-low 62%. It was 66% in 2000 and 63.4% a few months before the pandemic began. No single factor is causing the Great Resignation, but a culmination of many.

 

The pandemic did change working conditions and the workplace mentality for much of the workforce. It resulted in many employees reexamining their satisfaction in their current roles.

 

In addition, many workers felt they needed to leave the workforce. With schools and daycares shut down, parents of young children had to stay home, while those at high risk of medical complications retreated from work out of safety concerns. Those in the Baby Boomer continued to retire throughout the pandemic, a trend that began a few years after the great recession. This trend will continue for at least another ten years since the youngest baby boomers are now 57 and 58.

 

How Companies Are Adapting  

With many positions to fill and a considerable workforce gap, companies are now struggling more than ever to recruit and keep talent. Bob, who has been a business consultant for over 25 years, commented on some of his observations and strategies companies should be thinking about.

 

Remote working and the Hybrid Work Model- Benefits and Challenges

The most significant change many employers face for professional, managerial, and executives is the increase in the use of the hybrid work model. This model can take on many different variations, including:

 

•  100% working remotely  
•  Working in the office one or two days a week remotely or at home
•  The majority of the time at home 3 or 4 days a week with 1 to 2 days in the office

 

There are other variations, but these are the most common. Adopting remote working and the hybrid models are still evolving for companies, and the practices vary significantly. Some people and companies refer to as 100% working remote or partly remotely as work-from-home (WFH).

• Employees have requested more flexibility in terms of where they work and when
• Employers realized that in some situations, they could recognize lower facility costs and increased productivity
• Employers found that if they did not offer more flexibility, they would lose some employees 
• Employers found in some cases offering a more flexible work schedule, or hybrid model will improve their recruiting efforts

• Training and development:  it is well known that on-the-job training and its various forms are critical to an employee or manager’s growth. This holds for many positions, not just entry level. While some training can take place remotely and through other forms, i.e., technology-based conferences and team meetings, the in-person training is more critical for some people, some roles, and in some industries
• Employee interaction and socialization that takes place at the office have been missed or, at a minimum, have diminished, 
• Spontaneous integration and collaboration are not as easy when people work remotely. The same is true of productive conflict resolution
• Some employers' primary concerns are how a company creates a culture that will lead to greater employee engagement, lower turnover, and growth opportunities if employees are not in the office. This includes developing more meaningful relationships with employees at all levels. This helps to create that glue that helps improve retention long term.
• How does a company deal with compensation matters like internal equity and external competitiveness issues if the remote worker works out of state in a lower or higher cost of living area than the main office or comparable positions?

Retention Efforts and Strategies 

Filling vacant positions is one hurdle, but keeping new hires and current employees at all levels engaged and satisfied is another. As the Great resignation subsides, it is  projected that we will have lower labor participation rates than 5, 10, or 20 years ago, caused in part due to an increase in baby boomers retiring.  This began to accelerate in 2014 and will continue for another 5-10 years since the youngest baby boomers will work another 8-12 years.

A few of the retention  strategies companies have deployed now and in the past that should be considered are:

• Creating the culture that employees at all levels and the employer desire
• Improving performance reviews that focus on the future, not just the past 
• Increased flexibility (WFH options, more PTO, adjustable hours- the when) if it makes sense for the company, position, and the cultural considerations
• Performing informal or formal stay interviews- regular transparent conversations with employees (e.g., What would make you stay at this company?) 
• Offering growth opportunities (training, experiential learning, external coaching) 
• Benchmarking compensation and benefits to ensure they are competitive (In some cases, they are revisiting their compensation strategy and how they want to be positioned in the market, how much pay should be performance pay, and reviewing where they want to emphasize the difference.) 

The end of the pandemic, a recession, and some other factors may slow down the pace of resignation but the US Chamber of Commerce estimates that there are 11 million in the USA but only 6 million unemployed people. Companies need to consider some of the above recommendations.

Please call Bob Lindeman at The Overture Group, LLC to learn more. 847.910.7035