The pandemic has not only upheaved our personal lives over the past year and a half but it is doing the same to our professional lives as well. The U.S. Bureau of Labor Statistics reported that 4.3 million Americans (2.9% of the entire workforce) quit their jobs in August. This is another record-breaking month after the previous record-breaking months. At the end of July, there were 10.9 million open positions in the U.S. In a survey conducted by Morning Consult for Prudential in mid-September, they found that 46% of full-time employed U.S. adults were either actively looking for or considering a new job search. Why have so many workers decided to forge a new path and call it quits with their current employer? And what does it mean for small business owners?
Why the Great Resignation?
The current massive resignation wave was not a surprise to Anthony Klotz. The associate professor of management at May Business School at Texas A&M University, who coined the term “Great Resignation”, anticipated it would happen. He based his prediction on several factors, including that less people quit their jobs during the start of the pandemic (even if they really wanted to), burnout and asking existential questions about one’s purpose and happiness in life.
The pandemic has affected everyone in different ways: mentally, physically and financially. The myriad of reasons employees are voluntarily choosing to change jobs and even change careers are largely relatable to both employees and employers.
“When human beings come into contact with death and illness in their lives, it causes them to take a step back and ask existential questions," Klotz says. "Like, what gives me purpose and happiness in life, and does that match up with how I'm spending my right now? So, in many cases, those reflections will lead to life pivots.” One of the biggest pivots being a chance at a new path of employment.
These “pandemic epiphanies'' have helped many people realize they want more from their job and an improved quality of life. As Klotz mentioned, burnout has also been a significant factor in the Great Resignation, particularly among workers in the service industry. Employees that are overworked, underpaid and underappreciated feel a greater need to pursue other career opportunities. Employee mental health directly links to an employee’s sense of burnout and family/work balance.
At the start of the pandemic, millions of Americans suddenly found themselves working remotely. Many employees have discovered they prefer this recent shift from the office to home and it is a good fit for their lifestyle. They do not want to give up their autonomy and feel they can be more themselves while working from home. They can dress and style their hair however they choose and deal with fewer micro-aggressions present in the physical workplace. Working remotely has allowed more freedom and greater scheduling flexibility and many Americans would prefer to continue to work remotely or in a hybrid role.
Increased economic independence among Americans has also contributed to the Great Resignation. In 2020, American household debt actually decreased for only the second time in thirty-five years, according to Klotz. This has led to an increase in early retirements and employees taking personal sabbaticals.
All of this has led American workers to demand more from employers and seek out better working options for themselves. Klotz suggests that this should create a moment of reflection for employers. "I think we are entering a period of time where companies are trying to figure out, 'Who are we in this new world of work? What kind of schedule do we want to give our employees?'"
Ways to Combat the Great Resignation
As a small business owner, losing even one or two employees can be detrimental to the health and sustainability of your business. It is imperative that quality employees feel compelled to stay at your company. Take time to formulate ways to make sure your current employees are happy and valued.
Here are some key ways to work toward that goal:
- Have a “job crafting conversation” with each of your employees. Discuss what your employees like and dislike about their job and how to make small changes or “tweaks” together.
- Don’t disregard the “remainers”. These workers left behind after other employees have quit are taking on the work of numerous people. Be intentional about finding ways to alleviate their stress.
- Support your employees' mental and physical health. Acknowledge that burnout is real and the struggle to balance work and home, especially for women dealing with virtual school and childcare. Provide mental health resources, flexibility for parents balancing school scheduling changes/quarantines due to COVID, flexibility to work remotely or at altered hours.
- Appreciate your employees. Find ways to let them know you care and value their hard work. A gift card, catered lunch or personal thank you can boost employee morale.
- Add incentives to lure new hiring prospects. As a small business, costly incentives such as paying college tuition and big bonuses are not feasible but small incentives can go a long way in enticing new employees. Giving employees the day off for their birthday, boosting pay where possible or offering a stipend for at-home internet could be the difference between a prospective employee choosing you over a competitor.
- Explore rehiring “boomerang employees”. Reconnect with former employees that have left in the past year or two on good terms and entice them back. Rehiring former employees saves you money on recruiting, training, and lost work time. They are already familiar with the company and their fellow employees and have often gained new skills and experiences they can bring back to your organization.
There is hope for employers that these strategies are working. In July, the succession planning consulting firm SRG, polled financial advisors about how many of their team members had resigned over the last three months. 73.51% of the advisors polled said they did not lose any employees in the previous three months. In fact, 17.88% of those advisors actually hired more employees. 21.19% had at least one employee resign but 7.28% of those also hired more employees.
Only time will tell how long the Great Resignation will last and what the ultimate results of the pandemic will be on the American workforce. But Klotz offers some words of optimism: "One hopefully silver lining of this horrible pandemic would be if the world of work transitioned to a more healthy, sustainable place for employee wellbeing.”
Whether your focus is to acquire more workers and invest in the expansion of your company or hop on the retirement bandwagon to enjoy the benefits of your hard work, you need someone trustworthy to help you decide your best course. Succession Resource Group (SRG), a succession planning consulting firm, is dedicated to helping small business owners like you, value, grow, protect and plan for the transition of their company. MyCompass, a site listing available practices for sale, and LendingWell, an online platform that matches you with the right lending solution, are two valuable resources SRG offers to guide you in your decision-making.