The Great Resignation is an ongoing trend where millions of employees voluntarily resigned from their jobs, beginning in early 2021. Last year was a record-setting year for the labor market, with nearly 48 million people quitting their jobs and shifting their careers. The COVID-19 pandemic made it extremely common for employees to rethink their professions and long-term goals. More than 40% of the global workforce considered quitting or switching jobs during 2021!
Due to economic uncertainties during the beginning of the pandemic, plans to make professional transitions were put on hold.
Once the panic and disaster of the pandemic died down, these plans resumed. A large portion of unsatisfied workers was looking for large-scale career changes. Some were looking for jobs in completely new industries!
The Great Resignation has plateaued in the last 6 months, but it is still far from over. Currently, the number of jobs available still exceeds the number of workers for hire, giving candidates additional leverage to negotiate during the recruitment process. However, at the end of 2022, turnover is less prominent. Businesses are finding it slightly easier to retain employees, but resignations are still continuing into the new year. Current trends point to a reversal of this balance, seeing less turnover and reduced leverage by candidates when it comes to compensation, benefits, and other terms of employment.
The Great Re-Engagement is a workforce-wide effort to minimize the Great Resignation turnover. The essential realignment is centered around the employer’s ability to reengage their employees and the availability of jobs to decline and become more competitive for job seekers. It is essential for management to understand and adapt to their employees’ wants and needs, however, time may be running out for those underqualified and overcompensated who were hired out of necessity in the past 18 months as companies reexamine their needs and the availability of talent in the current job market.
Since the pandemic, workers prioritize happiness more than ever. According to Glassdoor, 90% of people believe how they feel at work matters, while only 49% of people reported that their companies value their happiness. Maintaining a strong sense of purpose and happiness in the workplace is key! Without purpose, employees cannot stay motivated or productive. People crave satisfaction, and with satisfaction, employees will stay.
Remote and hybrid positions are incredibly important to employees in 2023. Since the pandemic normalized remote or hybrid work, it’s extremely sought after. According to Indeed, 9.8% of job searches mention remote work, which is a dramatic increase from 1.7% before the pandemic. These roles are desirable because they allow employees to maintain the same level of productivity while enjoying flexibility. Remote work also benefits employers because they have a global talent pool to pull from!
In order to attract quality talent, some employers are increasing their benefits and are making it well known. Research shows that between 2019-2022, there was a significant increase in paid time off from 17% to 34%. Employers are also increasing the availability of mental health benefits. In 2022, according to Glassdoor, 63% of their benefit reviews included the keywords “mental health,” which is a 14% increase since 2019.
In contrast, most companies are unhappy with the current workforce and level of effort. As things normalize, employers will reevaluate their current staff, benefits packages, and compensation plans. Throughout this process, the Great Resignation will slow down, employers will once again lead the market, and employees won’t have the same level of bargaining power.
Many companies are putting as much effort into hiring the right talent as the employees are in their job search. Employers are finding it essential to discuss more than just competencies in their interview processes. They pay closer attention to the candidate’s wants and needs, from an expectations and responsibilities perspective. This way, employers can be sure to find talent that fits with their reevaluated policies.
Companies are making changes to health and wellness packages, such as health insurance coverage and retirement benefits. Employers are considering offering more features to existing plans or offering new coverage, depending on the employee’s needs. For example, packages that include mental health services or paid parental leave. Health insurance has been at the forefront of employees’ minds since the pandemic began, so employers have to take action to maintain their current employees and attract new talent in 2023.
Overall, salaries are projected to increase by .4% in 2023. The slight increase in compensation is caused by the ongoing challenges of finding and retaining quality workers. Employers have to develop a compensation strategy that keeps up with the constantly changing market. An option that companies can consider is providing smaller, more frequent performance-based raises. This method, as well as one-time bonuses, provides a good financial incentive for employees and doesn’t hurt the employer’s salary expenditure.