The Great Resignation: Does Everyone Just Need a Holiday?
The millions of businesses that have been affected by the Great Resignation/the Great Reshuffle/the Great Rethink, call it what you will, are all wondering what can be done to retain their best and most valued staff and may also be creating an employee proposition that can attract the best of that migrating talent.
According to Microsoft’s recently published 2022 Work Trend Index, some 52 per cent of Gen Zs and Millennials are likely to consider changing employers this year, an increase of three per cent year on year. In November 2021 a record 4.5 million workers left their jobs, according to the US Labor Department’s latest Job Openings and Labor Turnover report.
That same Microsoft research also says 53 per cent of employees are more likely to prioritize health and well-being over work than before the pandemic; while 47 per cent say they are more likely to put family and personal life before work than they were before Covid.
Anthony Klotz, an organizational psychologist and professor at Texas A&M University, who is the originator of the phrase ‘Great Resignation’, predicts that the trend will slow down, flexible working will become the norm and remote jobs will become more competitive.
There are any number of other surveys and anecdotal evidence that strongly suggest a shift in the plate tectonics of workplace attitudes.
The Cost of Losing Employees
Losing your best employees is not only detrimental to productivity but it is often an expensive and time-consuming process.
According to research by Oxford Economics and Unum, the average cost of turnover of an employee earning $30,000 a year or more is $37,367.
The more senior the position that needs filling, the more costs rise. Replacing an entry-level employee costs anywhere between 30-40 per cent of their annual salary. For a mid-level employee, it shoots up to 150 per cent of their salary and replacing a highly skilled employee can cost up to 400 per cent of their salary.
There is a formula, of course. To find a $50,000 job’s daily compensation, you divide $50,000 by 261 (there were 261 working days in 2021) to get $191.57. Then multiply the daily compensation by the days you expect the job to be vacant, which is 30 days. So, 30 x $191.57 = $5747.10.
Then you have to calculate hiring costs, onboarding and orientation, and allow for a loss of productivity while your new hire gets to grips with the role.
So, the argument for keeping your best people is strong not just in terms of maintaining standards and outcomes but also makes fiscal sense as well.
Why Are So Many People Resigning?
To find a way to keep them you first must understand what the motivation is behind their desire to seek greener pastures.
According to Cengage, workers are burnt out and want more pay. But they are willing to make personal sacrifices to get a new lease on their professional lives. Some 71 per cent said they had to or would have to be out of work to find a new role.
While there are many factors at play, the top reasons for quitting were:
Wanting to make more money (91%)
Feeling burnt out and unsupported (89%)
No longer feeling like I am growing in my position (83%)
The pandemic and the sudden shift towards working from home certainly gave pause for thought. For many, in a very real struggle between life and death, work suddenly became less of a consideration and once that particular box has been opened it is very hard to shut the lid on it.
But in addition to the many resignations, Data from the Society of Human Resource Management (SHRM) shows that sabbaticals have tripled in the past four years, in large part because of Covid.
It’s also because more companies are now offering it to employees. Again, the SHRM says 17 per cent of companies now offer a sabbatical - a 13 per cent increase from eight years ago.
Employees Recognize Their Value
Increased wages are always motivational for employees (that’s why people work, of course) but it’s not a long-term motivation and with interest rates rising and the economy worldwide wobbling as it recovers from the pandemic and now also experiencing shockwaves from the war in Ukraine, wage bills are not heading north right now.
What is clear is that employees are now more cognizant than ever of their value to an organization, and employers need to formulate an attractive employee value proposition that satisfies the renewed focus on work-life balance.
Recent data from Gallup suggests that nearly half (48 per cent) of workers are contemplating a job change and nearly a quarter will do just that in the next six months. That still means 75 per cent of those will stay, but they may be expecting that loyalty to be rewarded through innovation in their working arrangements.
The role of an employer brand is to hold a mirror to the reality of a workplace, through a forensic assessment of practices and attitudes among management and employees at all levels, but not to steer or influence what a company does in response to it.
As part of an employee value proposition with a culture of well-being at its heart, paid (or even partially paid) sabbaticals could not only provide an alternative to that previously mentioned 89 per cent of workers feeling burnt out and unsupported but could also form part of an attractive EVP to attract the best new talent.
If a work sabbatical is something a company wants to include as part of its EVP then the reasons for it need to be clearly communicated. If employee wellbeing and value is at the heart of it then that’s great but if a more honest summary is also that without it you are likely to experience that burn-out and a loss of motivation then it’s an aspect that needs to be conveyed.
It could be a pillar of your ‘Give and Get’ employer brand framework outlining the quid pro quo of working for a company.
With remote and hybrid working having shaken the workplace snow globe, good employers will be thinking about a balanced package of incentives including items from the wish list that includes unlimited holiday, flexible working, extended leave and yes, sabbaticals.
While it is a tasty incentive to offer, ultimately it is honesty and authenticity, clearly communicated and central to a discovered set of values that will play the bigger part in retaining your best employees.