Organizational psychologist Anthony Klotz coined the term “Great Resignation” in 2019 when he predicted a voluntary mass exodus from the workforce in the near future. In April 2021, Klotz’s premonition began to come true…And will continue into2022.
April 2021 was the start of a run that would see 11.5 million Americans quit their jobs; a trend that continues unabated. The The Great Quit has changed the employer-worker dynamic, redefined the expectations of employees across the economy, and created a labor market defined by businesses struggling to keep enough staff on hand to meet demand.
April 2021 was roughly one year since the start of the pandemic, when unemployment jumped by 10.3 percentage points to 14.7%, which was both the biggest increase and the highest rate since the Bureau of Labor Statistics (BLS) first started keeping records in 1948. A record-high 3.8 million workers quit their jobs in a single month, many of whom went off to look for higher pay, better conditions and a healthier work-life balance. The national quit rate of 3.1% was the highest since BLS started keeping records in 2000.
May was part of a second straight month of sweeping, economy-wide resignations as 3.6 million people walked away from their jobs. May validated that April was not a fluke; that something bigger was happening.
At the beginning of the summer 3.87 million people quit their jobs; an incredible 11.5 million people joined the growing revolution in just three months. By July, the tally was 4.03 million new departures and in August an incredible 6.6% of the industry’s workforce voluntarily offboarded. In total, employers saw a record 4.27 million workers wave goodbye — 2.9% of the national workforce. September saw the trend continue at 4.43 million resignations.
The Great Resignation has forced employers to use bonuses, salary increases and supercharged benefits to hire and retain talent: the very incentives that could cause even more people to quit. Most economists predict the Great Resignation will likely impact our economy well into 2022 with job seekers benefiting more than ever from employers offering incentives to attract candidates to fill the vacancies at their companies.
The future is not certain. The Great Resignation wasn’t so much a mass strike as it was a mass response to the extraordinary circumstances surrounding the pandemic. When the virus (hopefully) begins to fade in 2022, so, too, might the Big Quit but “hope” is not a business strategy.
Root cause analyses based upon quantifying the problem and its impact must be conducted by employers followed by implementing targeted retention campaigns designed to address the specific issues that they struggle with the most. Resignations are highest among mid-career employees between 30 and 45 years old indicating that the shift to remote work has delayed transitioning out of their roles due to the uncertainty caused by the pandemic while creating more than a year’s worth of pent-up resignations compounded by high workloads, hiring freezes, and other pressures, causing them to rethink their work and life goals.
If people of color are leaving your organization at a higher rate than their white peers, a DEI-focused approach may be called for. If you find that time between promotions correlates strongly with high resignation rates, it may be time to rethink your advancement policies. With greater visibility into both how serious your turnover problem really is, and the root causes that drive it, you’ll be empowered to attract top talent, reduce turnover costs, and ultimately build a more engaged and effective workforce. Consider long term bonuses that encourage retention and make sure that compensation takes time to vest so you can increase your employee loyalty and keep people around longer.
The best deterrent to resignation is better management. While people do want more money, it’s often lousy management that makes them start looking. Put real effort into increasing your management skills, and you may find your turnover dropping instead of increasing. Whatever you do, don’t hide from this scary reality. Your competitors are waiting to poach your best employees so pull out the stops.
(The author acknowledges the work of Ian Cook, Suzanne Lucas, and Andrew Lisa whose insights were invaluable in putting this post together)