Picture this scenario in one of your casual water-cooler chats: "I decided to quit because my manager only recognizes hard work through salary hikes." Just a few years ago, such a rationale might have been dismissed as presumptuous or even greedy. However, the dynamics of the post-pandemic workforce have shifted, with employees now valuing their daily grind for more than just financial compensation.

The phenomenon widely known as The Great Resignation, or alternatively dubbed the Big Quit, Resignation Wave, Turnover Tsunami, or the Great Sabbatical, unfolded in 2021. Anticipated by psychologist and Texas A&M professor Anthony Klotz, this trend was marked by soaring attrition rates, widespread employee dissatisfaction, and a notable increase in job-hopping.

While numerous 2021 narratives delved into the intricacies of The Great Resignation, this article seeks to unravel the collective shift in employee mindset that triggered this phenomenon and provides actionable lessons for companies to navigate and mitigate the impacts of the ongoing resignation wave.

Unpacking the Underlying Factors Contributing to The Great Resignation

Studies consistently identify burnout and stress as primary drivers prompting employees to abandon their positions, notwithstanding escalating inflation rates and pandemic-induced uncertainties. Delving deeper, we explore the catalysts behind burnout and stress during this transformative period.

1. Mental Health Strain

The adverse impact on mental health emerged as a prominent factor in The Great Resignation. The lockdowns during the pandemic exacerbated burnout and stress, as the uncertainty and health concerns drained employees emotionally. Fueled by increased awareness of mental health issues, many individuals opted for more flexible work arrangements, with some venturing into freelancing or contractual roles to prioritize their well-being.

2. Micromanagement in a Remote Landscape

The traditional practice of micromanagement, commonplace in an in-person setting, became a significant issue in the remote work environment. The reliance on employee monitoring tools during the transition to remote work led to a lack of trust. A Gallup survey revealed that a third of respondents would be unhappy if their company started closely monitoring their activities, with 43% indicating a willingness to leave. Employees sought autonomy and gravitated towards roles that fostered high levels of trust.

3. Dissatisfaction Over Pay Equity

Despite company policies discouraging salary discussions among employees, the inevitable exchange of compensation information persisted. The pandemic, with its remote work culture, intensified feelings of isolation, suspicion, and distrust. Coupled with increased job opportunities and higher salary prospects, employees seized the chance to demand fair compensation from their current employers or explore alternative job options.

4. Lack of Recognition

An unfortunate side effect of poor management is a workplace culture devoid of employee recognition. Whether in a remote or in-person setting, acknowledgment serves as a vital element in a positive work environment. A staggering 66% of employees are likely to leave their jobs if they feel underappreciated, a figure even higher among millennials, where eight out of ten individuals would seek new employment if they felt undervalued.

Reviewing the Landscape During The Great Resignation in 2021

To comprehend the key takeaways from The Great Resignation, it is crucial to contextualize the challenges faced by employees during this period.

1. Overworked Remaining Employees

Between April and September 2021, over 24 million American employees left their jobs, leaving many organizations understaffed. The ripple effect meant that those who stayed were often overworked, as exemplified by an HR manager in Singapore who reported working 60 hours a week to compensate for mass attrition in her company. This overwork contributed to burnout and employee dissatisfaction.

2. Escalating Wages in Tightening Labor Markets

As businesses grappled with unfilled job vacancies and a tightening labor market, they faced the challenge of attracting and retaining talent. The talent gap prompted employers to offer substantial salary hikes, improved insurance benefits, and other perks. This trend was observed globally, with salary hikes increasing across various regions.

3. Demand for Mid-Level Employees

Mid-level employees, particularly managers, found themselves in a challenging position. Responsible for managing change, engagement, onboarding, and overall workforce functionality, managers became pivotal during the transition to remote work. However, the perceived risks of hiring new and inexperienced employees increased the value of experienced managers. The resulting demand for experienced employees created a vacuum at the mid-level.

4. Intensified Competition for Remote Jobs

Recognizing the benefits of remote work, employees embraced the idea, with half of workers expressing a preference for jobs offering remote options. While employers had to adapt to remain competitive, the reluctance of some to fully embrace remote work created a bottleneck. Remote job roles became highly competitive, akin to the way outsourcing impacted job competitiveness in the past.

Looking Ahead to 2022 and Beyond

Experts, including Anthony Klotz, anticipate that resignations will continue into 2022, though the surge is not expected to be as severe as in previous years. The tight talent market is predicted to persist, necessitating employers to offer attractive benefits and higher salaries to secure top talent. Bargaining power is likely to remain tilted in favor of employees.

Five Lessons for Employers to Navigate Workforce Dynamics in 2022

While flexible work options, benefits, and salary raises are acknowledged solutions to boost employee retention, additional lessons can help companies counter the resignation wave effectively.

1. Promote Lateral Movement Opportunities

Recognizing burnout as a significant driver, employers should create opportunities for lateral job moves within the company. Studies show that offering employees new roles within the organization reduces the likelihood of resignation by almost 12%. Lateral movement provides fresh challenges and skill acquisition, contributing to increased employee motivation.

2. Emphasize Purpose Over Salary

While salary increases are essential, addressing qualitative issues like burnout and disengagement requires instilling a sense of purpose in employees. Employers must help individuals connect their company's mission and values to their personal goals, emphasizing the broader impact of their work on society.

3. Invest in Manager Training

Managers play a crucial role in employee satisfaction and retention. Investing in comprehensive training for managers, especially in the context of remote work, can alleviate unnecessary stress and contribute to improved employee performance. A well-trained managerial workforce is essential for lowering turnover rates.

4. Foster a High-Attention Culture

Recognition should extend beyond monetary benefits. Implementing systems and processes to increase attention on each employee can yield long-term benefits. Regular check-ins, focusing on goals, priorities, and roadblocks, provide a platform for open communication and contribute to building a positive workplace culture.

5. Implement Succession Planning

Anticipating employee departures during uncertain times, employers should proactively engage in succession planning. Preserving the knowledge and skills of departing employees, particularly top talent, ensures continuity and minimizes disruptions in workflows.

In Conclusion

Anthony Klotz posits that The Great Resignation was a phenomenon long overdue, with the pandemic acting as a catalyst. The key takeaways underscore the rising voice of employees who seek companies with meaningful missions and purposes. To retain talent, employers must empathize with employee needs, accommodate work preferences, address inequities, and offer competitive benefits and salaries. Navigating this complex landscape can be facilitated by global employment solutions such as Remoly, ensuring seamless payroll processing and statutory benefits to keep employees motivated and businesses thriving.