The Great Resignation – Why businesses should act before it is too late
Glen Johnson, Partner at Odgers Interim US, reflects on the current wave of resignations across the US and internationally and talks about the underlying symptoms and potential remedies to stop businesses from losing their top talent
As we are emerging from the depth of the global Covid-19 pandemic into a post-pandemic economy, our work landscape is undoubtedly changing. According to recent employment figures, nearly 4 million Americans resigned from their jobs in April of this year alone. And this wave of mass resignations is happening across all sectors and across all corporate hierarchies, from seasoned executives to early career professionals to the frontline workforce leaving their employment for a variety of reasons. Thus, the question begs, what is causing this ‘Great Resignation’, as economists have dubbed it, and what can employers do to retain the talent they invested in and rely on for their day-to-day operations?
Times are changing
While many companies relied on their workforce performing their roles under difficult circumstances from home during the pandemic, leadership approaches in the wake of the ‘return to normal’ differ greatly. The CEO of JP Morgan Chase recently stated that he thinks his employees work best and perform only from an office, while the Citi Group has openly embraced the WFH approach.
And while a majority of businesses aim to adopt a more flexible working policy moving forward, for many employees this is simply not enough anymore. In the past 18 months, during a time where most of us suddenly worked from home, spent more time with families, and less time commuting, travelling, or juggling an overly full social calendar, many of us reconsidered our lives. Whether we realized that we spent way too much time commuting or working in an environment that no longer fulfills us – for a lot of employees worldwide (because this is not a phenomenon unique to the US context) the pandemic accelerated the realization that something has to change.
At the same time, we learned that in most instances we can perform our work from the comfort of our home. A vast global workforce has kept businesses and the economy afloat throughout a global pandemic from their stuffy bedrooms, cramped studies, cluttered kitchen tables, whilst simultaneously homeschooling, babysitting and - more often than not - worrying about the impact of the Covid-19 crisis.
On the flipside, businesses have come up with creative and innovative ways to support workforces throughout the challenging times, mental health has become a front topic of open and honest conversations, and executive leadership has become more approachable as a direct effect of seeing your CEO in their home office. No one wants to lose these positive side-effects of the last 18 months.
Value needs to be valued
With the vaccines working their magic to allow for a slow and gradual return to life as we used to know it, there seems to be a growing consensus that we do not want everything to go back to exactly how it used to be. We have learned to appreciate the comfort of home office, the spare time we have at our disposal when we are not stuck in traffic on the way to and from work, and many are concerned what the return to work will look like.
And these realizations seem to have come across all levels across the corporate hierarchy. Many senior executives have quit their jobs due to executive fatigue or have taken early retirement, while others have resigned to step into interim management positions, which grants them more flexibility and variety in their line of work.
And it is at this very point, that executive leadership need to react and fend off a wave of resignations before it is too late. We have spoken to some of our interim executives to get their advice on what businesses can do to avoid losing talent, these were some of their suggestions:
- Value, where value is due: Employees have shown great agility, loyalty, and grit to work from home, support colleagues and teams throughout unprecedented times, and keep their businesses afloat during a global pandemic. Leadership must recognize this dedication and return the loyalty by showing employees that their sacrifices and efforts are valued. This may be through an additional day off, a company day-out, a paid bonus, or a salary increase. Employees will add value, where they feel valued.
- Flexibility: Employees have changed their lives dramatically to ensure they can work from home effectively. At the same time, they have appreciated more time with family, less time commuting, and being generally more flexible. Leadership should acknowledge this shift and not only allow for a gradual return to the office, but wherever possible, implement a flexible working policy that grants a hybrid model of working, where employees can work from home as well as in the office when required.
- Support and development: A lot of employees have shown great adaptability, initiative, and entrepreneurial spirit to accommodate the changes in their work lives. And while there has been an understandable delay on promotions, hiring, and career development, leadership should resume developing their staff’s abilities, support their career progression, and ensure that they have the time, equipment and support they need to best perform their tasks. This should include ensuring that teams are not understaffed, and employees are not continually working overtime to make up for business shortfalls or team shortages.
One cannot keep travelers from travelling
As much as businesses should want to and try to hold on to their talented employees, there is an old German proverb which states that “one cannot keep travelers from travelling” (orig. “Reisende soll man nicht aufhalten.”). During the pandemic, we observed that employees were hesitant to make a job change. This may have been caused by the small hiring market, but it could also be due to them wanting to stay to keep from disrupting their benefits to taking a risk during such tumultuous times. Now there is a pent-up desire to change – change that would have happened a year ago is now added to natural changes occurring this year, which is likely to result in a significant wave of resignations. If employees want to leave, and no incentive will entice them to stay, businesses will need to let people go. However, every coin has two sides.
For businesses and leadership this also presents the chance to reinvent, restructure, and reorganize existing teams and operations within their businesses. A lot of lessons have been learned throughout the pandemic in terms of leadership, streamlining and business transformations, and businesses can capitalize on these revelations by hiring fresh talent that will not only fill existing gaps, but also bring a new set of eyes to the company and help drive forward new initiatives, innovation, and implementations.
A great solution in the face of a ‘Great Resignation’ is the recruitment of an interim executive. Interims are adept to not only step in at a very short notice, but they are used to operating in difficult and chaotic situations. They manage teams with complex needs and circumstances, and bring an unbiased, fresh perspective to existing structures, that allows them to streamline processes and optimize businesses from within.
‘The Great Resignation’ does not need to be feared by businesses – it can be embraced as a long overdue shift towards better operations, faster execution, a satisfied workforce, and a workplace culture that allows those to grow who chose to be there.
If you or your company are affected by the “Great Resignation” and you would like to discuss this article, or you would like to have a confidential conversation about interim executive solutions, please contact Glen Johnson.