The Great Resignation, the Great Reshuffle, the Big Quit, whatever you want to call it, has dominated headlines for over a year now. When around 4 million people quit their jobs in April 2021 alone, a record high since the Bureau of Labor Statistics began tracking voluntary job loss, it became clear that the recovery from the pandemic would be slow and unpredictable. This has continued to hold true as we approach summer 2022.
Initially, it was only thought to impact the retail, manufacturing, and hospitality sectors; after all, tech boomed during the pandemic with the rise of remote work. However, it’s become clear that even the tech industry isn’t safe, and could potentially be facing even worse post-pandemic consequences than other industries.
But to understand how to fight the Great Resignation, and hopefully avoid other impending obstacles, it’s essential to understand who is quitting, and what factors are influencing this mass exodus.
Hint, hint. It’s not who you think.
During the early stages of the Great Resignation, the charge was led by younger, less-tenured workers in low-paying industries like retail, food service, and health care. But now, the main growth in quit rates is coming from older, more tenured workers in higher-paid industries like finance, tech, and other knowledge worker fields, according to a Visier dataset from companies with over 1,000 employees. An EY survey discovered that the workers most likely to move jobs include managers and leaders in technology or finance roles.
Columbia Business School professor, Adam Galinsky, calls this iteration of the Great Resignation the “great midlife crisis.”
For the largest demographic groups, older millennials and baby boomers, flexibility has become a non-negotiable component of work. Many companies have tried to solve the Great Resignation through wage increases, but these workers are searching for less tangible benefits like meaning and balance because they’re often more financially sound. Quits are being driven by everything from a desire to continue working remotely to a greater search for meaning to simply having the means to do so.
Additionally, this becomes a growing concern with subject matter experts, who are often older, more tenured employees within the technology and finance sectors. This creates an invisible consequence of the Great Resignation: an enormous amount of information is lost when employees leave.
The Pandemic & Flexible Work
Now that the safety precautions from the pandemic have loosened, things are beginning to return to normal. This includes schools being fully opened, mask-mandates lifting, widespread vaccine distribution, and people returning to offices. However, after two years of working successfully from home, many knowledge workers are loath to return to the office due to the numerous benefits of remote work. Data from Slack’s ongoing survey of 10,000 knowledge workers found that with a third of them now back in the office five days a week, their work-related stress and anxiety have reached their highest level since the survey began in 2020.
Knowledge workers have gotten a taste for the potential flexibility available to them; can you blame them for not wanting to backtrack?
For large organizations, in particular, orchestrating a return-to-office has been particularly challenging compared to smaller companies, with 80 percent of smaller companies having fully reopened and only a third of the largest companies. Tech-giants like Apple, Microsoft, and Google have all had to push back their re-open goals due to employee pushback and logistical challenges. According to Worktech, some Apple employees have quit in protest of the 3-days a week hybrid schedule for being too inflexible.
This phenomenon has been one of the most significant contributors to the Great Resignation within the tech sectors. Workers crave flexibility, independence, and balance, all things that working in an office too often fail to provide.
Considerations for Tackling the Great Resignation
The Great Resignation poses a threat to businesses for countless reasons, but by being prepared and thinking outside of the box, leaders can remove the potential costs, both literal and intellectual, when employees leave. If you are currently experiencing an employee exodus, or soon will be, the time to act is now. Losing your top performers is not only costly on a short-term basis, but can set a tone for future generations of talent that staying with your company may not be worth it. The right incentives and investments can support you in retaining your most talented employees and help you attract new ones.
The retention statistics have been demoralizing, however, there are unique opportunities savvy organizations can take from this. Firstly, they can recognize that flexibility is the holy grail for employee retention. And when flexibility isn’t a viable option, they could offer employees career development opportunities to refine and enhance their skill set as an incentive to stay with the company.
This is the age of intellectual flexibility – when employees can leave a company and, rather than seek employment elsewhere, build their own businesses. This movement has grown in popularity over the years and will continue to do so as technology advances. Leaders must be prepared for this change by creating an environment where employees can grow; it is the best way to keep them on board and capitalize on your intellectual investment, rather than lose it to a competitor.
By fostering a flexible work environment that works for all parties, organizations can retain employees and benefit from the knowledge they spend years gaining.
But, is something worse brewing on the horizon?
Despite the Great Resignation, the tech industry has been flourishing and is largely one of the only industries to come out of the pandemic more successful than when they went into it (besides maybe hand sanitizer and mask manufacturers). However, there’s been mounting concerns that the good times are coming to an end. Ugly layoffs may be brewing across the board, some investors and industry watchers warn — from public tech giants to scrappy startups.
Even the seemingly untouchable Jeff Bezos has issued warnings about the shifting market. “Most people dramatically underestimate the remarkableness of this bull run.,” he tweeted on April 30. “Such things are unstoppable … until they aren’t. Markets teach. The lessons can be painful.”
Big tech companies including Meta, Salesforce and Netflix have also recently announced hiring freezes or layoffs in the midst of cost-cutting pressure and rising inflation. Tesla is cutting about 10% of its salaried workers. Online trading app and fintech darling Robinhood, which went public in July 2021 laid off 9% of its workforce in April. Netflix doubled its stock price during the height of the pandemic but has faced a massive 70% drop since November, forcing them to cut entire teams, including its newly created publication Tudum. Celebrity video app Cameo laid off roughly a quarter of its staff. Thrasio, a startup that aggregates hot brands on Amazon and has raised more than $3 billion, let go off roughly a fifth of its workforce recently. And startup-support firm On Deck has laid off 25% of its staff, around 72 people.
It seems that these waves of layoffs are only the beginning, especially considering the reported oversaturation of programmers. While it may be a bit early to start ringing the alarm bells, recognizing the potential issue and preparing appropriately can help businesses avoid catastrophe.
Imagine if your business had an adequate warning about the Great Resignation, what would you have done differently?
That’s the thought process that will keep your business successful, and competitive, regardless of what crisis is waiting around the corner.