You have probably already heard about “The Great Resignation” plenty by now. The topic is trending globally on the back of a record 4.3 million job leavers in the US in August 2021 and concerns that it applies internationally.
Unfortunately, New Zealand doesn’t have great timely public data series on current and anticipated turnover levels. However, a recent AUT, Wellbeing at Work study found that the proportion of those keen to change jobs increased about 10 percentage points from 34.7 per cent to 46.4 per cent.
So what can organisations do to prepare to ride out the wave
1. Improve perceptions of leadership quality
DDI’s (Development Dimensions International) recently released HR Leadership Insights Report points the way with and emphasis on Leadership; as perceptions of leadership quality impact turnover (e.g. if it is high there is less turnover compared to if it is low).
In their study, summarised in the report, they highlight three leadership skills that help leaders thrive when experiencing high turnover:
- Delegation and empowerment: Do you have a backup plan if someone leaves?
- Leading virtually: Remote and hybrid working are here to stay for many but there are upsides and downsides for the organisation and the employee. Are your leaders good at leading virtually? Building strong relationships and collaboration online so they remain productive and connected.
- Digital acumen: Is your team able to transition to manage workflow efficiently online or is it a burden?
These skills enable leaders to respond to turnover more quickly.
2. Be strategic and proactive
When turnover is high, your leaders and HR teams can be flat tack just replacing and covering for people. However, when your business environment changes, your organisation, processes, decision making, rewards, people, and culture must adapt. For example, is you remuneration framework still fit for your purpose? Do you want to wait for people to leave before making adjustments to your approach or be more proactive to relieve pressures? Do you have a plan for your key talent?
In relation to recruitment, do you need to change this up? Advertising in a busy market can be a challenge when there is a skills shortage. Can you reach the passive candidates who make up the bulk of the target market? Hint: most organisations can’t do this well on their own.
3. The personal touch
Individuals are feeling the pressures of disruptive change. The social contract for many is being disrupted; they might be questioning where to from here. Are they overstretched? Are they bored and underutilised? Or is the excitement and energy in sync with their opportunities? When there is disruption both personally and professionally, there is also an opportunity to connect and acknowledge people personally, which is necessary before people are ready to embrace the options presented.
4. Build a compelling proposition
Even if salaries rise, there is the question of whether this will be more than the inflation increase of 5.9% (Annual increase to December 2021 Statistics NZ). In recent times, that would be a large pay increase, but it would feel like you are just treading water in the current environment. With labour supply shortages, low unemployment, and challenges in getting migrant workers, it is easy to see these pressures leading to increased wage pressure and job-seeking activity as people reevaluate their opportunities. Employers need to re-evaluate their offering proactively in this environment or find themselves being picked over by others.
There are many things you can do to try and ride out a wave of resignations. The organisations that do this best will provide employees with a compelling future for the organisation and for them personally and professionally. And they will also be proactive in adjusting their business and pay and terms and conditions for inflation and hybrid working etc. Done well, your organisation could be in for an exciting ride through the wave and out the other side - while others may ‘wipe out’.