I don’t think any Melbournian could say they haven’t been affected by the lockdowns. It’s been a tough year for all but thankfully it feels like things are finally returning to normal.
With the future looking brighter, we’re all leaving our homes with big smiles. Some people are coming out desperate to get back to what their lives were pre-COVID, whereas others are reflecting on their choices and want change. These life changes are what some experts have deemed The Great Resignation.
The Great Resignation is a trend that started in the U.S once they started emerging from their lockdowns. The following blog will look to explain what The Great Resignation is, why it might be happening and what can be done to make sure you are on the right side of it – not only as a business but also as a candidate.
So, what is it?
According to the U.S. Bureau of Labor Statistics, by the end of July 2021, 4 million Americans had resigned from their jobs and the market had a record breaking 10.9 million jobs open. Since then American businesses have seen the resignations continue. Naturally this is leading to a power flip during the hiring process. Candidates are taking back power and are in a position whereby they can demand a lot more perks, flexibility, and higher salaries.
Back home, PwC Australia has conducted a survey finding 38% of Australian workers plan to leave their current employer during next year. With construction booming, tight deadlines and skill shortages, this influx of people resigning could see detrimental effects upon the industry.
Why is it happening?
Within PWC’s report, ‘The future of work – what workers want: Winning the war for talent', they asked workers to rank what they valued most from their employer. The following were the results and the percentage of people that chose this as there most valued:
Remuneration and Reward – 25% (Fixed pay, bonuses, profit share schemes and superannuation)
Wellbeing – 22% (Mental health support, work-life balance, lifestyle and health and well-being)
Experience – 16% (Culture, Diversity and inclusion, Support and relationships and co-workers)
Ways of working – 12% (Technological enablement, Flexibility, Travel, Autonomy, and collaboration)
Career development – 11% (Learning and upskilling, leadership)
Brand – 8% (Prestige, ESG, Social responsibility, Volunteering and Values assignment)
Workplaces and spaces – 5% (Physical office design, workplace perks and location)
Therefore, if a company can’t keep up with the above, employees could look towards leaving to their competitors.
How to make sure you’re on the right side of The Great Resignation.
For the Companies
If businesses can understand the gaps within their employee satisfaction and create an action plan to improve them, they will not only be able to retain staff but thrive by attracting other candidates wanting a change. To do this, Ian Cook from the Harvard Business Review advises companies to consider the following:
Calculate the businesses current turnover rate by dividing the number of resignations per year by the average total number of employees.
The next step is to look deeper and investigate what these resignations have cost the business in terms of project delays, other resignations, loss of specific knowledge in the team as well as new hiring processes. This will allow you to get a full picture of the costs of resignations.
After this, the root causes of the resignations must be found. A company must ask what might be driving higher resignation rates and then explore the metrics surrounding these. For example, if it is pay or promotion, one can look at the time between promotions or pay increases for staff.
Lastly, now the turnover rate, cost of resignations and the root causes for leaving are known, you are now able to create a plan to counteract them. This plan must be a specifically tailored retention program moving forward to keep your staff. For example, if you notice that time between promotion is causing high rates of resignations then it might be time to rethink your advancement policies.
Having this company specific plan based on your own data can assist greatly to retain your staff and attract candidates that will align with your current workforce. This can lead to a company truly thriving in the new year.
For the Candidates
From a candidate perspective it is the perfect time to reflect and review your current business. If your current employer isn’t leading the market or matching the market with what you value the most for job satisfaction, it might just be the right time to see which companies are.
However, it is important to really understand your values and asses the next companies plans in order to make sure your next role is permanent, or you could end up with the same issues as your last role.
If this reflection shows that there are gaps, a market that is in a candidate shortage and the great resignation leading to change, creates a great environment to see what other companies are offering to see if it is the right time for you to move.
In summary, if companies and candidates take this seriously and take the time to reflect, both can really thrive in this environment and in turn lead a happier and more fulfilled work life.
If you are needing any advice or insights into the market or would like to further understand which companies are changing or how companies can change, please don’t hesitate to reach out! I am currently working as a consultant within the Building Services space at Fetch Recruitment. You can find me on LinkedIn here.