The Great Resignation Impact

Great Resignation

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In 2021, the “Great Resignation” happened: tens of thousands of people resigned from their jobs. A mass economic and psychological shift was behind the trend, as businesses tried–and many failed–to coax employees back into offices after a year of remote work due to the pandemic.  

In April 2021, more Americans quit their jobs than at any time in history. Even more left in July 2021, breaking previous numbers. In August and September, job vacancies hit new records. This created an unprecedented time in the American workforce when companies struggled to find, hire, and retain talented employees.

What caused the Great Resignation?

In one study examining why job changers abandoned their old positions and what drew them to their new positions, 40% of employees cited burnout as a top reason for leaving. 

The vast majority of those surveyed said they left their former roles because they felt overworked and undervalued, and they sought new opportunities with companies that valued their employees’ well-being. Employees were so unsatisfied with their working conditions that over a quarter (28%) of all respondents even quit their jobs without finding another before resigning. 

The following are the top reasons why job changers were drawn to a new position during the Great Resignation:

  • Ability to work remotely according to personal preference: 40%
  • Increased compensation: 37%
  • Better management: 31%

Even while resignations in sectors like manufacturing and banking were down marginally, 3.6% more healthcare workers left their employment than the year before, and resignations at technology companies were up by 4.5%.

It appears there was a direct correlation between increased workloads and burnout among employees who worked in industries that saw a significant rise in demand as a result of the pandemic, which likely contributed to greater rates of resignation in those industries.

Our view of work-life balance has been permanently altered due to the pandemic. Now, people are re-evaluating their points of view regarding their emotional and mental needs at work.

91% of employees surveyed said they believe their employers should be concerned about their emotional well-being. In comparison, 85% said that mental health benefits were essential when selecting a new job. On-demand mental health assistance was ranked second only to corporate wellness programs when analyzing the benefits of a new job offer, ahead of financial advising, gym memberships, and complimentary meals. 

And according to Google’s A Year in Search statistics, mental health, healing, and bringing people together were the most popular topics in 2021. This year, there were more searches for “how to maintain mental health” and “how to recover from burnout” than ever before in history.

The bottom line here: Modern companies need to pay attention to this behavioral shift if they want to attract and retain top talent and also think about optimizing their current staff.

Workplace Mental Health in the Public Eye

In recent years, workplace mental health has been a hot topic in the news and across social media. Stories shared there to illustrate that you can be a high-achiever and still struggle with mental health.

One example can be seen with corporate financial executive Matthew Cooper, who hid his anxiety from his team for many years. However, that stopped in August 2020 when he was hospitalized; his condition had become unbearable. 

Cooper opted to step down as CEO, alerting his 90-person team about his road to better mental health. He told his story in an op-ed for Quartz titled, “I’m stepping down as CEO due to my mental health—and I want to talk about it.”

More executives are following suit and speaking up about mental health. For example, Shopify’s Harley Finkelstein uses his Instagram feed to acknowledge the importance of self-care for leaders.

We’re seeing this trend outside the office environment, too: Last year, Olympic athletes Naomi Osaka and Simone Biles deliberately withdrew from championship athletic competitions, sparking a global discussion about mental health.

The message here is that mental health is more important than ever before, and it has a significant impact on professional performance. That means it’s something modern teams need to talk about, plan for, and focus on in 2022 and beyond.

Moving forward in 2022: Retaining talent

So what are companies to do in the face of the Great Resignation? 

Turnover is expensive: Losing an employee costs a company 1.5 to 2 times the employee’s compensation, and that figure goes up the more senior the role. C-suite turnover can cost up to 213% of an employee’s compensation at the highest end. And it’s not just about saving money when it comes to dealing with high turnover; it’s also about helping your organization attain its maximum potential. 

Companies after top talent now need to focus on their employees and potential hires with extra care. That may mean investing more in physical and mental health initiatives, creating more flexible remote work policies, and in general, creating a feedback loop where employees get a voice within the larger workplace culture.

Data backs this up: A new study by Glint has found that employees who feel cared for at work are 3.2 times more likely to be satisfied with their present employer and 3.7 times more likely to suggest their employer to a friend.

So far, it seems that companies are taking action: According to Wellable Labs’ 2022 Employee Wellness Industry Trends Report, 90% of employers have increased their investment in mental health programs.

Investing in policies that benefit families, businesses, and economies is a win-win situation for everyone involved. More flexibility, gender equality, and long-term developmental initiatives are linked to higher employee productivity and the ability to recruit, motivate, and retain top talent.

Foster positive working relationships

Engaged workers are more productive and feel more empowered at work.

 The question is: How do you foster positive working relationships and a workplace culture where employees are highly engaged?

1. One-to-one conversations

Regular one-on-ones with managers can provide valuable information about how employees feel about their work environment. Use one-on-one meetings (virtual or in-person) to understand how satisfied and engaged employees are with their work environments and to gather honest feedback. 

Some of the top qualities employees seek in a CEO or leader are soft skills, such as integrity, listening skills, being able to motivate others, empathy, and trustworthiness. One-to-ones are a great environment in which leaders can showcase those qualities.

2. Virtual activities

Virtual events can be great team-building exercises for distributed teams working remotely. They bring everyone together in a non-work setting to simply interact and have a good time. 

At MESA, we’ve experimented with Virtual Wine Tastings, Virtual Work Yoga, and Virtual Ramen Making, all of which provided an opportunity for team members to chat and work together while learning and interacting with each other.

Re-evaluate mental health policies

Re-evaluating your mental health policies and programs can help employees feel more empowered to take better care of themselves (and feel cared for at the same time.)

Mental health is the result of a complex interplay between our biology, psychology, social environment, and other factors. The effects of overwork and burnout are directly linked to employees’ overall mental health, which is why they need to be addressed at work.

Share a wide range of mental health-enhancing resources, methods, and practices. Activities like yoga and meditation may be a part of this, as well as stress reduction programs and incentivized exercise programs.

A few excellent resources to consider:

Workplace Mental Health in 2022 and the Great Resignation

Looking forward, companies will need to focus on recruiting high-quality hires who are retained through engaging, culture-focused efforts long-term. Employers and businesses need to rethink how their workforce is treated (and it’s not always just about money.) Maintaining a healthy work-life balance, flexible scheduling, and remote work options can go a long way toward retaining talented employees.

The bottom line: Consider your employees’ well-being as an investment and work hard to prevent burnout through proactive measures. 

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