If employers were beginning to believe that the end of the Great Resignation was in sight, they may need to think again. In fact, new research from Gartner reveals that annual employee turnover in the U.S. will likely stay at levels that are 20% higher than the pre-pandemic average. The company predicts that around 37 million people will leave their jobs in 2022, and while that’s lower than the record 47.4 million who voluntarily quit in 2021, it’s still remarkably high.
Piers Hudson, senior director in the Gartner HR practice, provided an example to give some perspective around this increase. “An individual organization with a turnover rate of 20% before the pandemic could face a turnover rate as high as 24% in 2022 and the years to come,” he said. “For example, a workforce of 25,000 employees would need to prepare for an additional 1,000 voluntary departures.” That’s on top of the 5,000 departures they would normally experience in any given year!
There’s no question that these are alarming statistics — but how should companies prepare for the implications of long-term elevated turnover rates? In today’s article, I’ll discuss 10 things companies can do to embrace this new reality and set themselves up for success in the long-run. Let’s take a look:
1. Reframe how you think about this trend. First, it’s a good idea to stop thinking about the Great Resignation as a passing trend. Referencing Gartner’s new study, a recent Business Insider article coined what may be a more accurate term for this: the “Forever Resignation.” While only time will tell when (or if) the above average quit rates will decline to their pre-pandemic levels, forward-thinking businesses are recognizing that this is their “new normal” and they’re adapting accordingly, rather than waiting for things to go back to how they were before.
2. Ramp up your recruitment efforts. With all of the remote jobs that are available now, employees have more opportunities than ever before — and they’re not afraid to job-hop. That’s why I recently wrote an article highlighting 5 Tips to Recruit Talent in a Tight Labor Market. The article is a great place to start, as it offers up some helpful ways your organization can stand out in a crowded job market. It also emphasizes the importance of employee referrals, which can help you bring on more reliable talent.
3. Be prepared for “ghosting.” In a recent Wall Street Journal article, Jonas Prising, chairman and CEO of staffing agency ManpowerGroup Inc., noted that “The incidence of so-called ghosting — of accepting offers and then saying that they’ll start and not showing up — is at a record high.” Case in point: Southwest Airlines said that 15% to 20% of new hires don’t turn up on their first day. While there’s no real way to eliminate this problem, companies who are experiencing abnormally high “ghosting” rates should create contingency plans if workers don’t show up.
4. Recruit retired workers to help fill your skills gap. Millions of people retired early during the pandemic, but many are being lured back by higher wages and other attractive benefits like flexible work arrangements. In fact, a recent Washington Post article noted that an estimated 1.5 million retirees have reentered the U.S. labor market over the past year, which means that the economy has made up most of the extra losses of retirees since February 2020. If your company is struggling with a talent shortage, it’s not a bad idea to reach out to some of your retired workers — you never know who might be interested.
5. Seek out boomerang employees. This piece of advice is focused on another sub-group of former employees: those who decided to explore other career options or take some time off. I wrote an article a few weeks ago titled Why Boomerang Employees Will Become More Common, highlighting the wide range of benefits these workers can offer. If your company doesn’t have a strong alumni network and communication program in place, there’s never been a better time to focus on this. One study found that 43% of people regret leaving their job and nearly 1 in 5 have already boomeranged back.
6. Revaluate your job requirements. A little over a year ago, I wrote about how some companies are dropping their degree requirements in a move to widen their talent pool. Since then, this trend has picked up a lot of momentum, especially for tech roles. Case in point: 50% of IBM’s U.S. job openings do not require a four-year degree. And last year, the White House announced limits on the use of educational requirements when hiring for IT positions. Instead, organizations are focusing on skills-based hiring and many are offering apprenticeship or training programs to help people transition into roles.
7. Focus on upskilling your current workforce. This is another area that’s gained a lot of traction over the past few years. In fact, Willis Towers Watson finds that the number of employers looking to equip their workers with new skills has grown nearly 70% in the last three years. Not only can upskilling help address widespread talent shortages, but it also gives workers the ability (and financial support) to advance their careers. That’s why organizations like Walmart, Verizon, Amazon, and many others are investing millions of dollars into upskilling their employees.
8. Stay competitive with the right benefits. This should go without saying, but if your company is behind the curve with respect to your benefits package, it’s critical that you catch up — and quickly. Today’s workers demand flexibility, they want best-in-class healthcare and well-being support (especially for their mental health), and they expect their employer to offer family-friendly benefits. Oh, and don’t forget about pay — U.S. companies are expecting to give workers a 3.4% raise in 2022, but many companies are offering higher raises or perks (like sign-on bonuses) to help attract and retain talent.
9. Increase your company’s pay transparency. Last month I wrote an article about how pay transparency could help end the Great Resignation. The article highlighted new research from PayScale, which found that most employees think they’re being paid below market — even if they aren’t. And that’s a huge problem, because among people who believe they are underpaid, 66% are seeking a new job, compared to just 34% of those who believe they are paid at or above market. If your company is overly protective of your pay information, it’s worth examining how this might be affecting employee retention.
10. Use automation to replace unskilled jobs. In my 2022 Workplace Trends Forecast, I discussed how many companies have turned to automation technologies to replace workers, and I noted how this area will continue to grow in the future. Robots and chatbots are already being widely deployed to clean buildings, handle manufacturing tasks and agricultural work, replace call center staff and fast food workers, and much more. If your company requires these types of roles for your operations yet you’re struggling to fill them, consider whether automation could help permanently close that gap.
As the reality of the “Forever Resignation” settles in, businesses will need to be extremely proactive when it comes to attracting and retain talent. I hope today’s article has given you some ideas to stay ahead of this widespread economic trend — be sure to join the conversation on LinkedIn and let me know your thoughts on this topic!