What is ‘The Great Resignation’ - and could it affect your business?

Posted on: 2nd September 2021

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People’s priorities have shifted in the wake of the pandemic, with record numbers quitting their jobs. Concerned you might lose your best talent to the trend? Here’s how to hold on to them.

If ‘The Great Resignation’ sounds too dramatic to take seriously, hold on to your hat. While the term might seem overblown, Microsoft’s Work Trend Index survey of more than 31,000 workers around the world confirms 41% of people – almost half the global workforce – are considering quitting their jobs in 2021.

In the USA alone, April saw more than four million people leave their posts, according to a summary from the US Bureau of Labor Statistics – the biggest spike in resignations on record. Meanwhile, HR software company Personio’s study shows that 38% of people surveyed in the UK and Ireland intend to quit their jobs within the next six to 12 months.

All in all, it’s no wonder that Anthony Klotz, Professor of Management at Texas A&M University, coined the phrase ‘The Great Resignation’ – also known as ‘The Great Quit’. According to Klotz, the trend is one of the main repercussions of the Covid-19 pandemic on the world of work. But why is it happening, and how worried should business leaders be?

What’s going on?

While it’s arguably unsurprising that a global pandemic has forced some people to re-think their priorities, the scale of The Great Resignation is beyond what many experts might have imagined.

While some quitters are doing so in order to pursue lifelong dreams, establish different careers or spend more time with family, others are leaving more or less as a result of how their employers handled the pandemic.

Workers who felt ambivalent about their jobs before the crisis may have been pushed to ‘quitting point’ by poor Covid-19 policy, according to a recent study by Stanford University. The paper explains that businesses with ‘toxic’ environments tended to double down on decisions that made workers feel unsupported during Covid-19, with many making staff redundant.

As the crisis has receded even employees who weren’t laid off have chosen to move on from such firms, which they now view as disinterested in the welfare of workers - not least because, in some cases, employees that were neither furloughed nor let go were expected to take on extra tasks, despite the risk of burnout. In short: companies that failed to acknowledge or try to alleviate the concerns of their workers at the height of the pandemic are now suffering the consequences.

According to the Personio study, more than half of the respondents who were planning to quit wanted to do so because they were seeking improved work-life balance, were tired of an unhealthy working culture or felt they’d suffered a reduction in benefits.

Ross Seychell, Chief People Officer at Personio told the BBC: “The pandemic put an acute focus on, how has this company... I’ve given a lot to handled me, or my health, or my happiness during this time?” Where the answers are not positive, Seychell says, “I’m hearing it a lot: ‘I’m going to go somewhere I’m valued.’”

The push to return to the office

Now, as the pandemic recedes and restrictions in some areas are being lifted, a key concern for employees is whether they’re being put under pressure to head back to the office full-time - particularly if they’ve managed to work effectively from home.

Dr LaNail R Plummer, CEO of Onyx Therapy Group, told Forbes magazine: “During this pandemic, we realised that many people can be extremely productive outside an office building and be more happy, too. Forcing people to go back to the office communicates to employees that their company doesn’t value what the best work environment may be for [them].”

Dr Plummer argues that pushing employees to work in ways that aren’t good for their wellbeing – and which are difficult to justify in terms of productivity – is likely to lead to resignations. “Some [people] are experiencing sadness about missing out on dinner with their families or the freedom to take a walk in the middle of the day,” she explains. “There may be frustration about having to be in the same space with colleagues who don’t value them, or having to return to commutes that are mentally and physically taxing.”

Hybrid has the answer

According to Microsoft, 73% of workers want flexible remote work options to remain in place, post-pandemic – and smart business leaders are already embracing a hybrid approach to work. This allows employees to split their time between the corporate HQ, home and a local flexible workspace.

The hybrid model offers benefits for employees, employers and the environment alike. Workers are free to base themselves at home, or at a flexspace closer to home so that they can lock in the work-life balance benefits they found during periods of lockdown. The reduction in commuting cuts companies’ carbon footprints and supports environmental goals, while empowering people to choose where they work maintains – and can even improve – productivity.

Firms who adopt the hybrid model can also bolster their bottom lines by reducing their spending on real-estate. Big companies including BP, JP Morgan Chase and Lloyds Banking Group have all stated their intent to shrink office space in the wake of the pandemic.

Looking to the future

For businesses looking to thrive in 2022 and beyond, the right approach to recruiting and retaining employees is vital. According to Accenture, 63% of organisations with high-growth characteristics have enabled ‘productivity anywhere’ workforce models, such as hybrid. On the other hand, 69% of negative or no-growth companies are still focused on where people are going to physically work.

Arguably, The Great Resignation is proof that employees’ mindsets are shifting – and perhaps we shouldn’t be shocked if, in the aftermath of Covid-19, people want to work to live rather than live to work.

As the world moves forward, it’s going to be more important than ever for companies to focus on the health and happiness of their people. In many cases, that’s going to mean adoption of hybrid working for the long-term - for employees and employers alike, the provision of access to high-quality, convenient flexible workspace such as a local Regus could make all the difference.

With locations in thousands of neighbourhoods all over the world, find out how Regus can help your business thrive in the new, hybrid world of work

Topics in this article

  • Work Trends


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