Tried and tested strategies that can help retain critical talent in the event of a employee resignation deluge
The storm hasn’t quite passed over yet. There is still yet another turbulence awaiting organizations on the horizon; It is because the balance of power has shifted in the corporate collective. The wasted time spent in long-office commutes, ensuing politics and the need for a better work-life balance are factors that have been driving the great resignation in the west.
The key question is whether the ‘Great Resignation’ phenomenon, initially witnessed in the United States and subsequently Europe, is spreading to India and other nations in Asia, influencing comparable behaviour (early traces are already obvious)? Irrespective of the conclusion, it is clear that most economies are now seeing far greater rates of employee departure than what was observed previously. To state that this trend is worrying for employers is an understatement.
The need of the hour is for employers to delve into the psyche of employees and understand their pain points. According to a recent Microsoft Trends survey, 41% of the worldwide workforce intends to leave their occupations by 2021. The same study found that 59 percent of respondents are not of the same mind as the more optimistic ones. To me, it makes me ponder over the fact that those employers must be doing something right and the employees have some reasons to stick to their current organisation. Based on insights from Harvard Business Review, let’s take a closer look at the key trends in the west that could also drive the great resignation in Asia and some strategies to retain talent.
Mid-career employees have the highest resignation rates
Between 2020 and 2021, employees between the ages of 30 and 45 had the biggest increase in resignation rates, with an average increase of more than 20%. While younger employees are more likely to leave, research by Harvard Business Review indicates that resignations among workers in the 20 to 25 age bracket actually fell over the previous year (likely due to a combination of their greater financial uncertainty and reduced demand for entry-level workers). Employees in the 60 to 70 age group likewise resigned at lower rates than in 2020, while those in the 25 to 30 and 45+ age groups resigned at somewhat greater rates than in 2020. (but not as significant an increase as that of the 30-45 group).
There are a few reasons that may explain why these mid-level employees have accounted for the majority of the resignations. To begin with, it’s probable that the change to remote work has made companies believe that hiring someone with less experience is riskier than normal, because new workers won’t receive in-person training and coaching. This would increase demand for mid-career employees, providing them more bargaining power when looking for new jobs. Another factor is that many of these mid-level employees have delayed their career transition owing to the uncertainty caused by the pandemic. The biggest reason is perhaps the need for a far better work-life balance.
Presently, employers are looking for talent that strikes the right balance between skill and reasonable wages. Employees that already have an established track record and are willing to work in a capacity that emphasizes on cross-functional skill development would be preferred.
Healthcare and tech sectors most affected
Harvard Business Review points out the significant disparities in turnover rates among organisations in various industries. While resignations in certain areas, such as manufacturing and banking, have declined marginally, 3.6 percent more healthcare workers have left their employment than the previous year, and resignations in technology have grown by 4.5 percent. Employees who worked in sectors that had witnessed dramatic increases in demand as a result of the pandemic had higher resignation rates, which likely led to greater workloads and burnout.
These patterns emphasize the significance of using data to determine not just how many employees are departing, but who has the biggest turnover risk, why individuals are quitting, and what can be done to avoid it. Every organization’s specifics may vary, but there are three actions that can assist any business better harness data to boost employee retention:
Analyse the impact: It’s vital to evaluate both the breadth of the problem and its effect before you can figure out what’s impacting one’s company’s turnover. One can choose to deploy the following formula to get the retention rate:
Turnover Rate = Number of Separations per Year ÷ Average Total Number of Employees
Similar formulae may be used to determine how much of a company’s turnover is due to voluntary resignations versus layoffs or firings. This will assist an organization in gaining visibility into the source of their retention woes.
Root cause analysis: The next step is of course to understand the root cause. After step 1, it’s time to conduct a deep data analysis to establish what’s truly driving your employees to quit once employers have determined the severity of your retention problem. Consider what circumstances may be causing increasing resignation rates. Metrics like remuneration, duration between promotions, pay raise size, tenure, performance, and training opportunities may all help employers uncover trends and blind spots in your company. To better understand how work experiences and retention rates change across different employee groups, employees can be divided into categories such as geography, function, and other demographics.
Develop customized retention programs: Based on the idiosyncrasies of an organization and its employees, a tailored retention program can be developed. Organizations may start creating highly personalised programmes geared at resolving the exact difficulties that their business deals with, once the fundamental reasons of a lower than expected turnover are uncovered. For instance, if an organization notices that women are departing your company at a higher rate than their male counterparts, a DEI-focused strategy may be necessary. If an organization notices a strong link between time between promotions and high resignation rates, it may be time to reconsider your progression practises.
There is little doubt today that flexible work policies have become the need of the hour. Is there a way for employers and employees to find a middle-ground to how work is being approached without impacting productivity? Undoubtedly, hybrid work models are here to stay. As workplaces get reimagined, employers must espouse a more humane and empathetic approach to navigate organizational exigencies better.