What's driving the mass exodus at workplaces?

Eighteen months into the COVID-19 pandemic, Becki Butler quit her job.

For five years, Butler had worked in a corporate marketing role for one of New Zealand’s largest retail businesses.

No single reason drove Butler’s decision to quit. Rather, it was the result of several factors. Butler was ready for a new challenge, but it wasn’t just a case of itchy feet. Like many dealing with the stresses of the pandemic, Butler took time to reassess her career choices. This led to what many are calling a “pandemic epiphany”.

“It made me start to question what was really important,” Butler says. “I was separated from family who live overseas and spending more time at home with my children, which made me start to consider the role-modelling I do for them as a parent, the choices that I make and the kind of companies I work for.”

In 2020, Butler saw a psychologist to help clarify her values, motivations and what she loved about previous roles. These insights, combined with her volunteer work with Business Mentors New Zealand and SheEO, an organisation that supports women and non-binary entrepreneurs, reoriented her career goals around her desire to help others and her passion for business.

“I also learned that I’m incredibly motivated by legacy,” she says. “I really like to see the impact that my work is having at a human level.”

Butler decided “the time was right to make a change. She quit her corporate role to join a small business “driven by the pursuit of justice and equity, and a deep desire to see business as a force for good”.

New wave

She didn’t realise it at the time, but Butler’s decision to change jobs was part of a wave of attrition sweeping global workplaces. Dubbed the “Great Resignation”, a term coined by American economist Anthony Klotz, it’s a trend that has seen record numbers of people in the US quitting their jobs since April 2021. Records continued to fall in July, August and September, when 4.3 million Americans – or nearly three per cent of the total workforce – walked away from their jobs in search of greener pastures.

While the spike in resignations in the US is “partly a correction” after lower than-normal attrition rates during pandemic lockdowns, Aaron McEwan, vice-president of Gartner’s research and advisory arm, believes the higher rates point to a fracturing of people’s relationship with work.

Retail trade and leisure and hospitality, two industries on the pandemic’s frontline, experienced the highest level of attrition. In a country with a low minimum wage and few worker benefits, it’s perhaps not surprising that lowly paid retail and hospitality workers quit their jobs in droves in the hope of finding something better.

“The level of exploitation of workers in the US has reached such a critical point that people are almost rejecting the system,” says McEwan. “People have to hold down three jobs, and they still can’t afford to live, to pay their rent, to pay hospital bills; significant chunks of the population begin to lose faith in the ability to have aspirations.”

Quest for purpose

White-collar workers have also been resigning in greater numbers. In finance and insurance alone, the quit rate in the US increased by 39 per cent in the 12 months to September 2021. This is a cohort that mostly worked from home during the pandemic. Many worked long hours with little respite, leaving them burnt out and wondering if the cost to health and wellbeing is worth it.

Now, says McEwan, “they are looking for employers who are going to treat them better, who are going to provide a better work–life balance and better options around things like wellbeing”.

Other white-collar workers became disillusioned when their once varied jobs, “where every day was a little bit different”, merged into “one long Zoom call”, says McEwan. Stuck at home and unable to travel, many saw a new job with new responsibilities and a new team as a welcome change to the routine.

 

"Most knowledge work is location-agnostic. Suddenly, people saw they could slow down, spend more time with family, focus on wellbeing and still pursue a career."

 

The upheaval of the COVID-19 pandemic has caused many to look at their lives from a new perspective. “It’s made people understand the finite nature of life”, something that normally doesn’t figure in day-to-day decisions, says Repa Patel, an executive coach and director of Leading Mindfully Australia. “It’s really brought to life for people that their career choices matter.

Who they work for and how they work are really important, because life is short.”

Flexibility and autonomy emerged as key priorities among workers who reassessed their work–life balance during lockdowns. “Most knowledge work is location-agnostic,” says Patel. Suddenly, people saw they could slow down, spend more time with family, focus on wellbeing and still pursue a career.

While the Great Resignation was sweeping through the US in 2021, the Australian employment landscape was relatively quiet. Data from the Australian Bureau of Statistics shows that only 975,000 people – or 7.5 per cent of the Australian workforce – changed jobs in the 12 months to February 2021, the lowest annual job mobility rate on record.

Some analysts, including Dr Ben Hamer, who leads the Future of Work market at PwC Australia, have called this lull the “calm before the storm”. Hamer is one of the co-authors of What Workers Want: Winning the War for Talent, a report based on a survey of Australian workers, which found that 38 per cent intend to leave their current employer over the next 12 months.

Both Hamer and McEwan anticipate the Great Resignation to hit Australian shores in 2022. People often make big decisions over the summer holidays, when they have a chance to reflect on their achievements of the previous 12 months and their goals for the coming year, says Hamer. “Come the end of January, job advertisements will go up, people will apply in February, interview in March and, towards the back end of March, we’ll start seeing people handing over their letters of resignation.”

Not all resignations are bad news. An employee turnover rate of ten per cent promotes renewal, Hamer says. “You want that turnover for fresh ideas and thinking – that’s how we drive innovation and... fuel growth.” A rate of 38 per cent, however, risks jeopardising productivity and growth. “It becomes cost prohibitive and impacts business continuity and the organisation’s ability to deliver its work.”

Leadership expert Rebecca Houghton, founder of BoldHR, says she has already seen an uptick in resignations. “After almost two years of lockdown, there are quite a lot of people who are willing to take three months off. The proportion of people who are going to nothing else is really high.”

Stagnant wage growth is a contributing factor, she says. “A lot of my clients are starting to give people a push up in the salaries as a retention exercise, because they are recognising they’ve had flat growth for five years.”

Not everyone agrees that the Great Resignation is inevitable.

Professor Mark Wooden, from the University of Melbourne’s Institute of Applied Economic and Social Research, says the spike in resignations in the US is mostly driven by “less-skilled workers” in retail and hospitality who are on the pandemic’s battlelines.

Some, he says, quit because they don’t want to be exposed to the large proportion of the American public who refuse to wear masks and remain unvaccinated. Others have chosen to quit instead of getting the jab. In Australia, where vaccine compliance is much higher, Wooden sees no such conflict playing out.

Instead, employers should be concentrating on adapting to a hybrid model of work in order to overcome the “Great Resistance” from employees to “the idea of returning to the office and the daily commute”.

One size fits none

If the Great Resignation can teach us anything, it’s that one size fits no one. Houghton says workers want a “smorgasbord approach” to work, where multiple options are on the table.

Hamer agrees, with the What Workers Want report highlighting three clear priorities among workers: remuneration and reward, wellbeing and work–life balance, and experience, which includes culture and team spirit.

People want “to be paid fairly for the work that they do, to work for an organisation that values their wellbeing, and to work with good people”, says Hamer.

 

"It might not be you – it might be the pandemic that's making them leave, in which case there's not a lot you can do about it."

 

Below the top three, priorities start to fragment according to factors such as age, gender, industry and geography. When developing an employee value proposition, Hamer says, organisations should “hit the top three, and then provide flexibility underneath that to try to appeal to and tailor to different types of workers and audiences”.

The challenge for employers is to manage the complexity that comes with increased flexibility. Accommodating the conflicting demands of workers – for example, some who want to work five days in the office, others who want four days at home and those who want to work out of hours – while remaining fair and consistent is “tricky from a policy perspective”, Houghton admits. More difficult still in a world where there is no longer one rule for all is the question of leadership.

Trust is critical in a hybrid environment. Despite the evidence to the contrary, Houghton says many leaders suspect employees who aren’t present in the office are “taking the mickey” at home.

“If you are a leader who didn’t trust your people in the first place, you trust them even less now.”

One of the most significant findings of the What Workers Want report is a disconnect between senior leaders and their people.

“Employers feel like the number one thing that their workers want from the organisation is for the organisation’s values to marry up with the individual’s values,” says Hamer.

“That didn’t even rank in the top 10 for workers. When workers expressed that the number one thing they wanted was to work with good people, executives didn’t think that would rank in the top 10.”

Houghton says leaders must talk to their people. “Stop making assumptions that you know them and what’s best for them…Your assumption about what they want could be your undoing.”

Discussions with team members about “what would make them stay and what might make them go” will help leaders reconnect and re-engage with their workforce, she says.

After two years spent in and out of lockdowns, some attrition is inevitable.

“It might not be you – it might be the pandemic that’s making them leave, in which case there’s not a lot you can do about it,” notes Houghton.

However, “you can make it really clear that the door is always open, and they’re always welcome to come back. A lot of leaders take it personally – you can’t do that. Make sure it’s crystal clear that you’d have them back at the drop of a hat.”