In 2021, companies everywhere began to witness an unprecedented increase in employee turnover rates. Texas A&M professor Anthony Klotz has been credited for coining the term for this exodus: The Great Resignation. Coming out of the COVID-19 pandemic, many employees are choosing to leave their current employer or their current career field for greener pastures, especially in industries such as healthcare and technology which are seeing the highest turnover rates. The ripple effect from this period will continue to be felt for years to come, and it is forcing employers and employees alike to rethink their approach to the workforce.
The Birth of the Great Resignation
While there may be a multitude of explanations for the increase in employee turnover post-COVID, there are some common themes that are most prevalent. In the technology field, for example, candidates are always in high demand and are able to shift to companies that offer pay or benefits that are more commensurate with their talent sets. Many are also committed to balancing career and life and are more apt to choosing opportunities that align with their values.
This great resignation is characterized by millions of people spending months sheltered in place and at the time fearful of changing employment during such a tumultuous time in history. As a result, these same individuals were primed to consider moves as soon as the world began to emerge from the COVID lockdowns and restrictions. Consider some of the employee experiences of the last 24 months:
- Remote work became available for more employees than ever before, and many found it to be immensely fulfilling
- Time lost commuting in cars and mass transit could be invested elsewhere
- Families spent time together not just recreationally but also providing educational experiences for children
- Families saved money as a result of reduced external dining options or travel.
- Many pursued online educational opportunities
- Many missed time with extended family due to the inability to travel and partake in social gatherings
It is no surprise, then, that employees would prioritize changing fields or leaving unsatisfying employment. After spending months at home, they had the time to seek the answers to life and work questions they previously never considered.
Average Turnover Rates
Turnover rates in 2020-2021 overall reached 57.3 percent (but only 25 percent for voluntary turnover). That’s an astonishingly high rate, but take a look at how much higher it is for various industries:
- Professional services: 69.2%
- Health care: 45.2%
- Trade/transport/utilities: 60.5%
- Retail: 69.7%
- Leisure and hospitality: 129.3%
Steps for Employers to Improve Retention
Individual employers must determine the extent of the problem within their organization and use data and metrics to guide the conversation. There are three key steps companies can take:
1. Identify the Scope of the Problem
The first step in this process is to calculate the turnover rate (number of employees separated each year divided by the average number of employees within the organization), and determine the impact those departures are having on business metrics (such as productivity losses with the remaining team or workforce). Even a small turnover rate might cost millions in re-hiring or re-training costs, for example.
2. Determine “Resignation” Causes
After creating a picture of the problem and the costs, employers will need to identify the reasons for employees leaving the organization, such as compensation, employee reviews and promotional opportunities, training opportunities, employment locations, and departmental leadership. Analysis helps identify who’s at highest risk of resigning and what types of intervention measures can be taken.
Next is the opportunity to be proactive and create programs that correct key issues and help employees overcome their struggles. Underrepresented groups leaving in larger numbers, for example, might indicate a need for diversity (DEI)-focused retention solutions.
Opportunities for Job Seekers
The same challenges that may be plaguing employers may provide opportunities for individuals to pursue future career prospects. Among the most effective best practices:
- Reflection: Take time to look back on the past year and note successes and points of pride. Look ahead and identify skills to be developed and goals for your career.
- Build or improve your LinkedIn profile: Your profile should be complete and searchable and should include a headline that grabs the attention of recruiters and employers.
- Update your resume: Verify that the descriptions and content reflect your experience and achievements.
- Own your achievements: Identify the experiences and achievements that make you unique and desirable to employers.
- Identify the companies and employers that may be a good fit and focus your search.
- Networking: Look for gatherings that may provide opportunities to meet valuable connections and potential employers.
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Develop Additional Skills
Amidst the great resignation, it may be the perfect time to obtain additional education in order to pursue future career prospects. A variety of programs and certifications are readily available, especially in hot fields like design thinking and innovation. Individuals can learn the design methodology for creating products and services and for innovating during disruptive times, and keeping their minds sharp for future opportunities.