The Great Attrition/Resignation: What is the 'Big Quit'? 💼
What is the 'Big Quit'? Why are people leaving coveted jobs? + Ep 3 of the podcast.
Hi, Ravdeep here. 👋
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Did you know that a record number of employees are quitting or thinking about doing so? Let’s take a deep dive into what this is, why is this happening and how can companies make the best of this situation.
What is ‘The Great Attrition/Resignation’ or the ‘Big Quit’? 💼
More than 19 million workers in the United States have quit their jobs since April 2021, and 64% of employers have pointed out that they expect employee turnover to get even worse according to a research report from McKinsey & Company.
This “resignation pandemic” has also been seen in India as well, with talent acquisition numbers going through the roof, even crossing the pre-COVID levels. The job market has grown by 11% in July, owing to this phenomenon. India’s IT sector has reported an increase of 52% in hiring of skilled professionals and this has been the highest spike in the number of hires in this decade. A study commissioned by Amazon India in September 2021 revealed that nearly 51% of job-seeking adults wanted to pursue opportunities in industries in which they had negligible or no experience and 68 % of them wanted to switch industries.
Major trends seen in this movement 📈
HBR conducted an in-depth analysis of 9 million employee records from more than 4,000 companies. This global dataset included employees from a wide variety of industries, functions and levels of experience, and revealed two major trends:
30 to 45 year olds have the greatest resignation rates → This age range had an average increase of more than 20% in resignation rates between 2020 and 2021. While turnover is generally higher among younger employees, resignations have actually decreased for workers in the 20 to 25 age range, mostly owing to greater financial uncertainty and reduced demand for entry-level workers. Resignation rates also fell for the 60 to 70 age range as well. Why is this happening?
Remote work has led employers to feel that hiring people with little experience would be riskier than usual, since now, the new employees that are hired are not getting the benefit of in-person training and guidance. This creates greater demand for mid-career employees, thus giving them greater leverage in securing new positions.
It is also possible that the mid-level employees delayed transitioning out from their current roles due to the uncertainty that was brought on by the pandemic, which means that this phenomenon of the ‘Big Quit’ is just the pent up resignations that were expected any way.
Workers have reached a breaking point after months of high workloads + virtually no work/life balance, which has driven people to rethink their work and goals.
Resignations are the highest in tech and healthcare industries → While resignations have decreased slightly in the manufacturing and finance industry, resignations in the health industry increased by 3.6% whereas in the tech industry, they increased by 4.5%. Resignation rates were higher among employees who worked in fields that had experienced extreme increases in demand due to the pandemic, likely leading to increased workloads and burnout.
What are the causes of this phenomenon? 🤔
In a survey conducted by McKinsey & Company, 40% of employees interviewed said that are at least “somewhat likely” to leave their current job in the next 3-6 months. The breakdown of the reasons why they wanted to leave was as follows:
54% of employees felt undervalued by managers.
52% of employees felt undervalued by the organisation.
51% of employees didn’t feel a sense of belonging at work.
Non-white and multiracial employees were more likely than their white counterparts to quit because the didn't fit in.
According to the research, employees were far more likely to prioritise relational factors, whereas employers are more likely to focus on transactional ones. When employers were asked about why their employees were leaving, they gave the same old answers - compensation, work/life balance, and poor physical & mental health. But going by what the entire population of the world has gone through in the last 2 years, it is now evident that employees are looking for something more than just a big paycheck for them to stick around.
Why are some people calling it ‘The Great Attraction’? 🚪
I believe if employers are willing to make a few right changes and make an active effort to retain their employees, this Great Attrition can become a Great Attraction instead. The pandemic has changed people’s expectations, from their work and their employers, and it will continue to change as the hybrid work models are implemented.
A few ways how this can be done by employers, starting right now:
Upskilling/Reskilling Programmes: Continuous development and empowerment is required to ensure the retention and motivation of employees. Training and feedback helps make the company more attractive to prospective employees and existing ones.
Professional Development: By offering development opportunities, employers can make their employees feel more valued. This creates an incentive for them to stay. If the employees feel they can acquire and develop new skills, they will feel more recognised for their work and are more inclined to stay.
New Talent: Companies should not only work on retaining current talent but also focus on attracting new talent as well. This provides current employees a sense of pride when they see outside talent vying for a role at their organisation.
Personal Wellbeing: Development of wellbeing policies can help support employees in their work, making them happier. The concept of Work/Life balance has faded away and in the hybrid era, employers need to be very considerate about flexible work hours, plenty of holiday time and less actions that take away too much time such as meetings, catch-ups etc.
Getting rid of Toxic Leaders: Executives or company leaders that do not make their people feel valued can drive them away from the company, with or without a new job. Unlike the past years, employees do not stick around as better opportunities are available to them.
Culture: Office culture that was prevalent before COVID might not have kept up with the employees as their needs have also changed over this time. The organisation needs to be aware of this and decisions should be taken keeping this in mind.
Making the work environment less transactional: If an employer’s response to attrition or resignation is to just increase compensation, it sends out a very transactional signal which the employees are not attracted to anymore. Best employees will always have a larger paycheck available to them someplace else.
Community: Feeling a sense of belonging or feeling a part of something big is what attracts employees in the post COVID era. There is no substitute to being a part of a community and employers need to recognise that this is not something that can be bought with money, it is something that happens gradually over time with a lot of effort and attention. I personally believe this is the single largest factor that employees are craving in today’s scenario.
I believe the 'Great Resignation' could be a great opportunity for a career reboot for many people. India is definitely one of the hotspots of this phenomenon as people are realising that work can be done sitting in any corner of the world. I am a stern supporter of the hybrid work era but I do believe that there have to be better ways to handle how remote work is being done these days. What do you think about this phenomenon? Have you seen this happening around you? Do write back to this email and let me know!
Thank you and have a brilliant week ahead. Would be great if you could share the newsletter with your friends and family as that helps a lot and hit that little heart button!