By now, the Great Resignation may feel like old news, but it is still having a profound impact on the U.S. and global economies. There is a lot of conflicting information on exactly how much the sudden wave of resignations has impacted the larger economy, but there is no doubt that it has forever changed the relationship between employers and employees.
According to the Bureau of Labor Statistics, about 60% of traditionally employed, full-time employees have stayed at their jobs. However, the same agency noted that voluntary attrition increased by approximately 800,000 employees, while involuntary attrition decreased by 400,000. [1] This left many companies with the sense that they had lost their best employees and are continuing to struggle to fill empty positions with quality talent. This has turned what started as the Great Resignation into the Great Attrition.
A Brief Overview of the Great Resignation 2022
The Great Resignation is a continuing phenomenon that began in early 2021, during which millions of workers across the world voluntarily left their jobs in pursuit of better opportunities. The COVID-19 pandemic served as a substantial catalyst, ebbing away at public trust in the economy and even governmental responses to the crisis. Many workers saw a lack of stability in their jobs and a sense that, regardless of their own dedication to the company, they were not valued by their employers.
At first, this led many employees to take up freelance work and short-term jobs. However, a growing number of workers are looking out for full-time positions with better pay, benefits, and company values. This has led to a stand-off between some companies that are unwilling to extend their employee benefits too far and unemployed workers digging their heels in with their demands.
The Great Attrition: What Happens Next?
The Great Resignation and the Great Attrition are largely the same; the difference is simply how we view the same trend. At first, cultural pundits saw the Great Resignation as a good wake-up call to companies that had failed to raise wages for decades and only offered paltry benefits packages. However, as supply chains screeched to a halt and many businesses went under, the phenomenon turned from a social movement into a social dilemma. After all, how can the economy function when companies cannot fill positions or keep employees on the payroll for the long term?
As a small company, Mentoro has been fortunate to avoid many of these impacts. However, no company is completely immune to the Great Resignation because it is so pervasive. This means that our employees — and employees all across the country — increasingly want hybrid work schedules, work-from-home benefits, mental health benefits, and more. While these are not unreasonable requests at the individual level, they can be overwhelming when all or most employees are asking for the same things.
There is no way to predict the future with 100% certainty, but it stands to reason that the tides will eventually turn. The workforce gaps in dozens of industries will start to have too many negative impacts on the overall labor market. There are only so many accommodations a company can make before it eats into its bottom line. So, at some point, there will be a shift back to a more balanced state between employer resources and employee demands, most likely presenting itself differently than before. It’s not so much a matter of “if” but “when.”
Understanding the Complex Labor Market With Mentoro
The pandemic allowed employees to reevaluate how they view work and the role that work plays in their lives. Today they are realizing not that they don’t need a job, but that they need a better job, with better benefits, and a better sense of feeling valued. As time has shown, this can have a negative impact on employers because they don’t have the processes in place to support that. But what are the processes they need to accommodate some or all of these new demands?
Mentoro’s financial mentors have highlighted three key areas in which companies can improve for their current and future employees:
- Work to understand your employee base. What are workers thinking and feeling? Because many are not thinking or feeling the same way they were 5 years ago. We are in the new normal. Therefore, employers have to listen to their employees through surveys, focus groups, or even water cooler talk to learn as much as possible. From there, companies must be willing to use that information to change the profile of their organization or their talent (if necessary).
- Be proactive instead of reactive. Companies that are struggling with the Great Resignation are often those that decided not to address it quickly enough. A pandemic is hard to plan for, but transparency is not. Addressing exhaustion and capacity issues will help avoid burnout and keep employees more content with their current positions.
- Consider the employee experience. There are generally two big reasons people leave a company: either their job interferes with their lifestyle (long hours, low pay, etc.) or they don’t feel valued or part of a bigger purpose within the company. Employers must think about how they can improve the employee experience to reduce voluntary attrition and build a stronger, happier, and more productive workforce. A few common solutions could include mental health days or financial wellness benefits.
If you want to learn more about the Great Resignation and its impact on financial wellness, be sure to contact the experts at Mentoro today!
Sources:
- Bureau of Labor Statistics
