January is always a time for people to be thinking about a change, with the beginning of the calendar year normally the busiest time of year for recruitment agencies.
This year has been different, with the ‘Great Resignation’ gaining momentum in many developed economies, we have seen the desire for change, the need to reevaluate become mainstream.
In September 2021 alone over 3% of the American workforce quit their jobs – more than 4m people – whilst here in the UK 69% of workers said they were not only looking for a new role but “confident” of finding one in the next few months.
These statistics represent a change from what has gone before. Not just in their scale, but in that it hasn’t taken the post-Christmas lull or January blues or New Year’s Resolutions to make people want to make a change in their lives.
The Covid-19 pandemic has led to a fundamental reevaluation of huge swathes of our lives and habits, as we were locked inside and forced to consider what mattered to us.
This has manifested in multiple ways – research from Accenture found that 60% of consumers were now making more environmentally conscious purchasing decisions, whilst other research found that it has driven a rise in people buying plant-based alternatives to meat or choosing more vegetarian food options. The pandemic has caused our trust in science to skyrocket, people appreciate their family and friends more, we view our bodies differently and a growing majority wants a “fairer future” even if they also don’t believe it will happen.
But arguably nowhere has seen a bigger reevaluation than the world of work, with both employees and employers having to reconsider what it is they are looking for and offering.
Vacancy rates in the economy are at the highest level ever recorded, partly driven by people moving roles and partly because of some significant labour shortages across a number of sectors of the economy.
The “Great Resignation”, as it has been termed, is a manifestation of these attitudinal changes, but it seems that this is not just a fleeting reaction to the pandemic, but that a fundamental shift might have occurred over the past 18 months that will change the way we work forever.
Working from home has helped drive a power shift for white-collar workers – increased flexibility and a better work-life balance have given people a taste of a life that was once a preserve of the self-employed, and many are reluctant to give it up. 70% of people polled in the UK thought they would never return to office working as they had before the pandemic, whilst the rebounding economy has caused job vacancies to surge to record levels.
Combined with an increasingly mobile workforce, and it is the employee and not the employer who wields the power in today’s market. Employers are responding by increasing pay – 80% of employers are expecting to raise pay in the next year, with a median increase of 2.5% up from a median of 1.6% last year – but pay is only one of the levers that you can pull to attract talent, and it is the most short-termist.
Whilst pay will always be important, it will not buy you loyalty and can be transactionally trumped by a higher offer elsewhere.
To truly rethink your people policies for a post-pandemic world the solution is more holistic and much harder to implement and communicate.
For a long time, there has been a lot of chat (and a lot of hot air) about organisational purpose, but research is consistently showing that employees today want their job to give them a sense of purpose both at work and in the personal lives. This does not mean that every organisation needs to set out to change the world, or solve huge global problems such as climate change, but that organisations need to be mindful of the impact of their operations, and how they engage with all of their stakeholders, not just their customers.
I have written before about how the pursuit of profit above all else does not actually deliver the best results, and in many ways, the pandemic has only accelerated changes that were already underway.
Employers worrying about how to keep their best talent or find the stars of the future may be tempted to rush to increase pay (and that possibly will be part of the solution), but it is not the only answer and misses a more fundamental opportunity that will underpin future success.
Longer-term thinkers will be reevaluating their employee offer, thinking about how they can embrace flexibility to increase their available talent pool (the underemployment of new mums remains one of the missed opportunities of our economy) and build a better business in partnership with their employees.
Those that take this moment to take the harder road will find it pays off, not just in their hiring and retention, but in the overall performance of their organisation.
Having strong ESG (environment, social and governance) credentials is consistently shown to create value and drive performance and, who knows, if enough of us do it we might just create that fairer future after all.
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