Throughout the course of 2021, employees have been leaving their organisations in record numbers. During the months of July, August and September, more than four million American workers left their jobs each month according to the US Bureau of Labor Statistics, a trend which has been showing few signs of slowing down.
However, the US is not alone in facing up to what many are dubbing The Great Resignation. In the UK, for example, a recent study by recruitment firm Randstad found that seven in ten workers are ready to move jobs within the next couple of months.
In order to address these issues effectively, it pays to generate a more in-depth understanding of the root causes. This is what prompted my team at Visier to conduct an analysis of more than nine million employee records from over 4,000 organisations around the world.
We covered a variety of job functions, experience levels and industries, with the study revealing some telling trends.
Tech, healthcare and mid-career – key resignation trends
There were some stark differences in turnover rates across different industries. Our research showed a high variation in the rate of increases across different industries in 2021, with retail seeing the largest increases and manufacturing seeing a substantially slower rate of increase.
However, the most revealing findings came from healthcare and technology industries, which respectively saw 3.6 percent and 4.5 percent more employees quit their jobs than in the previous year. This tallies with the Randstad survey which listed tech workers as among the most confident of immediately moving to a new job.
4.5% more employees quit their jobs in the technology industry than in the previous year
Several factors can explain these findings. The most obvious is burnout from increased workloads caused by the extraordinary circumstances created by the pandemic. Healthcare services have been severely stretched around the world while dramatic shifts to remote-based working and online purchasing have created huge demand for digital services.
Furthermore, the experiences of COVID-19 have changed how some people think about life, work and what they want out of both – coupled with the fact that very few people moved jobs during the peak of the pandemic, and we are seeing something of a perfect storm.
This is compounded by the fact employers are not responding appropriately. A study conducted in the US found that 72 percent of tech workers are considering leaving their roles in the next 12 months, with key reasons being a lack of flexible working conditions, feelings of underappreciation and toxic working environments.
Coming back to our research, the second key trend we uncovered centred around the stages in people’s careers. Those at the beginning of their career were most likely to move – our analysis found that employees aged between 20 and 25 had the greatest increase in resignation rates between 2020 and 2021 (up 47 percent). More surprisingly, the rate of increase for employees aged 30-35, 40-45 and 45-50, which are typically more stable and slow to change, also increased at a significant rate (over 38 percent).
72% of tech workers are considering leaving their roles in the next 12 months
So, why are resignations being driven by employees in the middle stages of their careers?
We can revert back to the observation around entry level workers here. It is possible that the shift to remote work has led employers to feel that hiring people with little experience would be riskier than usual, since new employees won’t have the benefit of in-person training and guidance. As a result, greater demand for mid-career employees exists.
As alluded to earlier, the pandemic may also have delayed plans which mid-level employees had to transition out of their roles. Added to that, many of these workers might have simply reached a breaking point after months and months of high workloads, hiring freezes and other pressures, causing them to rethink their work and life goals.
A data-driven approach to retention – three steps organisations should take
As well as using data to understand the dynamics of The Great Resignation, data-driven methods also hold the key to engineering an effective response. Indeed, by diving deep into the information available, we can determine not just how many people are quitting, but who exactly has the highest turnover risk, why they are leaving, and what can be done to prevent it.
Of course, each organisation will have its own nuances. However, there are some broadly applicable steps that any employer can take to improve their employee retention in these uncertain times.
Here we outline three:
1. Understand the problem
Quantifying the scope and impact of the retention problem is a precursor to determining the underlying cause or causes. Organisations can calculate their turnover rate by dividing the number of separations per year by the average total number of employees, with similar formulas enabling the identification of the types of departures and how these feed into the overall picture (e.g. voluntary resignations, firings, layoffs).
Resignations should then be linked to key business metrics such as quality of work, time to completion and bottom-line revenue – what is the impact of the loss of skills and capacity?
2. Identify the root causes
Having grasped the bigger picture, the next step is to carry out an in-depth data analysis to identify specific reasons which are causing employees to leave. Several factors could be in play here, so ask yourself what those might be. Remuneration, time between promotions, size and frequency of pay increases, tenure, performance, training opportunities, communication with management – looking into metrics like these can help to piece together trends and reveal blind spots within your organisation.
Segmenting employees into demographic and function categories can also uncover trends among groups of people. Such analysis will help businesses to understand who is at most risk of leaving, why, and potential areas that can be addressed to boost chances of retaining them. For instance, it might be that employees who only communicate remotely with supervisors are more likely to resign than those who receive in-person support.
3. Create bespoke retention strategies
Finally, with this information and insight in hand, organisations can create targeted programmes to correct specific issues. If you uncover that time between promotions and salary increases correlates with higher turnover rates, for example, then a specific remedial action could come in the form of reviewing and adjusting advancement and development policies.
It is possible that, by going through this process, you deem your data infrastructure insufficient to make these informed, bespoke decisions. If this is the case, then investing in an organised, user-friendly system for tracking and analysing metrics that will inform your retention efforts should be considered.
The rewards will follow. Hiring is an expensive process, one which costs UK employers on average £3,000 per recruit – by adopting a data-driven retention strategy, businesses can not only make significant cost savings, but also create a more productive, inviting and inclusive workplace for their employees.