Why the Great Resignation will steal your best talent and how to stop it
The concept of work–life balance has never been at the forefront of conversation more than it has today. With reports that the Great Resignation is set to continue well into 2022, it’s important that employers, business owners and CEOs ask the most fundamental of questions: What on earth is going on and how can it be fixed?
"Anyone who’s hiring, even if you’ve made an offer for someone, needs to be prepared for counter offers. If you’re an employer, understand what the market is paying because it’s gone up."
According to the latest data from the U.S. Bureau of Labor Statistics, quit rates in the United States reached a peak of nearly three per cent in the single month of September 2021, which equates to about 4.4 million workers. Smaller nations like Australia have reportedly dodged this Great Resignation phenomenon with market insights provider Livewire claiming that there is yet to be any signs of a surge in resignations – at least until the first quarter of the 2021 financial year. It found that the number of people who voluntarily left their job over the preceding year fell from a pre-COVID level of nine per cent of total employment in the first quarter of the 2019 financial year to less than seven per cent in the first quarter of the 2021 financial year.
Into the talent tantrum
Dom Price, Work Futurist at Atlassian, thinks otherwise. The software giant this week released its second annual ‘Reworking Work’ report, which shares insight into the attitudes, expectations and experiences of approximately 1,079 Australian workers over a short 12-month window. According to Atlassian’s report, the past 18 months upended the way knowledge workers across all levels think about and carry out their professional duties.
More specifically, with Australians experiencing two years of prolonged or snap lockdowns like most of the world, the idea of work–life balance has been realised with 79 per cent of workers highlighting their newfound appreciation for their own quality of life beyond the office.
"In 24 months, work–life balance went from a nice-to-have to an absolute must-have and our findings reveal there still remains a dangerous mismatch between what working conditions employees expect and what employers are currently providing," Price.
Issues driving resignations
Atlassian’s findings claim that we are currently in one of the most pivotal times for hiring and retention in history with internal trust plummeting by a quarter.
The current data was compared to the same research from 2020 and it was revealed that internal trust within organisations and towards leaders had plummeted from 87 per cent to 68 per cent.
Its conclusion on the driving factor of the Great Resignation? That flexibility in working conditions is now table stakes for dynamic leaders who want to hang on to their best people and a bargaining chip for attracting top talent down the track. And the companies that don’t offer potential employees this flexibility? They will ultimately feel the full effect of this so-called Great Resignation.
"The problem is, we don’t have talent and the reason that has come about is prior to COVID. People are blaming COVID for this when in actual fact it was bubbling away for more than five years beforehand."
Roxanne Calder who is the Founder and Managing Director of recruitment agency EST10 and author of Employable: 7 Attributes to Assure Your Working Future, says that the problem, in Australia at least, is much wider and has been going on for longer than most think.
"The reason we’re feeling this issue so much is because there’s a shortage of talent across the board," she says.
"If there was an abundance of talent, people wouldn't care about the resignations so much. They’d just say, ‘Let’s go to market and rehire because it’s probably about time anyway.'
"The problem is, we don’t have talent and the reason that has come about is prior to COVID. People are blaming COVID for this when in actual fact it was bubbling away for more than five years beforehand."
Calder highlights:
- An ageing population leaving the workforce without a replacement.
- The lack of migration – both in skilled and general.
- Businesses not being across this whole issue with a plan before COVID.
- History has shown that significant events such as the plague or war often shifts people’s values.
"We talk about the ‘Great Resignation’, but there’s also the great relocation, the great candidate shortage, the great realignment – and that’s referring to the values. So the current employment landscape I equate to the greatest storm. If you had just one of these factors at play, it would just happen and slide away, but you’ve got all these variables coming together at once.
"What we’re now seeing is employees having the right to not just choose where they work, but how they work. And they’ve got the power now."
What employees want
If Atlassian’s findings are to be taken seriously, there are specific conditions that are determining whether employees choose to stay or leave a job.
- 84 per cent want flexible working arrangements to remain.
- 61 per cent of leaders and managers control where work is to be done.
- 29 per cent of workers in Australia now spend more time reporting to clients and managers.
- 51 per cent of managers themselves are concerned that their day-to-day tasks are becoming more transactional and less appealing.
"We need to evolve how we work to ensure an engaged workforce and an adaptable, sustainable business. Enabling distributed teams is about embracing mass personalisation and letting people step up to take control of their working week. It’s also about keeping our promises because talking about flexibility but then putting policies in place to restrict it does more harm than good," Price says.
"It’s time to shift mindsets away from managing tasks in favour of mentoring people. The 60 per cent of employers still choosing where the work gets done have no right to use the f-word. Those who leave that decision up to their employees have a headstart in recruiting job seekers."
Calder has her own warnings for businesses rushing to jump on this flexibility bandwagon.
"You’ve got job seekers asking for more money because there’s more money out there, and businesses are in this situation because the hurt is happening now. What’s going to happen is the reconciliation – the business is going to say, ‘I’ve just paid 20–25 per cent above market for that skill and person, but what if I outsource it locally or internationally?
"Especially this whole piece about relocation; if people want to work four hours away, then what’s the difference between finding someone in the UK, India or the States?
"The moment you start to work from home or remotely more frequently, for a business, the problem is how do you keep the engagement levels to keep people wanting to be with your business? Because that shifts the value proposition. And then if you’re an employee, it might be good that you’ve negotiated working from home and you’re getting paid an extra 20 per cent, but how are you now going to be promoted? Who’s watching you? Who’s teaching you a particular project and checking the contribution you’ve made? You’re not visual. There’s a whole lot of things that come into play."
While countries like the US bear the full brunt of this Great Resignation, industry experts like Calder don’t believe that Australia will see it to that extent. Regardless, throwing money at the problem isn’t a sure-fire way to solve the talent drought.
"Anyone who’s hiring, even if you’ve made an offer for someone, needs to be prepared for counter offers. If you’re an employer, understand what the market is paying because it’s gone up.
"If you have the capacity to pay a little more, sometimes that offering, conversation or gesture is actually worth more than the money itself. Put the money towards education, skilling, upskilling and reskilling instead – all of the things that are actually important to people."