In 2019, Texas A&M professor Anthony Klotz dubbed the phrase “The Great Resignation” to describe a voluntary, mass exodus from the workforce. When the labor market experienced record numbers of people leaving the market in 2020 and 2021, many began to use Klotz’s phrase to describe that phenomenon.
But recent data indicates that “Great Resignation” isn’t the most accurate descriptor of what we’re seeing.
For those companies looking to hire career professionals, particularly those with highly marketable and in-demand skills, you shouldn’t think of current trends as a “Great Resignation.”
Rather, you should think of them as a “Great Realignment.”
In other words, top employees aren’t quitting their jobs to play video games or fulfill a lifelong dream of travel. They’re quitting their jobs to go work for your competitors.
And why are they doing this? Because they’re going to work for jobs that better align with their values, goals, hopes and dreams.
Let’s dive into the data surrounding this Great Realignment. And, more importantly, we’ll give you some tips for how to hedge against it.
Why a “Great Realignment”?
So let’s talk about the term “Great Realignment.” Why is that more apt than the Great Resignation?
For starters, while the data indicates that people are quitting their jobs in record numbers, the unemployment rate continues to fall:
Historically, we experienced a massive spike during the pandemic, but now we’re just about back down to pre-pandemic baseline levels.
Of course, the definition of unemployment only includes people who are unemployed who are actively seeking employment. So could it be that unemployment is low because people have left the job market permanently?
Again, the data just don’t seem to back that up. According to the Bureau of Labor Statistics:
- In March 2020, the number of unemployed people who wanted a job was 5.5 million
- In April 2020, the number of unemployed people who wanted a job was 9.9 million
- In June 2022, the number of unemployed people who want a job was 6.1 million
So while there was a temporary exit from the workforce during the pandemic, the vast majority of those workers have returned. What that means is that people aren’t leaving the job market—they’re just leaving their jobs.
This is more consistent with a “Great Realignment” interpretation than a “Great Resignation.”
But what about “people just don’t seem to want to work”?
That’s a common refrain we hear—from everywhere from the grocery store to the local hardware store. There’s an attitude that the reason we’re seeing labor shortages is just because people have left the workforce and aren’t coming back.
In fact, survey data from Indeed indicates that 73% of employers are struggling to hire and retain workers. Conversely, only 5% are experiencing the opposite effect.
Across the board, here is how employers feel about the job market currently:
- 86% believe employers need to take immediate action to reduce churn
- 86% say they should increase concerns about resignations
- 85% agree the pandemic has changed beliefs around what a “good job” is
- 76% say resignations are contagious among the workforce
- 51% believe how they handled the pandemic resulted in subsequent resignations
But currently, there are specific sectors of the economy that are hardest hit by these challenges. According to data from the U.S. Chamber of Commerce, the industries with the biggest quit rates are:
- Leisure & hospitality (5.5%)
- Wholesale & retail trade (3.3%)
- Professional & business services (3.4%)
- Durable goods manufacturing (2.1%)
- Financial services (1.5%)
What we can see here is that industries that rely on skilled labor aren’t experiencing the same shortages that those who can easily replace employees are seeing. This is likely because specialized skills result in a clear understanding of value between employer and employee, leading to a more even-handed relationship.
The lesson here? Sectors that have to value their workers more aren’t as hard hit by resignations as others. If you focus on valuing your people, you’re less likely to lose them.
Why are workers looking for new jobs?
Given all that data we just analyzed, why are people so eager to look for a new job? What is the motivation behind the Great Realignment?
According to that same survey from Indeed, the following are the top reasons why employees are resigning:
- Higher pay (59%)
- Schedule flexibility (58%)
- Work-life balance (56%)
- Remote work options (54%)
- Focus on personal and family responsibilities (50%)
In other words, people aren’t quitting their jobs to go sit on the couch and play video games all day. No, they’re quitting one job so they can take the next step in their career, achieve greater life balance, and be in a place that values them as individuals with value.
As a result, many employers are stepping up their benefits. Perks like increased flexibility, higher pay or signing bonuses, and remote work options are now commonplace. What we’re actually seeing is the development of a new and interesting phenomenon: employees aren’t just making decisions with their heads, but also with their hearts.
According to survey data from LinkedIn, 74% of respondents indicated that these changes are a direct result of COVID-19.The unfortunate reality of the pandemic has had a two-fold effect:
- After working from home for a year, employees realize that more flexibility and balance is possible in their lives
- Employees value balance, especially time with friends and family, in light of a particularly difficult time filled with serious illness and loss
As a result, employees are demanding more from their employers than before. This has changed the market dynamics and put the ball in employers’ court: if you want to attract great talent, you have to step up your game.
What can you do about the Great Realignment?
At the end of the day, your top talent isn’t leaving the job market to pursue a lifelong travel dream or to stay at home. No, they’re leaving to go work for your competitors.
A study of more than 400,000 people published in Harvard Business Review found that when employees believe promotions are managed effectively, employee turnover rates are half that of other companies in the same industry.
And according to bonusly.com, 63% of those in a recent survey who said they are regularly recognized also said they are very unlikely to look for a new job.
So if you want to get serious about retention, here are some specific, actionable steps you can take:
- Spend some time listening to your employees and gather input
- Strive for maximum flexibility in your work arrangements, without sacrificing quality, productivity, and service
- Prioritize workplace safety, instituting and enforcing COVID protocols to mitigate people’s concerns
- Show empathy to your customer-facing teams, who are likely dealing with ugly complaints about delays, errors, or other issues
- Focus on retaining each individual on your team by prioritizing their growth and well-being; each person you lose is a blow to your organization’s effectiveness and morale
- Recognize that resignations are contagious, and work to allay any concerns your fellow team members may have
- Keep a pipeline of potential hires; in this market, it’s never a bad idea to have a few people in your back pocket just in case you lose a team member
Granted, you probably won’t be able to keep everyone. There are some people who are going to leave your company, despite your best efforts. But if you focus on building a great culture, respecting your team, and engaging in meaningful work, even those people who leave will be a great referral channel for new talent.
Are you struggling to build a pipeline of potential hires? If so, Brightwing can help you identify & qualify top talent. Fill out the form below.
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