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Commentary: Bosses can't avoid recognising the great resignation wave started before the pandemic

Employees are quitting at record rates but is it really a new trend? This dean of a US business school says it may simply be the new normal employers are going to have to get used to.

Commentary: Bosses can't avoid recognising the great resignation wave started before the pandemic
Man in front of recruitment sign (Photo: AP)

IRVINE, California: Finding good employees has always been a challenge - but these days, it's harder than ever. And it is unlikely to improve anytime soon.

The so-called quit rate - the share of workers who voluntarily leave their jobs - hit a new record of 3 per cent in September 2021, according to the latest data available from the United States Bureau of Labour Statistics.

The rate was highest in the leisure and hospitality sector, where 6.4 per cent of workers quit their jobs in September. In all, 20.2 million workers left their employers from May through September.

Companies are feeling the effects. In August, a survey found that 73 per cent of 380 employers in North America were having difficulty attracting employees - three times the share that said so the previous year. And 70 per cent expect this difficulty to persist into 2022.

Observers have blamed a wide variety of factors for all the turnover, from fear of contracting COVID-19 by mixing with co-workers on the job to paltry wages and benefits being offered.

Human resource management professionals examine how employment and the work environment have changed over time and the impact this has on organisations and communities. 

While the current resignation behaviour may seem like a new trend, data shows employee turnover has been rising steadily for the past decade and may simply be the new normal employers are going to have to get used to.

Sept. 22, 2021, a hiring sign is placed at a booth for Jameson's Irish Pub during a job fair in the West Hollywood section of Los Angeles. (AP Photo/Marcio Jose Sanchez, File)


The US - alongside other advanced economies - has been moving away from a focus on productive sectors like manufacturing to a service-based economy for decades.

In recent years, the service sector accounted for about 86 per cent of all employment in the US and 79 per cent of all economic growth.

That change has been seismic for employers. A majority of the jobs in service-based industries require only generalisable occupational skills such as competencies in computing and communications that are often easily transportable across companies.

This is true across a wide range of professions, from accountants and engineers to truck drivers and customer services representatives.

As a result, in service-based economies, it is relatively easy for employees to move between companies and maintain their productivity.

And thanks to information technology and social media, it has never been easier for employees to find out about new job opportunities anywhere in the world.

The growing prevalence of remote working also means that in some cases employees will no longer need to physically relocate to start a new job.

Thus, the barriers and transition costs employees incur when switching employers have been reduced.

Greater options and lower costs to move mean employees can be more selective and focus on picking jobs that best fit their personal needs and desires.

What people want from work is inherently shaped by their cultural values and life situation. The US labour market is expected to become far more diverse going forward in terms of gender, ethnicity and age.

Thus, employers that cannot provide greater flexibility and variety in their working environment will struggle to attract and retain workers.

Employers now have a greater obligation than in the past to convince existing and would-be employees why they should stay or join their organisations. And there is no evidence to suggest this trend will change going forward.

Is 2021 the year when employees take back control over work amid predictions of a great resignation wave? Listen to CNA's Heart of the Matter:


It has been estimated that the cost to the employer of replacing a departing employee is on average 122 per cent of that employee's annual salary in terms of finding and training a replacement.

Thus, there is a large incentive for businesses to adapt to the new labour market conditions and develop innovative approaches to keeping workers happy and in their jobs.

A survey in May found that 54 per cent of employees surveyed from around the world would consider leaving their job if they were not afforded some form of flexibility in where and when they work.

Given the heightened priority employees place on finding a job that fits their preferences, companies need to adopt a more holistic approach to the types of rewards they provide.

It's also important that they tailor the types of financial, social and developmental incentives and opportunities they provide to individual employees' preferences.

It's not just about paying workers more. There are even examples of companies providing employees the choice of simply being paid in a cryptocurrency like Bitcoin as an inducement.

While customising the package of rewards each employee receives may potentially increase an organisation's administrative costs, this investment can help retain a highly engaged workforce.


Companies should also plan on high employee mobility to be endemic and reframe how they approach managing their workers.

One way to do this is by investing deeply in external relationships that help ensure consistent access to high-quality talent. This can include enhancing the relationships they have with educational institutions and former employees.

For example, many organisations have adopted alumni programs that specifically recruit former employees to rejoin.

These former employees are often less expensive to recruit, bring access to needed human capital and possess both an understanding of an organisation's processes and an appreciation of the organisation's culture.

The quit rate is likely to stay elevated for some time to come. The sooner employers accept that and adapt, the better they'll be at managing the new normal.

Ian O. Williamson is the Dean of the Paul Merage School of Business, University of California, Irvine. This commentary first appeared on The Conversation.


Source: CNA/ep