The Great Resignation? Retaining Talent in a Job-Hopping World
August 25, 2021
As several countries begin to open up from COVID-19-related lockdowns and companies look to navigate a return to the workplace, many business leaders are facing an additional challenge: Workers are quitting in record numbers.
A recent Microsoft survey found that 41 percent of workers around the world are thinking about quitting their jobs.
There are a variety of reasons. Working remotely has shown many employees — and employers — that there is a broader range of job opportunities out there. Some workers, facing requirements that they return to the workplace, are simply opting out. Others — primarily women — were forced to leave in order to care for family. And there are some who are burned out and deciding to step away.
The ability to work remotely for talent-hungry employers in other cities has made job-hopping easier than ever. Meanwhile, employers are worried about losing their essential talent.
“We’re seeing a very interesting dynamic emerge between what employers are thinking and what talent in the workplace, particularly younger generations, considers important,” says Mina Morris, partner at Aon’s Human Capital Solutions. “A lot of folks are leaving jobs right now, and many others are evaluating what they want from their jobs and careers.”
Whether they’re looking at a full return to the workplace, embracing a hybrid strategy or allowing permanent remote working, employers need to develop strategies focused on attracting and retaining the talent that’s critical to achieving business objectives.
In April 2021, the U.S. saw the start of the “Great Resignation” as a record four million workers quit their jobs, according to the Department of Labor. At the same time, the department reported a record 9.3 million job openings in the U.S.
While workers are typically reluctant to leave jobs during downturns, historically that changes quickly as conditions improve.
“The moment the fog lifts and things free up again, turnover goes up and tenure goes down,” says Stefan Gaertner, who serves as partner at Aon’s Human Capital Solutions and studies employee turnover. “So, part of what we’re seeing right now you could think of as pent-up demand for a new job, because people were not really changing jobs last year.”
In addition, demand for workers in certain areas such as technology has increased, creating more opportunities for job-hopping.
“There was always a need for technology roles across industries, but now everything is being virtualized and digitalized. The COVID-19 pandemic accelerated a trend that was already in motion,” says Gaertner. “So, as a result, tech talent is in high demand across industries.”
Finally, many workers based in more expensive geographies are finding the current market provides an opportunity to move to lower-cost locations.
Let Data Drive Retention Strategies
To improve employee retention, employers should start by looking at data to determine what factors are driving turnover and retention, says Gaertner.
“Your own data and market data will tell you why your people are quitting and what about your situation might be unique,” Gaertner says. “Then you can identify opportunities to retain the people that fit your culture.”
Some organizations might be inclined to look at pay for improving retention, but while compelling total rewards are an important factor, a focus on pay alone isn’t an effective solution in the long run, according to Gaertner.
Why not? Gaertner says while pay might bring workers into the company, it rarely works in keeping them. “If you have top talent, there’s always somebody who’s going to pay more,” Gaertner says.
Employee perception is also key here. “We have worked with clients whose employees don’t feel their employer’s rewards are competitive with the market — but then we do a benchmarking analysis that finds they actually are,” says David Kompare, senior partner, employee rewards, at Aon. “It’s important to know what your employees think about how competitive your rewards are, because employees are making decisions based on their perception of what they are receiving,” Kompare adds.
When employee perceptions don’t support the true competitive value of the rewards being offered, Kompare says it may be a signal that not enough is being done to communicate the value of rewards provided.
Culture as a Retention Tool
Instead of relying on wages to promote retention, a better solution is understanding the organization’s culture and bringing in employees that fit that culture.
“Give employees a long-term proposition. Knowing their company will develop them, feeling this is the culture where they belong — that keeps employees around. Even after five, six, seven years,” says Gaertner.
The role of the organization’s leadership and their efforts to support workers is also critical to retaining talent in the current climate, according to Morris.
The human element of leadership is essential. Leaders must be authentic, consider how decisions might affect team members’ feelings and emphasize a sense of community.
Leadership also has to consider the value proposition the organization offers its employees.
“As employers are thinking about attracting and retaining talent, a big part of it is the value you offer your employees. What sets your company apart?” says Morris.
The Pandemic as a Chance to Reset
Organizations also need to consider the impact the pandemic has had on jobs and how they’re designed.
“The pandemic showed us we can work remotely,” says Morris. “Organizations really have to optimize the way they think about jobs, the way jobs will be conducted, where jobs are being done. That’s going to be table stakes moving forward.”
For employers, the possibility of remote work can provide a benefit by removing geographical limits on pools of potential employees, allowing many businesses to increase diversity by hiring across geographies and backgrounds.
The pandemic has accelerated the use of technology, which has been a driver in forcing some jobs to be deemed more strategic, and others to “sunset”, according to Morris.
“The next element of this is thinking about how you enable your workforce to be ready for the future by giving them the necessary skills, opportunities and education, and reskilling and upskilling them to help them prepare for roles that are more appropriate for the organization moving forward,” Morris says.
Retaining Talent in a Changed World
Changes to workplaces and businesses accelerated by the pandemic have made it easier for many workers to change companies. In a competitive labor market, finding ways to retain top talent is a must for businesses.
Organizations that understand why their workers stay or leave and develop strategies for retaining talent will be those best positioned for success in this job-hopping world.