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We are in the midst of the resignation pandemic titled The Great Resignation. This name was given by Anthony Klotz, a management professor at Texas A&M University. In August 2021 over 4.3 million Americans quit their jobs. Is this just America that we are talking about? Not at all. This seems to be a phenomenon that has blanketed the entire world.
Why is this happening now? What is the reason why I am losing some of my staff? Is there a way to have an immunity against this?
The Great Resignation of 2021
41% of the world's population is planning to switch this year. In Germany, 1/3rd of the companies are short of skilled workers. The churn rate of India's IT sector has risen to 23%. This used to be around 9% to 11% not long ago. Let's just look at the churn rates in some of the top IT sector darlings of India.
Indian IT Industry struggling with attrition rates
A Microsoft study in July 2021 came up with an alarming finding that almost 61% of the Indian workforce was considering shifting their jobs in 2021.
Why is this happening? Why are the once loyal employees leaving companies in droves? And what has the pandemic have to do with this?
The big reason for this seems to be the epiphany that many of us have had because of the pandemic. Many of us have realised that our lives were dictated by who we work for and where we work. We got to socialize only on off days. We prioritised work meetings over parent-teacher meetings. We saved up our leaves through an entire year just to be able to spend a few more days with our near and dear ones.
With the fresh freedom and flexibility that we have all been able to enjoy with work from home induced by the pandemic we see no reason for work to take center stage again. We now want our work and office to fit into the lives that we want to live. Some want to quit their full-time jobs and take to freelancing to extend the flexibility further. Many don't see remote working as a perk any longer that only a few get to enjoy. They want remote work to be part and parcel of their jobs.
How does this impact your business?
Any form of attrition is bad for a business. This time around the attrition rates are seeing an all time high. This obviously is a cause for concern. What makes this even more worrisome is that it is the top talent that is also leaving you with the under performing talent base.
A LinkedIn survey that we did said that the top layer is leaving at a much faster rate than the bottom layer by as much as 40%.
Here are the impacts of The Great Resignation on your business:
- High attrition rates that can significantly affect productivity.
- Morale of the remaining employees is affected as they see their bosses and team members leaving
- Additional costs to recruit, on-board and train new talent
- Loss of revenue from the loss of productivity.
- More stress for the remaining team members as they try to back fill to meet deadlines
Sometimes a domino effect also happens when a team member leaves. After they leave, they might pull a few more team members along with them.
With remote work, the whole world is not the market for good talent. This is especially true in the tech industry. Many are taking up remote jobs that are being offered by companies from outside India. These jobs invariably pay more than what the Indian companies can afford to pay. The market rate for the top talent hence increases making it even more difficult for Indian companies to recruit this top talent.
What can you do to escape this impact?
It is difficult to say whether any company can escape the impact of The Great Resignation but you sure can reduce the impact. To understand how you can avoid the scathing impact of this resignation tsunami, let's look at why people are leaving.
Employee experience firm Limeade did a survey of over 1000 full time US workers who started a new job in 2021, and who work at companies with over 500 employees. The top 4 reasons why they quit their previous job were :
- 40% cited they had burnout issues
- 20% cited the lack of flexibility
- 16% cities their employer did not support their well-being
What were these people looking for in their new jobs? 40% said that the ability to do remote work as per their personal preference. The big keyword being "personal preference".
Another CoSqrd LinkedIn survey that we did to understand which perk did employees value the most also revealed the preference for the freedom to work from anywhere As much as 72% of the respondents said that their top preference was for the freedom to work from anywhere.
From the above it would be quite obvious that taking away the freedom to work from anywhere will have dire consequences for your company. Employees also dislike it when their employers dictate the terms and conditions around remote work. This was also quite evident from the remote work policies that Apple and Google came up with.
Burnout came as a top reason why people quit their jobs. We have seen that the companies that took the time to train their managers on how to manage remote teams are doing better than the ones that did not. Micro management, making people stick to the clock and not empathising with the personal needs of the employees are certainly learning to burnouts.
Connecting with your team members and understanding their world a little better, empathizing and providing them the freedom seem to be things that managers ought to do.
Final Thoughts
Much has happened with everyone in the last 2 years. For many the freedom and flexibility to weave work into the way they want to live has become top priority. Companies that recognise this tectonic shift are the ones that would avoid a big impact from The Great Resignation. Better people management practices and training to managers to lead with empathy would also drastically help you retain your top talent.
