How can the Great Resignation benefit your business?
by Natalie Grogan, CEO of The Outstanding Company
The Great Resignation of 2021! Is it real or sensationalized?
I don’t necessarily believe the hype about it but I do believe substantially more people than usual will continue to move on to what they perceive are greener pastures.
When there is uncertainty, people stay put. Now that things are somewhat back to normal, those who were considering a move pre-pandemic feel more comfortable moving forward with it. It just happens to be occurring all at once. There are, of course, some pandemic-related reasons that people want to leave companies, too.
Numbers + Reasons
2.7% of people quit their jobs in April 2021 – that’s a huge number. The numbers vary by source, but CNBC says that 24% of U.S. workers say they want to leave their job this year. 80% cite concerns about career advancement. 72% say they have reconsidered their skill set since the pandemic and many took the opportunity to learn new skills in some way since last year. Many of them are also looking for more flexibility. A major note on that, though: it’s much easier to answer a survey question about wanting to leave your job than it is for most people to have the guts and comfort with risk to quit and the wherewithal to endure searching for another role. I have a feeling the actual number will be lower.
Related or Unrelated Retention Issues
Here’s the thing – you may lose some employees and you’ll want to replace them quickly. This happens all the time, right? Right now, people will likely have a lot of options. Lots of job inventory, lots of candidate inventory. It’s going to be a competitive market.
Don’t settle for warm bodies.
Absolutely DO NOT replace people just to get a butt in a seat. You’ll regret it within 6 months.
Hiring the wrong person will cost you at minimum 30% of their annual salary when they quit. This is often overlooked and that’s the most modest number for an entry-level employee. If you’re hiring directors or executives, the number is 100%-200% times their annual salary.
Demands are Different Now
Regardless of your experience with the Great Resignation, the mindset about what employers should do for their people has shifted. That is not to say you should pander to demands that have no impact on wellbeing, satisfaction, and performance. In fact, pandering to demands usually makes the problem worse and demands greater. People who feel entitled to make these kinds of demands are also more likely to be those who pursue litigation. Yet another reason to carefully vet through the hiring process.
Before You Hire More People...
Here’s what you need to do:
- Assess existing talent: Who might be able to step up and fill the empty roles? Where can you rearrange and/or up-skill existing employees?
- Examine team dynamics: Do you know everyone’s strengths? Blind spots? What about the team’s strengths as a whole? You want to hire the person who is going to complement your existing team and bring new strengths to the table.
- Establish your new working environment: How is your organization working moving forward? Remote? Hybrid? In-office? You can’t bring in new people until you’ve decided, identified push-back and other challenges, and created a plan to fix that. If you bring new people on with the promise of hybrid or remote work and then decide you need to go back to the office, they will leave.
- Invest in your people: You will need to differentiate. Why do people want to work for you, other than a paycheck? Money is not even in the top 10 on the list of candidate priorities. You need to communicate how you’re planning to invest in your current employees before you can sell it to candidates. Do you know what your people want and need to be satisfied and productive?
- Re-evaluate company policies and communicate them often: Workplace litigation has been up substantially in 2020 and 2021. Many employees are taking advantage of changing environments and priorities for financial gain. Unacceptable behavior must be documented in policies, communicated to all employees and enforced by all people managers. Do not bring on new employees without this already established.
My Best Advice: Hire Slow + Use Objective Data
I know that’s not ideal but you’re asking for a plethora of problems if you make hasty decisions. Get to know the person. See how they fit with the team. Find out what motivates them, what they’re naturally good at, and whether that’s important to your organization, team, and the manager’s goals. How do they like to work? What kind of opportunities are they looking for? If you can’t provide these things, say no. Warm bodies are not better than nothing!
Use objective data.
If you’re not performing a job analysis prior to hiring, you’re putting your business at risk. If you’re not looking at candidate behavior profiles in relation to the job analysis, you’re putting your business at risk. If a new hire doesn’t work out, you need to be able to explain why, in the context of being able to perform the job they were hired to do. Litigation is rampant right now and judges only care about the perception of “fairness”, not reality. A documented job analysis, objective hiring measures, and signed agreement from all parties will help cover your tail in case of litigation. I am not a lawyer so this is not legal advice but is well-documented in the I-O psychology realm.
Don't Know Where to Start?
If you need help with this, we have straightforward, repeatable, teachable processes to address every aspect with leadership, managers, teams, and even your entire workforce. You have an opportunity to re-establish your priorities, develop better teams, and improve performance if you take this opportunity to do this correctly.
I am Natalie Grogan, CEO of The Outstanding Company, I-O psychology Master’s candidate, and Talent Optimization expert. Here is my personal calendar link if you’d like to get in touch!
If you don’t want to talk but you have some questions or concerns, feel free to drop me a line at [email protected].
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