In May this year, American academic Anthony Klotz came up with the term "The Great Resignation" to describe the increasing number of US workers quitting their jobs. Since then, the trend has strengthened, with 4.3 million American workers voluntarily leaving their jobs in August and a further 4.4 million doing so in September.
And research led by AUT Business School professor Jarrod Haar shows "turnover intentions" (aka thoughts of chucking in their job) are on the rise among Kiwi workers as well.
Between May 2020 and April of this year, the proportion of employees surveyed who had no thought of leaving their job dropped from 19.1 per cent to 9.2 per cent, while the proportion with "high turnover intentions" increased from 34.7 per cent to 46.4 per cent.
The desire for a better work-life balance or a bigger pay packet is nothing new. Covid may have changed the way many of us view what we do and how we do it, but it is basic economics, rather than social or emotional factors, that is encouraging people to consider their options.
In its November financial stability report, the Reserve Bank said a tight labour market was "the most limiting factor to business expansion". Border closures have reduced the inflow of skilled migrants to a trickle: workers have more options, employers are having to compete harder for staff.
Our view is that an individual company's experience will depend greatly on the strength of its brand and reputation in the market, and its employee value propositions.
Let's also remember that the "problem" of fighting for staff in a tight labour market is actually a privilege. Covid has devastated many business sectors; being able to look beyond mere survival is a luxury.
Keeping people engaged, providing purpose and certainty, and creating a workplace where people feel that they belong, are all critical to building a genuine and compelling employee value proposition, and a strong collaborative culture in the current environment. Following these five principles can help your organisation combat the great resignation.
Establish common values
A clear and well-articulated set of beliefs and values that mean something to your people is essential. That doesn't mean commissioning a set of generic slogans to stick on the wall; it means defining how your organisation wants to work, and encouraging everyone to take responsibility for their actions and behaviours.
Long periods of working from home have opened up the possibility of working from anywhere. That may include working from overseas when travelling to see family or friends. People are wanting to travel for longer periods to make the MIQ stays worthwhile and want to be able to work while doing this.
Different work habits, such as more people working from home, may need a different style of management: one that prioritises outcomes and is based on trust rather than control. Leaders may need training to support this transition.
Maintain integrity of your processes
Flexibility is good, but some principles and processes are non-negotiable. For example, in the current environment it can be tempting to shorten the recruitment process by holding fewer interviews or by relaxing testing. This risks poor job satisfaction for employees and poor performance for companies, and can drive high early staff turnover.
A shortage of talent has encouraged some organisations to promote people into more senior roles than they might previously have considered. Done without proper care and attention, this can harm employee satisfaction and engagement levels, impede business growth and create significant risk management issues. However, combined with proper training and support, it can create real opportunities for staff development and enhance overall culture.
Make sure you see your staff as a potential talent pool. Is your perception of someone's ability and interests based on an out of date impression? Recognise and reward the talent you have; ensure people don't have to leave the company to realise their potential.
Be part of something bigger
Ensure everybody understands how their work helps to realise the organisation's overall vision and strategy, and feels able to question and innovate. As a leader, I know I don't have all the answers — I need everyone in our organisation to work together to help us achieve our vision.
Milford's employees own a significant proportion of the company, fostering collaboration and common purpose. Employee ownership is not an option for all businesses, but other mechanisms can achieve a similar outcome.
And remember that people also want to work for a company that supports and contributes to society.
- Mark Ryland is the chief executive officer of Milford Asset Management.