In July 2021, 4 million Americans resigned from their jobs, according to the US Bureau of Labor Statistics. Resignations peaked in April and have remained unusually high for several months, with 10.9 million available jobs at the end of July, a new high. In the face of such a tidal flood of resignations, how can employers keep their employees?
The flight of workers, dubbed “The Great Resignation,” has created hiring issues for businesses and left millions of jobs empty.
Some argue that “the Great Resignation of 2021” is simply a pattern that employers are noticing in employees departing to pursue a whole different career path.
Others attribute the sudden uptick in resignations to the unprecedented autonomy that employees are discovering as the labour market returns to its previous peak.
This wave is supposed to have flipped the market from an employer’s market to a worker’s market, where most people would maintain a job they didn’t enjoy, out of fear of not being able to find another.
Working women have had to juggle additional responsibilities such as child care, virtual schooling, and their employment. So, what does workforce realignment mean for people and businesses? And what should you do before you quit your job?
Two key trends are:
Employees in their mid-career have the greatest resigning rates.
Between 2020 and 2021, employees between the ages of 30 and 45 experienced the biggest increase in resignation rates, with an average increase of more than 20%. While younger employees are more likely to leave, resignations among workers in the 20 to 25 age bracket actually fell over last year (likely due to a combination of their greater financial uncertainty and reduced demand for entry-level workers). Employees in the 60 to 70 age group likewise resigned at lower rates than in 2020, while those in the 25 to 30 and 45+ age groups resigned at slightly greater rates than in 2020. (but not as significant an increase as that of the 30-45 group).
There are a few elements that may explain why these mid-level employees have accounted for the majority of the resignations. To begin with, it’s probable that the change to remote work has made companies believe that hiring people with less experience is riskier than usual, because new employees won’t receive in-person training and coaching. This would increase demand for mid-career employees, providing them more bargaining power when looking for new jobs.
It’s also plausible that many of this mid-level personnel have been putting off moving out of their jobs owing to the pandemic’s uncertainty, implying that the surge we’ve witnessed in recent months is the product of more than a year’s worth of resignations.
Of course, after months of high workloads, hiring freezes, and other pressures, many of these individuals may have simply hit a breaking point, forcing them to reconsider their work and life goals.
The computer and healthcare industries had the most resignations.
While resignations in some industries, such as manufacturing and banking, have decreased marginally, 3.6 percent more healthcare workers have left their employment than the previous year, and resignations in technology have grown by 4.5 percent. Employees who worked in fields that had witnessed dramatic increases in demand as a result of the pandemic had higher resignation rates, which likely led to greater workloads and burnout.
These patterns emphasize the significance of using data to determine not only how many employees are quitting, but who has the biggest turnover risk, why individuals are quitting, and what can be done to prevent it. Every organization’s details will vary, but there are three actions that can assist any business better harness data to boost employee retention:
Determine the source of the problem.
It’s time to do a deep data analysis to establish what’s truly driving your employees to quit once you’ve determined the severity of your retention problem. Consider what circumstances may be causing increasing resignation rates. Metrics like remuneration, duration between promotions, pay raise size, tenure, performance, and training opportunities can all help you uncover trends and blind spots in your company. To better understand how work experiences and retention rates change across different employee populations, you can segment employees by categories such as location, function, and other demographics.
This analysis can help you determine not only which employees are most likely to depart, but also which individuals are most likely to be retained through focused interventions. After conducting thorough research, the trucking company discovered that drivers with less experience and a remote supervisor were considerably more likely to resign than those with greater experience and in-person support.
Determine the scope of the issue.
It’s vital to evaluate both the scope of the problem and its impact before you can figure out what’s causing your company’s turnover. To begin, use the following formula to get your retention rate:
Number of Separations per Year ÷ Average Total Number of Employees = Turnover Rate
Similar formulae can be used to determine how much of your turnover is due to voluntary resignations versus layoffs or firings. This will assist you in gaining visibility into the source of your retention issue.
Next, figure out how resignations affect critical business KPIs. When individuals leave a business, the surviving teams are frequently left without crucial talents or resources, which have a detrimental impact on everything from work quality and completion time to bottom-line revenue. In order to acquire a whole picture of the costs of resignations, it’s critical to analyse how higher turnover connects with changes in other key variables.
Create customized retention programs.
You can start creating highly personalized programs geared at resolving the exact difficulties that your business struggles with now that you’ve discovered the fundamental reasons for turnover. If you notice a strong link between time between promotions and high resignation rates, it may be time to reconsider your advancement practices.
Importantly, you may realize during this process that you are unable to make these kinds of data-driven decisions due to a lack of appropriate data infrastructure. Investing in an organized, user-friendly system for recording and evaluating the metrics that will guide your retention efforts is one higher-level intervention that may be required before you can begin any sort of targeted marketing.