HR leaders across the country are facing one of the biggest challenges in ages. Employee retention is increasingly becoming a painstaking job even for many of the industry leading companies. This edition of the Macroscan delves into this evolving issue and attempts to understand what drives the so-called ‘Great Resignation’.
What is it?
While employees preferred to stick with their jobs and remain ‘safe’ during the early stages of the pandemic, they are now rapidly looking to change jobs and find greener pastures. The numbers clearly speak for themselves.In 2020 there were 6 million fewer resignations compared to 2019. However in 2021, there is a staggering spike of 19 million resignations, a surplus of more than 7 million compared to the same time last year.
Some of the developments and concerns of employees (often leading to resignations) are listed below:
- The workforce is concerned about career advancement
- The pandemic caused them to re-evaluate their skill sets
- Many of them joined training and skill development programmes to prepare for a job change.
- No effective communication model between leaders and employees about the future of work (including WFH policy)
Journalists have gone as far as dubbing the ‘Great Resignation’ as an unparalleled revolution by the workforce. It is claimed to be a workers’ protest against the tone-deaf companies, insensitive bosses and of course poverty wages. Many workers have even left their jobs without having a second offer in hand, indicating a shift in the attitudes of the workforce to jobs and job-security. This has arguably led to a situation where companies are waging salary wars against each other to get hold of the best talent in the country. In addition to providing greater monetary compensation, other perks and benefits are also being advertised to people who join companies. An example in point would be Walmart’s and Talent’s bid to coax prospective employees by offering to subsidise their college education expenses.
The Behavioural Angle
The last 18 months have changed offices and workspaces for good. Workers have been exposed to tremendous amounts of stress and uncertainty. Experts believe that the ‘Great Resignation’ is in fact behavioural economics in action. Survey after survey reported that workers across sectors were suffering from burnout and they simply could not rationalise toiling day and night in the post-pandemic work ecosystem. An interesting data point that makes the ‘Great Resignation’ more interesting is the fact that around 13% of workers even took a pay cut while shifting jobs, indicating that lucrative salaries alone aren’t the driving force behind this phenomenon.
The Other Side
Employers, on the other hand, are perplexed as to what went wrong. Many employers quickly adopted a plethora of initiatives aimed at improving employee happiness from the very onset of the pandemic. One IT industry leader recounts that her organisation adjusted HR policies, became more lenient with deadlines across projects, did not cut salaries and even invested in digital tools aimed at team-building and enhancing worker productivity from remote locations. They appear to have done their best to shield employees from the ill-effects of the pandemic. Yet, they have also faced heavy attrition rates.
One possible explanation for this phenomenon could be that after a year of very low attrition, the law of averages simply kicked in. After the uncertainty brought about by the pandemic started to largely subside, a slew of ‘pending resignations’ simply started to take effect.Secondly, despite the employers’ attempts to grab onto talent, the employees themselves felt a need to upgrade their career track and used the pandemic as an opportunity to upskill themselves to move to new roles, either internally or externally. Third, a significant proportion of employees (60%) report not having a pleasant experience with their previous organisation’s support, training and employee relationship initiatives during the pandemic. Additionally, a lower engagement rate with remote teams and the inability to provide large salary appraisals (due to the pandemic) made shifting jobs a very lucrative option for employees that could find better packages elsewhere.
The Change
The management top brass across industries are now keen on adopting policies that promote greater work-life balance. They emphasize on adopting a more empathetic treatment of employees compared to the pre-pandemic era. The ultimate goal behind adopting measures like is the reduction of turnover rates and attrition while increasing employee loyalty and engagement. HR leaders suggest that the management should actively listen to employee feedback and strive to eradicate organizational complexities that contribute to higher attrition rates. Companies, especially in the IT sector, have also started to hire freshers en masse (individuals straight out of college) to combat the attrition problem, thus ensuring enough staff are present to meet project deadlines even if a percentage of hires drop off mid-way. Thus, the HR choices of the future will revolve around flexibility, employee well-being, location preference and data security in addition to the domain’s core concerns of talent management.
References:
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