Employers are facing stronger headwinds than they’ve encountered in years, from a tight labor market to increased worker mobility (particularly as a result of the shift to remote work). This has led to what’s known as the “Great Resignation,” which refers to hyper-turnover and extreme competition for qualified employees.
While the Great Resignation is being driven by several economic shocks caused by the COVID-19 pandemic, it’s a mistake to assume that the situation will inevitably return to normal. Major trends like remote work are here to stay, which means employees will continue to enjoy flexible work environments and a more frictionless process of switching jobs, while the competition for talent will remain intense. This means companies will have to make significant changes to their hiring strategies, from improving the speed and accuracy of the hiring process to focusing on culture and engagement – key elements of employee retention.
The Great Resignation may be with us for a while, as it reflects long-term trends in hiring and retention just as much if not more than it does temporary imbalances in the labor market. While this will put pressure on hiring managers, it will also give companies a unique opportunity to set themselves apart from competitors. If you can win and keep talent in a tight labor market, you’ll be in a strong position to secure growth in the coming years.
Getting serious about your people strategy
The ability to build and maintain a top-tier workforce has always been the most crucial determinant of a company’s success, but this need is more pressing now than ever before. The U.S. Bureau of Labor Statistics reports that the number of people voluntarily leaving their jobs hit a “series high” of 4.4 million in September 2021 – another reminder that we’re still in the middle of the Great Resignation. Companies have to consider the possibility that turnover rates will remain elevated for the foreseeable future, which will require them to adopt an “always on” hiring strategy.
This doesn’t just apply to large and dynamic industries, either. Even companies in low-growth industries will have to make unprecedented investments in talent acquisition to prevent crippling attrition. The quit rate has continued to surge even as the global economy has stabilized in other areas, which means companies have to account for the possibility that the Great Resignation is the result of fundamental changes in employment patterns. Companies shouldn’t try to wait it out – the end is nowhere in sight.
Beyond more proactive hiring strategies, the Great Resignation should inspire company leaders to rethink other basic elements of their business: what makes their company an attractive place to work? What do employees need? How can the company culture be improved? The answers to these questions will have a huge impact on growth over the next few years.
How to attract and retain employees
While the shift to remote work represents a drastic change in how people work, it has also permanently altered employee demands and expectations. Employees are demanding an unprecedented level of flexibility and autonomy, and the most competitive employers understand that meeting these demands will be crucial to building and maintaining healthy workforces in the coming years.
A critical driver of retention is engagement. According to data from Gallup, just 20 percent of employees say they’re engaged at work – a status quo that has a dramatic negative impact on morale, productivity, and retention. One essential contributor to engagement is the perception that employees’ voices are being heard and their concerns are taken seriously. This is why companies need to consistently track employee sentiment through pulse surveys, frequent interactions with managers, and other forms of feedback. When leadership teams discover problems that increase the risk of turnover (such as a lack of flexibility, onerous workloads, or a lack of opportunities for advancement), they should address these problems proactively.
When companies focus on problems like a lack of engagement, they’ll improve productivity, reduce the risk of turnover, and make themselves more attractive to prospective employees. At a time when talent is scarce and employees’ demands are continuing to shift, companies have to make retention a core part of their people strategies.
Reassessing hiring and retention in an era of hyper-turnover
There has never been more pressure on companies to quickly identify and onboard promising candidates. This means hiring managers will need to rethink how they hire – from the reliance on legacy processes like resumes and interviews to how they engage with prospective employees about what their companies have to offer. As we enter a new era of work, assumptions about issues ranging from workplace culture to hiring and onboarding to benefits packages will have to be reconsidered.
Take culture, for instance. More than three-quarters of employees say culture matters when they’re deciding where to work, while two-thirds say it’s what keeps them at their jobs. But how does remote work affect the effort to maintain a healthy culture? Companies need to develop ways to build relationships and facilitate collaboration in the remote work era, such as ensuring that managers are available to receive feedback and help employees work through problems. It’s also vital to determine whether managers are effectively engaging with employees. Benefits packages and programs may need to be changed as well – for example, services and amenities that are offered on-site will need to make the transition to remote availability.
Finally, companies have to be capable of finding and hiring the right people as quickly as possible. This can be done with tools such as objective assessments of candidates’ skills and other relevant characteristics, as well as online processes that give companies access to wider talent pools. It’s time for companies to accept that the Great Resignation could be with us for a long time – and take immediate action to navigate it more effectively than their competitors.Business & Finance Articles on Business 2 Community