Over 50 million people voluntarily left their jobs in 2022, beating out the nearly 48 million who left in 2021, according to BLS data. But after several years of record-high quit rates, the tides may finally be turning in favor of employers. Some of the signs that the Great Resignation (or Big Quit) is over include:
- Quit rates are declining. In June, the number and rate of quits decreased to 3.8 million and 2.4%, respectively. These numbers have steadily declined and are now virtually identical to pre-pandemic rates.
- Labor force participation is rising. The labor force participation rate for workers aged 25 to 54 fell to less than 80% in April 2020, during the height of the pandemic. As of June 2023, the rate had risen to 83.5%.
- Job postings are down. Job openings, a measure of labor demand, dropped to around 9.6 million as of the last day of June, the lowest level since April 2021.
- Pay gains for job switchers are slowing. According to ADP Pay Insights, the pay increases workers gained from switching jobs peaked in June 2022 at over 16%. As of April, this number was down to 13.2% and had declined from around 14% in just one month — the lowest pace of growth since November 2021.
Many experts are referring to the phase we’re entering into now as the “Big Stay.” And while employees may not exactly be celebrating this new era, the shift is good news for employers — particularly HR leaders. In fact, retention remains the top source of stress for HR leaders, according to isolved.
But that doesn’t mean HR should rest on its laurels. Rather, leaders should take advantage of the less-stressful labor market to ramp up retention efforts — because if employees do leave, it could be difficult to fill their roles. Workers everywhere are going to be more likely to stay with their current jobs, and recruiting high-quality talent could be a challenge.
Leaders also need to recognize that while employees may not be leaving, that doesn’t mean they’re sticking around because love their job. A June Gallup poll found that an alarming 59% of workers are “quiet quitting” (i.e., they’re disengaged and underperforming). Another 18% are “loud quitting,” meaning they’re actively disengaged.
These eye-opening statistics underscore why companies shouldn’t get too complacent, despite the more favorable labor market. In today’s article, I’ll discuss three areas leaders can focus on to boost engagement and make the most of the Big Stay. Let’s take a look.
How to maximize a labor market that favors organizations
Improve your company’s learning & development opportunities
Showing your employees that you’re invested in their growth is a key way to increase their loyalty and keep them engaged at work. Companies that are getting this right typically offer a mix of programs and benefits, including online and in-person courses, mentoring, internships or apprenticeships, and tuition reimbursement.
Employers should also ensure that workers have opportunities for advancement and clear career pathing. My advice for leaders? Take advantage of the technologies that are available to help support you in this area. For example, isolved’s Learn & Grow management system can serve as a centralized hub for all aspects of employee development.
Fortunately, investing in your team members won’t just benefit them — it can also set your organization up for long-term success by addressing skills gaps. According to the World Economic Forum’s 2023 Future of Jobs Report, nearly half (44%) of workers’ skills will need to be updated within the next five years.
Make sure there’s a clear link between performance and recognition
Recognizing employees for a job well done is one of the easiest ways to ensure they feel appreciated. While there’s nothing wrong with a simple “thank you,” today’s tech-savvy workers may prefer a more gamified approach that allows them to see how they’re contributing to business goals and how they stack up against their peers.
In fact, 42% of employees say the ability to monitor and manage their own performance keeps them engaged at work. Workers also report that the ability to tie their goals with the company’s goals helps boost their motivation.
With this in mind, consider using a platform that allows workers to score points on a leaderboard, nominate colleagues for awards, and win prizes based on performance and teamwork. It’s also helpful if these tools provide visibility into how individuals and/or teams are contributing to the success of the organization.
Focus on enhancing your culture and employee experience
During the Great Resignation, companies took the initiative to improve their employee value proposition in a variety of ways. Some enhanced their benefits package, while others showed their support by allowing employees to work remotely or have flexible scheduling arrangements.
Even if you feel your organization is already going above-and-beyond, that doesn’t mean you should get complacent. Instead, work on strengthening your culture and making your organization an even better place to work.
For example, we know that connectedness continues to be an issue, so make time for socialization and relationship-building among your team members. And prioritize making life easier for your team members in other ways (e.g., by offering better tools and technologies, or streamlining tedious processes).
Making the most of a new era
Many companies are no longer scrambling to retain employees, and that’s great news for HR teams. However, leaders should stay focused on creating a great experience for their staff. Remember that boosting employee satisfaction can only serve to benefit your business, especially because “quiet quitting” (i.e., disengagement) continues to be such a widespread issue.
Thanks for reading — be sure to join the conversation on LinkedIn and let me know your thoughts on this topic!