What is The Great Resignation and How Can You Handle It

The Great Resignation has affected companies in every industry. Talented employees are packing up and leaving, either for new roles, to take a career break, or to change their career path entirely.

In this guide, we’re going to dig into exactly what the Great Resignation is about, what the primary drivers are, which types of industries and candidates are most affected, and of course, strategies you can implement to reduce the chances of your own team leaving your company.

Ready? Let’s jump straight in.

What is the Great Resignation?

 

The Great Resignation is a coin termed by analysts for the surge in employees deciding to either hand in their notice and leave their roles or switch jobs for better pay, a new environment, or an improved work-life balance.

 

According to Gallup, approximately 48% of America’s working population is actively job hunting, and there is a record high for unfilled positions.

 

Microsoft found that 46% of the global workforce is planning to make a career pivot or transition.

 

The Great Resignation poses a new challenge for businesses. You’ll need to ensure that you, as an employer, are making sure your employees feel valued and empowered enough to stay with your company for the long haul.

 

Why is the Great Resignation happening and what factors are driving it?

 

There are multiple reasons for the Great Resignation. Let’s take a look at some of the biggest driving factors.

 

1. COVID-19 was the driver

 

The COVID-19 pandemic was arguably what pulled the trigger that started the Great Resignation. 

As millions of people around the world were put in difficult situations, such as being furloughed, losing their jobs, or needing to adapt to a new work-from-home model, many realised they were ready for a change.

As well as that, employees realised that they don’t always need to be in an office to be productive and generate results for their company. If a company demanded them back into the office before they were ready, or on a schedule that didn’t fit with their lifestyle, they knew there would be other companies offering those remote or hybrid opportunities.

In short, the changes in the labour market mean employees and candidates have more power over their employment status than ever before. 

 

2. A challenging time for employee engagement 

 

Employee engagement is costly. The lost productivity from disengagement is equal to 18% of a full-time employee’s salary. If you’re working in tech, or similar industry where salaries are typically high, the costs of disengagement to your company will add up quickly if you can’t solve the problem.

With working conditions changing and people re-considering their career paths, many employees across all industries realised that they either weren’t fully engaged with their current role and company or grew disengaged.

In turn, they began to look for new opportunities to interest and engage them.

 

3. More people are feeling burned out from work

 

Did you feel a little more tired this year than in past years? So did your team.

 

54% of employees feel overworked, and 39% feel exhausted after a year and a half of working from home combined with disruptions to their lives.

 

Burnout is a serious problem and chances are, people on your team are affected by it.

 

If you can’t build processes to help engage your team, empower them to do their best work, but at the same time, give them the breathing room they need after a difficult time, there’s a risk that they decide it’s time for a career move, or break.

 

Which type of workers are resigning?

 

The Great Resignation has affected nearly every type of worker. The US Bureau of Labor Statistics data shows that, on average, all industries have had more people quitting, and more job openings this year compared to previous years.

resignation stats

Source: Infographic: US Job Openings Hit Record High as Workers Quit in Droves

 

Typically, younger employees get the blame for job-hopping. But in this case, the resignation rates have been at their highest for people in the middle of their careers.

 

The increase in resignation rates for employees aged 30 – 45 has increased by over 20%, and analysts are discovering it’s because these employees have built up enough experience to fit into any new role of their choosing.

 

These employees are also more financially stable than younger employees and have more flexibility to take a career break if they choose to, as they know their experience and skills will allow them to jump back into the workforce any time they want to.

 

Harvard Business Review also found that employers see mid-level employees as a lower risk during the hiring process. They’ve worked for long enough to prove they can do their jobs effectively with minimal supervision, so in a remote-first and hybrid-work world, they may be seen as a safer choice than a younger employee that’s new to the workforce.

 

How has the tech industry been affected by The Great Resignation?

 

While there has been a total increase in resignations and organisations in every sector have struggled to find key hires, the tech industry has been particularly affected.

 

Data from Statista shows that tech is the second-most affected, only after hospitality. 

Source: Infographic: Where Employers Struggle to Fill Open Positions

 

This is for a few reasons.

 

1. A high proportion of tech roles can be done remotely

 

A large percentage of tech workers moved to a remote-first work environment, and it looks like that trend is here to stay.

 

Tech workers want to stay at least partially remote, with options like hybrid or optional office days being available if they need them. In the past, remote roles had typically lower salaries than those available in tech hubs and large cities, but over the past year, remote salaries have increased by an average of 5%

 

Companies know that to keep up, they’ll need to adapt their working practices to attract top tech talent without compromising on their salary and benefits packages.

 

2. Tech workers are in high demand

 

McKinsey’s data show that UK-based companies were struggling to find and hire skilled tech talent even before the pandemic. Today, the problem has only continued to grow.

 

Tech talent includes people working in roles such as software developers, data analysts, or any other similar IT-related job.

 

Companies in all industries need developers and engineers, so demand is always high, which puts more power in the candidate’s hands.

 

If they don’t want to work with a company because they don’t offer a remote work option, they don’t have to. Or, if another company offers more stock options and a better work-life balance, making the switch is an easy decision. 

 

According to data from Hired, the average time-to-hire for tech roles in the US is at record lows of 30-days, and in the UK, it’s only marginally longer at just 34 days. 

Source: 2021 State of Tech Salaries

 

Tech workers know they can easily step in and out of roles that offer the package they’re looking for, and companies need to move fast if they expect to hire their perfect candidate.

 

3. Tech companies have big demands from employees

 

Another reason for the tech industry being so affected by the Great Resignation is that demand for digital tools, services, and solutions boomed as companies moved to remote work and spent more time online.

 

Harvard Business Review also found that resignation rates were higher in industries where demand surged during the pandemic.

 

Tech workers who know their skills are in demand don’t have a reason to stick with a company if they’re overworked or under-compensated for the work and hours they’re spending at work.

 

Strategies to implement in your hiring strategy to attract new talent

 

1. Review your salary and benefits package

 

Salaries have always been important to candidates in every industry.

 

When it comes to tech, it’s vital that you pay the market rate of what your candidates expect, or, offer attractive benefits packages that offer compensation in different ways.

 

Data shows that 76% of tech candidates say they’re happy to accept a lower base salary if they get other pay-related benefits.

 

12% would accept a lower salary for remote work, but it’s clear that remote work is no longer an alternative to paying a competitive salary rate.

 

To avoid your company becoming a victim of the Great Resignation, it’s important that you review your salary offers and benefits packages, both for new employees and your existing teams. If you can offer a package that rivals one they’d get anywhere else, your team will be more likely to stick with you.

 

2. Make remote work a company norm

 

You can’t treat remote work as a benefit anymore. It needs to be a standard part of your work agreement, at no cost to your employee.

 

Naturally, not every company can operate with a fully remote team, but consider offering a hybrid model (at the very least) with flexibility.

 

90% of tech workers want a remote-work option, so it’s a simple but effective way to help your company attract and retain your talent.

 

3. Build a candidate pipeline before you need it

 

As we’ve seen, skilled tech workers can switch jobs with minimal effort on their part, and companies will be happy to have them.

 

No matter how happy and engaged your employees are, there’s always going to be turnover, particularly in the era of the Great Resignation.

 

To keep your employee turnover from having a significant effect on your day-to-day operations, you need to be working on your candidate pipeline before you even have an open role.

 

There’s no single rule to what you should be doing for this, but some ideas include:

 

  • Create an engaging ‘team’ page on your website highlighting key benefits of working at your company
  • Have your team post and share company updates on LinkedIn
  • Audit your job descriptions to make sure they attract a diverse range of talent

 

You’ll be able to have conversations with potential candidates before you need to urgently fill a vacancy, and if you find the right candidates, you may have opportunities to open up roles specifically for them.

 

In a candidate-driven market, being proactive instead of reactive is how you’re going to have a competitive advantage when hiring compared to other companies. 

 

4. Engage your existing employees to reduce turnover

 

You can’t ignore the importance of keeping your existing team engaged.

 

37% of employees say their companies have been “asking too much of them” over the course of the pandemic, so it’s important that you critically assess whether you’re asking too much of their team.

 

Look for ways to give your team a break, whether it’s allowing hybrid-work styles to help your team fit their role around their life, or encouraging your team to stop checking their Slack messages when they’re out of office, even small changes can help.

 

It’s also important to audit your management style: Gallup found that if a manager isn’t successfully engaging employees, candidates don’t even need a pay increase to switch roles. On the other hand, it costs more than 20% more to tempt a candidate away from a manager who engages them.

 

There’s no single solution to employee engagement. You’ll need to work directly with your team, regularly collect feedback, and continuously look for ways to improve how your employees feel at work.

 

In summary

 

The Great Resignation isn’t only affecting your company — it’s hitting companies worldwide.

 

The tech industry in particular is feeling the effects of the Great Resignation. Unfortunately, there’s no single solution to this trend.

 

You need to consider what your employees (and future candidates) care about, and adapt your workplace to fit that. 

 

Whether it’s offering more remote work, reducing meeting time, or reviewing your salary and benefits packages, there are always ways to improve engagement: but it’s up to you to find them.