A record-breaking 4.3 million Americans quit their jobs in August 2021, according to a report released by Bureau of Labour Statistics (BLS). That’s the highest level since 2000, and sixth consecutive month of high resignation rates.
Employees between 30 and 45 years old have had the greatest increase in resignation rates, with an average increase of more than 20% between 2020 and 2021. While turnover is typically highest among younger employees, resignations actually decreased for workers in the 20 to 25 age range (likely due to a combination of their greater financial uncertainty and reduced demand for entry-level workers). Interestingly, resignation rates also fell for those in the 60 to 70 age group, while employees in the 25 to 30 and 45+ age groups experienced slightly higher resignation rates than in 2020 (but not as significant an increase as that of the 30-45 group).
Source: https://nypost.com
There’s no single factor driving workforce behavior, economists add. Wages aren’t keeping up with surging prices. Low-wage jobs often lack opportunities for career growth. A crumbling childcare industry is driving up day care costs, making work unaffordable. Those who have remained in jobs face higher responsibility and gruelling work conditions punctuated by fears of the next variant of COVID-19. And then there’s just plain old vanilla pandemic fatigue.
Data from big employers across U.S. suggest that vaccine mandates aren’t playing much of a role. Roughly 99% of Michigan’s Henry Ford Health System’s 33,000 employees complied with its vaccine mandate. In Washington State, University of Washington hospitals reported 97% of staff were vaccinated by the end of September. More than 90% of Tyson Foods’ 120,000-person workforce were vaccinated in the same time frame.
Anthony Klotz, an associate professor of management at Texas A&M who coined the term the “Great Resignation” to describe this budding labour market says the trends may have a silver lining. They may force companies not only to raise wages and increase benefits, but also to offer more flexibility to attract and retain an in-person workforce.
That’s especially the case for people working in the food service and retail industries. In August, some 892,000 workers quit accommodation and food services jobs and 721,000 quit retail positions, according to BLS data. The healthcare sector also took a hit: 534,000 U.S. workers resigned or quit from health care and social assistance positions.
When a current employer is unable or unwilling to make a job more attractive, numbers on job openings suggest that burned out workers in many sectors can easily find new ones. But there are three steps that can help any employer more effectively leverage data to improve employee retention:
1. Quantify the problem.
It is critical to quantify both the scope of the problem and its impact.
Next, determine the impact of resignations on key business metrics. When employees leave an organization, remaining teams often find themselves without key skill-sets or resources, negatively impacting quality of work and time-to-completion to bottom-line revenue. It’s important to track how increased turnover correlates with changes in other relevant metrics in order to get a full picture of the costs of resignations.
2. Identify the root causes.
Then it’s time to conduct a detailed data analysis to determine what’s really causing your staff to leave. Ask which factors could be driving higher resignation rates? Exploring metrics such as compensation, time between promotions, size of pay increases, tenure, performance, and training opportunities can help to identify trends and blind spots.
3. Develop tailored retention programs
Create highly customized programs aimed at correcting the specific issues that the workplace struggles with most. For example, if you find that time between promotions correlates strongly with high resignation rates, it may be time to rethink advancement policies
It is now an employees’ market in the U.S. And it may also happen here in Malaysia, unless employers start to tailor needs of employees, be flexible on work hours, and set compensation that meets new post-pandemic standards, we may have trouble filling openings. But that could be a scene of the future in Malaysia!
References:
Why literally millions of Americans are quitting their jobs, Abby Vesoulis, October 13, 2021 (https://time.com)
Who is driving the great resignation? Ian Cook, September 15, 2021 (https://hbr.org)
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