Human Resources

The Great Resignation: Why It’s Happening and What You Can Do About It

the-great-resignation-why-it-s-happening-and-what-you-can-do-about-it

 


Enrol today >

Enhance your career with a globally recognised CIPD qualification.


 

A three-word phrase is striking fear into the hearts of employers across the world.

The Great Resignation, as it’s becoming known, is sending HR departments and management boards into a level of panic not seen since the start of the pandemic.

So, what exactly is it? How has it come about and – most importantly – what can we do, as HR professionals, to mitigate its impact? We explore a few thoughts below.


What is the Great Resignation?

First of all, let’s define what exactly this phenomenon is. The Great Resignation is the name that’s being given to a mass wave of resignations that started in the USA in 2021 and that’s been spreading around the world since.

Employees are, quite simply, handing in their notices and finding new jobs – en masse. No one industry is being spared, but the phenomenon appears to be particularly affecting sectors such as hospitality, retail and services.

Some economists are even likening the Great Resignation to a global general strike: a mass movement of employees withdrawing their labour from jobs that provide paltry wages, poor conditions and a terrible work-life balance, as is their right under free-market capitalism.

And, to be honest, when you look at the economy and the nature of work in the 21st century, it’s hard not to sympathise.

With US inflation at its highest level in 40 yearsUK inflation at a 30-year-high, and workers’ pay not rising enough to meet it, it’s no surprise that employees are leaving positions that just aren’t allowing them to support themselves adequately.

After all, the right to buy, sell and crucially, withdraw labour is a fundamental feature of capitalism. Employees are simply exercising one of the few rights they have when it comes to employment: choosing who they want to work for.

That said, there’s no denying that the Great Resignation has caused and is causing havoc and economic pain for businesses across the USA right now, where the phenomenon seems to be particularly strong.

Worryingly for employers though, there are signs that the resignation wave is spreading. In the UK for example, the rate of workers resigning from their roles is the highest it’s been for a decade. That spells serious trouble for employers.

One or two employees resigning every so often isn’t a cause for concern, but when entire teams are handing in their notices within the space of weeks or months, it’s clear that something strange is happening.

pexels-andrea-piacquadio-3772618

 

Software organisation CocoDoc has experienced the effects of the Great Resignation first hand. Alina, co-founder of the company, says that it has fundamentally altered the way that the company now operates.

“Losing five employees within two days was a jolt back to reality for us. We had never, in all our imaginations, thought that we'd have to reconfigure our business model to accommodate missing employees and find new ways to fill the spots that they left,” she says.

As well as altering the internal structure of the workplace, losing employees has led to Alina’s company having to readjust plans for future growth.

“Ultimately, the Great Resignation made it harder for us to scale our business as we had planned to. After all, we couldn't attempt to go into intense scaling mode when we were short-handed.” she says.


Why is the Great Resignation happening?

Well, to put it bluntly, no-one really knows. There are some theories though.

One school of thought is that the Great Resignation is a consequence of the decisions that employers took at the start of the pandemic with regards to their staff, and that the long-term impact of these decisions are now only just beginning to be felt.

When lockdowns hit and businesses were squeezed, employers desperately tried to shore up their bottom lines. To prevent their businesses completely going under, many owners laid off their employees or took advantage of the government furlough scheme.

Sometimes, even this drastic action wasn’t enough to ward off disaster – in the period March 2020 to April 2021 at least 800,000 employees lost their jobs. Sectors like hospitality, retail and leisure were particularly affected, with over 600,000 hospitality workers in the UK losing their jobs in 2020 alone.

Losing your job, or worrying that you may be about to, can often act as an impetus for taking stock of your career – where you are, where you want to be, and how you can get there. The current thinking is that people have used their time during lockdown to assess how their careers have been serving them.

And with sectors like hospitality and retail notorious for their low pay and long hours, the answer appears to be: not well.

Anthony Martin, CEO and Founder of Choice Mutual, interprets the Great Resignation as being caused by a change in what employees want, and expect, from work.

“A shift in employees’ priorities is causing the Great Resignation,” he says. “People want a job that provides what they need – whether that’s more lucrative and thorough benefits (benefits for their family) or meets their new work/life schedule needs (caring for kids). Being used to remote and flexible schedules changed things, so employees are willing to find it elsewhere when put back into strict schedules.”

With COVID-19 having opened up existential questions about the meaning of and nature of work in the 21st century, it’s no surprise that employees have been thinking about how they can make their careers serve them and not the other way around.

 After having worked from home for nearly two years, with all the freedom, flexibility and autonomy that entails, many people are now being asked (or forced) to return to the office – and many are finding themselves reluctant to give up their new-found liberty.

The answer, for many, is to resign from their current role and seek a more flexible and fulfilling one.

Stephen Connolly, a content writer who now works for Interact Software, was one of these employees. “The company I worked for before I joined Interact was not explicitly set up for remote working and it was hard for them to immediately put processes in place which would effectively balance life and work,” he says.

“There was a creep of work into daily life (longer hours, too much screen time) and this led to greater feelings of stress and a difficulty in switching off. At a certain point that became unmanageable and I had to take a step back and decide what was in my own best interests over the long term.”

In Stephen’s case, that meant finding a new job where he felt his worth as a worker was celebrated. “I realised that I needed to make a change and be part of a company where workplace communication was more effective and everyone felt recognised and valued.

“I think my experience is typical of what many people have felt, and which has led to so many people voluntarily changing jobs.”

 

pexels-sarah-chai-7282818

 

Solutions: a hybrid working future?

As Stephen’s story suggests, a bumpy transition back to face-to-face working, after nearly two years of being remote, is also likely to be playing a role in employees handing in their resignations.

The contrast between the freedom and flexibility of remote work and the discipline and supervision of office-based work is jarring for many people.

Because of this, offering hybrid and flexible working is one of the key strategies employers can use to mitigate the impact of the Great Resignation – helping them tempt more workers into their organisation as well as retain the staff that they have.

Richard Lubicky, founder of RealPeopleSearch, agrees that employers will have to allow some degree of remote work in order to cope with the effects of widespread resignations. “One possible way to deal with the great resignation is to opt for alternative strategies such as remote and/or hybrid work environments, which many companies have chosen as an immediate solution.” he explains.

You could interpret the Great Resignation as a reaction against traditional working patterns and as a demand for a radically different future. Which leads us to our next question: how can we make that future happen in our organisations?


How you can combat the Great Resignation

Terrified at the prospect of half of your treasured team upping and leaving with little warning? Here are some tactics you can use to reduce the risk.

1.    Create a remote or hybrid work strategy as a matter of urgency

One of the biggest factors influencing resignations is the transition away from remote working. Many employees like the flexibility and work/life balance that comes with remote work and aren’t too happy about giving it up by returning to the office full time.

Embedding a form of remote work into the way that your company operates will give your retention efforts both a short-term and a long-term boost.

2.    Develop your employee retention and engagement strategy

If you don’t understand the current state of employee retention in your workplace, you’ll be doomed to repeat the errors of the past. An employee retention strategy should survey all the factors affecting retention in your organisation, from employee turnover and engagement to any existing retention policies that you have in place. Your strategy will outline how you can improve, ultimately aiming to make your organisation a place that people are proud to work.

An employee retention strategy is a plan for success. And when it comes to beating the Great Resignation, you’re going to need one.

3.    Improve employee pay, conditions and work/life balance

One of the best ways to improve employee retention in the short-term is to increase how much you’re paying your employees. As we mentioned above, inflation is reaching record levels and employee pay over the last decade, more often than not, has failed to keep pace.

By raising salaries to a level that will at least neutralize the impact of inflation, you’ll be treating your employees fairly and communicating that they’re valued members of the team – key to making your company a great place to work.


There’s no doubt that these past few years have been tough ones for business, and the Great Resignation is presenting leaders and HR professionals with yet another crisis at a time when many are already overloaded.

However, with a thoughtful and considerate approach that puts the needs and desires of your employees first, you should be able to weather the storm.


Climb the HR career ladder with a professional qualification that you can complete entirely from home. Download free your CIPD course guide today.

Ready to advance your HR career?

Request your guide to getting CIPD qualified online with unlimited 1:1 tutor support and interest-free plans.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Learn how we keep your data private