The Great Resignation and What it Means for Business

Many people have had a difficult time in the previous two years. Businesses have suffered due to a global pandemic, persistent inflation, work structure and location reorganisation. As a result, the labour force has faced ongoing shortages, increased worker demand, and employee backlash, forcing businesses to navigate an ever-changing landscape.

The COVID-19 pandemic threw employers and employees into an uncertain future with no end in sight.  HR teams operated in crisis mode for most of 2020 and 2021, setting up processes for employees to work from home to allow the business to continue to function.  As the pandemic continued, their focus shifted to employee wellbeing and providing support on this front; now that many are back working onsite, the focus has again shifted, now to employee retention and attraction.

The Great Resignation was a term first coined in May 2021 and describes the record number of people leaving their jobs since the beginning of the pandemic.  According to the World Economic Forum, this trend shows no sign of abating, and they believe one in five workers will quit their jobs in 2022.  Workers are leaving roles for a number of reasons, including higher salaries, work-life balance, obtaining more fulfilling roles or seeking to work within a business that more closely aligns with their values.

Unfortunately, Victoria has not been spared the upheaval, with record low unemployment rates, seeing businesses face unprecedented challenges around labour shortages.  Employees are resigning, and businesses are finding it challenging to attract new employees.

Almost every business has been affected by the Great Resignation, from retail to hospitality to manufacturing, fruit harvesting, and professional services. The labour shortage has led companies to look at key ways to retain current team members and attract new employees. 

As they strive to retain and attract employees, HR departments and organisations are investing in their employees more than ever.  They are doing this in multiple ways, including:

Many employees enjoyed working from home at the beginning of the pandemic, but as time progressed, the feeling shifted. The novelty wore off.  Some individuals became psychologically exhausted, and resilience and optimism decreased.

As the work from home order continued, many HR teams shifted the focus to employee health and wellbeing, putting in training and strategies to support mental health, resilience, optimism, and motivation.

Many businesses are focusing on creating a culture where employee wellbeing comes first and letting employees know that they care about them and they are more than just a resource.

According to the Australian Bureau of Statistics, the overall number of skills necessary for a single profession is growing at a rate of 6.3% annually.  New skill requirements are replacing current skill requirements.

Investing in upskilling is important to replace outdated skills and equip team members with the tools for success.   Investing in employee skills development has many benefits, including contributing to employee retention, boosting workplace morale, attracting new talent, increased productivity and creating a culture of learning.

Employers are focusing on both the technical and soft skills needed. They are upskilling current employees and promoting from within.

COVID-19 has dramatically changed the way we work.  With long-term stay-at-home orders in place, many employees had no choice but to quickly adjust to working from home. Those stay-at-home orders are no longer in place, but many employees found they enjoyed the benefits such as work-life balance that came with working from home.  Research for SEEK recently found that more than half of their candidates (56%) want a role that offers remote or flexible working.  To retain and attract employees, many companies are offering flexible working options.  Working from home is a growing trend and is expected to be one of the most significant changes in the contemporary workplace in quite some time

To attract and retain employees, companies are looking at their EVP, and the unique rewards and benefits they can offer their staff. 

Along with the expectation of empathy and a healthy human work environment, there is a growing push on businesses to enhance their equity and inclusion. More and more individuals are seeking roles in inclusive, diverse workplaces.  Diversity is all about creating a workforce of employees from different backgrounds. Inclusion is a measure of the culture that empowers the workforce to be successful.

Specifically, there is an increasing demand from all of HR’s stakeholders, internally and externally, to make genuine progress concerning diversifying leadership.

The pandemic has accelerated the adoption of digital technologies. Companies and employees had to quickly adapt and find remote digital solutions to work from home.  This is an ever-altering landscape, and the ability to adapt and work with changing technology, and skill development is now an essential component of every business strategy.

The Great Resignation is not going away.  Businesses will continue to be challenged by workforce shortages.  Approaches that worked in the past are no longer effective.  With hybrid work models and emerging technology, businesses must engage with their employees and provide opportunities for them to grow and feel valued.   Employers need to take meaningful action to retain and attract employees.

If you have any queries regarding the above information, please do not hesitate to contact a specialist member at your local Accru office today.