In the past several months, there has been an incredibly long queue of resignations - influenced by the pandemic, as employees begin to realize their current jobs don’t quite meet their expectations and personal goals. And employers, on the other hand, are oblivious as to how they can handle the situation. In this article, we’ll address the key drivers of The Great Resignation 2021 and provide actionable plans that’ll help employers convert this surge in resignation to rapid growth in their retention rate.
As the world gradually crawls into the post-pandemic era, employees have begun to re-evaluate their career choices and the company they work for. Numerous of them have willingly quit their employment to pursue better positions that match their financial, physical, and mental health expectations, creating market saturation and exposing many sectors to the Great Resignation 2021.
In July 2021, the U.S Bureau of Labor Statistics estimates that 4 million Americans quit their jobs. The outrageous number of resignations is quite shocking and has left leaders worried.
While these numbers demonstrate that many leaders have failed to establish a healthy employer-employee relationship, it is not too late to adopt data-driven strategies that’ll convert resignation to retention.
What are the key drivers of the great resignation 2021?
1. The gap in the managerial relationship
Managers have failed to create an ideal work environment that promotes physical and emotional stability for their employees, making them feel unseen and unheard. This has been one of the leading causes why many Americans quit their jobs. As a progressive manager, it only fits that you treat your employees as humans and pay attention to their demands. Sometimes, you might have to put aside the ego attached to the traditional organization’s hierarchical structure and listen to their requests.
As opposed to the pre-pandemic era, the communication and managerial relationship gap has increased during the pandemic, and managers seem to be responsible for this. Since the covid-19 pandemic caught global businesses unaware, companies were unable to offer training to help managers organize their teams better in a virtual space.
2. Work-life unbalance
One of the main reasons many people quit their jobs is their burnout from working overtime to cover others' tasks. The reason behind this is that the company has to lay off a number of employees to ensure their profitability during the crisis of health. Employees experiencing a shortage in labor supply were subjected to an increasing workload and high pressure, which provoked a storm of strikes and resignations.
All these have contributed to their inability to maintain a work-life balance, which they needed more than ever at the time, to be able to spend time with their loved ones amidst the global crisis. Life has become shorter than ever since the pandemic broke out in 2020. Employees as human beings now are more concerned with their meaningful work and life. Not knowing how your employees feel on this front is inexcusable.
3. Unfair compensation & allowance
The business got into trouble all of a sudden when the Covid-19 happened. We have observed many companies declaring bankruptcy. According to a Bloomberg report, in 2020, more than 340 U.S companies were stating the permanent closure, with many blaming Covid-19 for their downfall. Others cut down employees’ salaries, allowance and eliminated the training sessions, etc. This challenging time has led to unreasonable compensation to some industries.
While there are no limits to their demands for a salary increase, ensuring that the value of their services is paid off is essential. If they ever feel like they’re underpaid for the services they offer, undoubtedly, they’ll most likely leave for a company that has presented a better offer.
4. Vague growth opportunities
The objective of every employee is to make progress in their career paths. Employees start preparing to leave a company immediately after they notice that there’s no room for growth. As an employer, it is essential that you have their goals on record and provide all the support they need.
When employees figure out the performance review postponements, they consider looking for other opportunities in a different company. Furthermore, many corporates now are hiring talent globally regardless of geographical locations.
Insightful lessons Asian leaders can learn from the Great Resignation 2021 in the US
Quantify the problem
Since you’re dealing with figures when handling the rate of employee turnover at your company, you’d need to quantify the scope of the problem and its effects. An excellent way to do so is by adopting this retention formula:
Turnover Rate = Number of Separations per Year/ Average Total Number of Employees
You can also adopt similar formulas to get specific data on the source of employee turnover: voluntary resignations or lay-offs. With this data, you can get insights into the primary sources of the increasing employee turnover rate and plan around this cause.
Thereafter, you’d need to measure how much this resignation has affected your company and how well the present team can fill up that gap for the time being. When employees resign, they leave with their skillset, resources, and effort, reducing the quality of work and increasing production time. Analyzing the impact of their resignation on your company will help you estimate the cost of balancing your business operations once more.
Identify the root causes
Once you’ve been able to identify the scope of your retention problem, the next step is to conduct a survey that’ll unveil the primary cause of the increasing turnover rate. This survey will give you insights into the key factors driving the decrease in employee retention. In-person training, career possibilities, increased salary, and other variables that favorably influence employee retention are improved by the survey findings.
To further streamline this process, you can sort your employees into different categories such as age, location, function, and other segments to better understand the work experience in relation to the turnover rate. With this analysis, you can identify what categories of employees can still be retained when certain improvements are made and those with a higher risk of returning to the job market.
Customize retention program
After identifying the scope and primary cause of your retention problem, the next big step is to create an action plan that targets each issue. For instance, if your analysis tells you that more entry-level workers are resigning, it is proof that your company lacks in-person training or the workload is a little too overwhelming. If you find that many of the resigning workers are mid-level, you may need to reorganize work hours and pay schemes.
In some cases, the fierce competition also drives your business to the shortage of labor if you cannot afford a position in scarce resources, for example, nurses during this pandemic. Hence, your company must offer better benefits and guarantee the work-life balance for the employees to keep them stay back and work for you.
Reinforce employee-centric mindset
Employees love to be seen and heard just as much as you do. You don’t have to restrict your focus to just their work-life as an employer. To make them feel important, you need to extend your concerns to their personal life too. Check to see how well they’re doing amidst the pandemic and implement policies that’ll make working easier for them. Impose staycations that’ll help them take the break they’ve been reluctantly failed to enjoy just because they dread missing deadlines.
To improve the retention rate at your company, pay attention to their demands and address them accordingly. Employees will choose to stay in a company that prioritizes their satisfaction.
Not all resignations are bad
Before you consider the resignation letters at your table a failure on your career path, you need to understand that the intention behind each letter varies. While some may be a result of a mismatch in values and expectations, others might be the result of your consistent contribution to the employee’s growth.
If the employee leaves when they have grown with the company for a long time, it indicates that you have done a very good job in mentoring subordinates as a manager and a leader. Now it’s time for them to find new journeys and you can continue growing your team further.
Every company needs to refresh its pool of talents periodically in order to give opportunities to the young generations. They would be potential management teams with their innovations and breakthroughs in strategy as well as vision.
Take precautionary steps to prepare for the great resignation
Employees are your company’s most valuable assets and they need to be treated accordingly, especially at a time like this. To prevent burnout and reduce their risk of coronavirus exposure, you should have them work remotely or adopt the hybrid work model. This way, employees get to spend more time with their loved ones in a tough time like this.
The great resignation 2021 could end soon if more leaders recognize the existing problems in their organizations and workforce and introduce the measures as soon as possible. This wave can hit the Asia market soon, so it’s time for Asia leaders to prepare for it right now!