"The work deal started to become unfavorable for many people during the pandemic."
For C.E.O.s of companies of any size and People leaders, "The Great Resignation" feels real. And it is real. In 2021, one in every five non-retired U.S. adults has quit their jobs, says the March 2022 data from the Pew Research Center. In the last months of 2021, the jump in resignation neared 30% higher than in previous years - shows the U.S. Bureau of Labor Statistics data. Check the Great Resignation in numbers in the graph below.
Regardless of the fundamental reasons people decided voluntarily to resign in the last months, data shows that the work deal started to become unfavorable for many people during the pandemic. In this recently inaugurated new era of work relations, we all have experienced an unforeseen economic squeeze and witnessed mental health awareness assume a new protagonist role in the corporate world's list of concerns. Both were powered by people's unplanned available time to reflect and new personal dynamics at home. During the pandemic, many people reached the threshold where changing work scenarios became more attractive than stability in this complex new reality. The detailed data shows that the declared reasons for leaving vary with the employee's level of education, gender, and ethnicity. But they all align around a few themes:
- 63%, Compensation
- 63%, Development, and Personal Growth
- 57%, Toxicity
- 45%, Misalignment with personal goals
One of the simple definitions of change I like the most, says that change happens when the future state looks better than the current state. In the pandemic case, even the uncertainty of prospecting new jobs seemed more attractive than keeping the same old one for many people. It also should make us wonder how many more people are close to reaching the same breaking point and what that will mean as the total impact on businesses. Regardless of that math, it is clear that companies need to think of new real solutions to address new problems.
"During the pandemic, many people reached the threshold where changing work scenarios became more attractive than stability."
The war for talent has been fierce, and its cost is too high to sit down and limit ourselves to registering our top talent's exit interviews. Numbers on the cost of losing top employees show companies must get their game together to avoid a more significant talent exodus from their ranks. And it is an accepted perverse truth that top talent goes first despite how hurtful that is. Precisely the ones your company invested more to retain will be the shining objects for your competition, and to make things worse, headhunters know that very well when they need to target your organization as a source. The known H.R. tactics to avoid its ranks becoming the prey of many attackers have lost effectiveness rapidly. And it is harder to fight resignations when the motivation is directly related to feeling appreciated and supported to grow.
The good news is that a new crop of solutions combining tech and behavioral sciences is getting ready to be harvested by leading companies with effective People Management. Old approaches will not work well in those cases. In a recent survey of large companies conducted by the Institute for Corporate Productivity in Seattle (I4CP), many admitted they did not have precise data about the skills of their workers, making it impossible to identify true talent. Almost 25% of companies recognized that LinkedIn knew more about their workforce's skills than their own H.R. did. The truth is that companies' leaders need to act now. And as every employee is a particular individual with their own needs, the new H.R. will have to find solutions that can handle every employee individually and simultaneously scale to be cost-effective.
"The good news is that a new crop of solutions combining tech and behavioral sciences is getting ready to be harvested by leading companies with effective People Management."
The trend where companies need to find individual and customized solutions for their employees is not new. For over a decade, companies started to create them, even in the old H.R. Most leading companies offer their executives a menu of benefits from which they can pick and choose. In Technology, companies offer flexibility to make people more productive. For example, B.Y.O.D. (Bring Your Own Device) and B.Y.O.A. (Bring Your Own App) are well-known and implemented I.T. policies. And now that employees are clearly saying that they want to learn new skills and grow to keep being committed to their jobs, finding customized and scalable solutions in L&D (Learning and Development) seems to be the optimal path unless you want to keep growing your payroll. Apart from compensation, L&D will impact the other three big groups of reasons for people to feel unappreciated and resign (63% say Development and Personal Growth, 57% Toxicity, 45% Misalignment with personal goals).
Offering practical personal development opportunities will help your employees acquire new skills and grow. The right solution can help your people managers develop soft skills and reduce toxicity. And finally, you can offer development aligned with everyone's growth plans. Engagement and commitment directly stem from feeling your company is investing in you and feeling valued. Through my optics, I do think the Great Resignation is a byproduct of the many years companies have divested from employees' development. And it is time to empower H.R. to find those scalable solutions addressing every individual. That will show an impact on the overall business results, guaranteed. The effect of having most of your leaders and employees acquire new hard and soft skills at scale will improve every task and process of your company, adding up in no time. In this new era of solutions, H.R. has a real opportunity to show the real R.O.I (Return On Investment) in L&D, a task that was practically impossible before the help of tech.
"The effect of having most of your leaders and employees acquire new hard and soft skills at scale will improve every task and process of your company, adding up in no time."
You can constantly offer a big raise and calm down a more significant exodus of employees. But that will not address the genuine reasons why people are gradually less engaged and committed to the business. You will need real solutions. Solutions that address the very needs of each employee and yet be cost-effective when scaling that up to most employees. It is time to act, and rethinking your L&D is the best starting point as it addresses the two needs you have now - look your employee's eye to eye and address their actual needs and help them focus on generating the results your business needs. That is the single most rational win-win path.