The Great Resignation: Should we really be concerned?

Last year, TikTokers were going viral with ‘Quit Tok’. Before you think this is another social media trend by millennials, let’s clear the air. A ‘Quit Tok’ is a video in which the creator speaks about quitting their job. While on the face of it, this comes across as a big ado about nothing, this spate of resignations is shaking up the economy. Let’s answer some basic questions about the Great Resignation and understand why you need to be concerned about it.

The Great Resignation, as it is being touted, is the phenomenon in which huge numbers of workers quit their jobs. According to the Bureau of Labor Statistics, nearly 3% of the US workforce resigned in October. After a long time, the number of jobs is more than the workers and the odds are in the favor of the workforce.

  1. Age demography: The rates of resignation are highest among employees who are mid-career i.e. in the age group of 30-45 years. Their resignation rates increased by 20% between 2020 and 2021. However, the rate of resignation has decreased for those in the age group of 20-25 years.
  2. Industry demography: The tech and healthcare industries saw the maximum number of resignations. As many as 3.6% more employees quit their jobs in the healthcare sector in comparison to 2020. Whereas the increase in the tech industry was 4.5%. Employees in fields that experienced extreme increase in demand due to the pandemic leading to increased workloads and burnout were more inclined to quit their jobs.

Obviously, there is no single reason for the massive quitting. While some resignations are sabbaticals, early retirement, or dropping out of the workforce for caring responsibilities, some workers globally are just leaving the workforce to re-configure their careers.

Higher resignations in mid-career employees can be attributed to the increase in demand for their experienced services. With the shift to remote work, employees found it riskier to hire entry-level workers, and thus, the reduced demand for entry-level workers made them hang tight to the jobs that they are currently in. This created greater demand for mid-career employees, giving them greater leverage in securing better positions.

It is highly likely that many of these mid-level employees may have delayed transitioning out of their roles earlier due to the financial uncertainty caused by the pandemic. The boost in resignations that we’ve seen over the last several months could be the result of more than a year’s worth of pent-up resignations.

But why now? It is quite clear that workers have reached a breaking point after months of high workloads, higher freezes, and other pressures causing them to rethink their work and life goals.

The pandemic has created a shift in the mindset of workers, who are now seeing the benefits of being autonomous and wanting the flexibility of working from locations of their choice. There is a major hiring crisis due to workers moving away from major cities during the pandemic. There is more emphasis on mental health and wellbeing and workers are choosing autonomy over jobs. It was reported that self-employed workers in the US rose by 5,00,000 since the beginning of the pandemic.

This is one of the biggest realities and outcomes of the pandemic. As global businesses expand exponentially, demand for talent is skyrocketing and hence many can cherry-pick roles that align more with their values and desires.

Remote working possibilities now mean that millions of workers can now access thousands of new roles previously geographically off-limits. Many workers are moving to sectors that are more likely to offer hybrid work in the long run. According to LinkedIn UK figures, from August to October 2021, the net flow of workers moving to software and IT services more than doubled. Conversely, education experienced a net outflow over the same period, with retail being the hardest hit in terms of quits.

Traditionally, looking for a new opportunity has been a reactive process arising out of various levels of dissatisfaction. However, workers who are passively weighing options and selecting their ideal match, hold the cards now. They are even being offered four-figure relocation bonuses to urge them to make the move. Referral payments have come into play to lure prospective employees.

With high mobility where people can have several jobs offers to choose from, hiring processes have to be short and efficient, sometimes even a week.

People want to be paid their worth based on the value they create for an organization, not on the cost of living. Power is currently in the workforce’s hands, meaning they can make more demands—including higher wages, more perks and flexible work arrangements. They’re getting it more readily now.

Post the pandemic, people are opting for better work-life balance. Even at the cost of sizeable pay cuts people are settling for priceless rewards like healthy living and sleeping well. People are discovering the importance of crafting careers that fit their lives rather than living painstaking lives to fit their careers.

The Great Resignation is turning into the Great Reshuffle where people are transitioning to a better work-life balance. The pandemic has led to a permanent improvement in the world of work, offering people options closer to their ideal work setup.

Employees need to look at quantifiable metrics to figure out the root cause of the resignations before they can be prevented. Data can be collected to identify which employees have quit, who is at risk of turnover, which business metrics were affected, and what is the cost of the employee leaving on the company.

After quantifying the problem, a detailed data analysis needs to be conducted to determine what’s really causing staff to leave your organization. Metrics such as compensation, the time between promotions, size of pay increases, performance, training opportunities, career bottlenecks, burnout, etc. can help to identify trends and blind spots within the organization. Such qualitative data analysis gives clear indications about which critical employees can be retained with targeted interventions.

Once the root causes of turnover have been identified, one can begin to create highly customized programs aimed at correcting specific issues that the workplace struggles with most. It is advisable to invest in an organized, user-friendly system for tracking and analyzing the metrics that will inform retention efforts.

A closing mark of caution for employees who are making hay while the sun shines! While traditionally, staying in a role for as long as possible was considered a virtue, and ‘job hopping’ was considered stigmatic. Now, with multiple options in hand, employees need to have clear goals in mind and strategically settle for the best role that ticks the most boxes. It is important to build social capital in an organization and not warp employees’ relationships with work. A mindless, purposeless, purely money-driven ‘job hopping’ is still not a healthy practice to adopt.

In conclusion, what is being termed ‘The Great Resignation’ is really a new reality emerging out of market dynamics that needs to be recognized and addressed in a healthy way. It is a great deal like corrections that stock markets witness from time to time. It is time specific and industry specific and driven by market dynamics.

We, at Aligned Studios have had amazing success in recruiting, training, rewarding, inspiring and retaining the best available talent. We actively promote work-life balance and encourage individual thinking and autonomy. Even in remote working we have created a happy, interactive space where individuals are able to seamlessly weave their careers into their lifestyles. Our clients, collaborators and business partners, all benefit from the creative positive energy radiating from our team. We can provide you with the best talent in the market and make sure you retain them. Interested in working with us? Let’s get on a quick call.