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Human resource management


WHO IS DRIVING THE GREAT RESIGNATION?

An analysis of 9 million global employee records sheds light on key trends
around which employees are most likely to quit.
by
 * Ian Cook

by
 * Ian Cook

September 15, 2021
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Summary.    The last several months have seen a tidal wave of resignations, in
the U.S. and around the world. What can employers do to combat what’s being
called the Great Resignation? The author shares several key insights from an
in-depth analysis of more than 9...more
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According to the U.S. Bureau of Labor Statistics, 4 million Americans quit their
jobs in July 2021. Resignations peaked in April and have remained abnormally
high for the last several months, with a record-breaking 10.9 million open jobs
at the end of July. How can employers retain people in the face of this tidal
wave of resignations?

Addressing the root causes of these staggering statistics starts with better
understanding them. To explore exactly who has been driving this recent shift,
my team and I conducted an in-depth analysis of more than 9 million employee
records from more than 4,000 companies. This global dataset included employees
from a wide variety of industries, functions, and levels of experience, and it
revealed two key trends:


1. RESIGNATION RATES ARE HIGHEST AMONG MID-CAREER EMPLOYEES.

Employees between 30 and 45 years old have had the greatest increase in
resignation rates, with an average increase of more than 20% between 2020 and
2021. While turnover is typically highest among younger employees, our study
found that over the last year, resignations actually decreased for workers in
the 20 to 25 age range (likely due to a combination of their greater financial
uncertainty and reduced demand for entry-level workers). Interestingly,
resignation rates also fell for those in the 60 to 70 age group, while employees
in the 25 to 30 and 45+ age groups experienced slightly higher resignation rates
than in 2020 (but not as significant an increase as that of the 30-45 group).

There are a few factors that can help to explain why the increase in
resignations has been largely driven by these mid-level employees. First, it’s
possible that the shift to remote work has led employers to feel that hiring
people with little experience would be riskier than usual, since new employees
won’t have the benefit of in-person training and guidance. This would create
greater demand for mid-career employees, thus giving them greater leverage in
securing new positions.

It’s also possible that many of these mid-level employees may have delayed
transitioning out of their roles due to the uncertainty caused by the pandemic,
meaning that the boost we’ve seen over the last several months could be the
result of more than a year’s worth of pent-up resignations.

And of course, many of these workers may have simply reached a breaking point
after months and months of high workloads, hiring freezes, and other pressures,
causing them to rethink their work and life goals.


2. RESIGNATIONS ARE HIGHEST IN THE TECH AND HEALTH CARE INDUSTRIES.

We also identified dramatic differences in turnover rates between companies in
different industries. While resignations actually decreased slightly in
industries such as manufacturing and finance, 3.6% more health care employees
quit their jobs than in the previous year, and in tech, resignations increased
by 4.5%. In general, we found that resignation rates were higher among employees
who worked in fields that had experienced extreme increases in demand due to the
pandemic, likely leading to increased workloads and burnout.

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EMPLOYERS MUST TAKE A DATA-DRIVEN APPROACH TO IMPROVING RETENTION

These trends highlight the importance of taking a data-driven approach to
determining not just how many people are quitting, but who exactly has the
highest turnover risk, why people are leaving, and what can be done to prevent
it. The details will look different in every organization, but there are three
steps that can help any employer more effectively leverage data to improve
employee retention:


1. QUANTIFY THE PROBLEM.

Before you can determine the underlying causes of turnover at your organization,
it’s critical to quantify both the scope of the problem and its impact. First,
calculate your retention rate using the following formula:

> Number of Separations per Year ÷ Average Total Number of Employees = Turnover
> Rate

You can use similar formulas to identify how much of your turnover is coming
from voluntary resignations, versus from layoffs or firings. This will help you
gain visibility around exactly where your retention problem is coming from.

Next, determine the impact of resignations on key business metrics. When
employees leave an organization, remaining teams often find themselves without
key skillsets or resources, negatively impacting everything from quality of work
and time-to-completion to bottom-line revenue. It’s important to track how
increased turnover correlates with changes in other relevant metrics in order to
get a full picture of the costs of resignations.

For example, a trucking company I worked with identified that what appeared to
be a small increase in turnover due to a nationwide driver shortage was in fact
costing them millions of dollars in hiring and training resources. Quantifying
the problem both helped leaders get the internal buy-in necessary to address it,
and informed decisions around what kind of retention interventions would be most
effective.


2. IDENTIFY THE ROOT CAUSES.

Once you’ve identified the scope of your retention problem, it’s time to conduct
a detailed data analysis to determine what’s really causing your staff to leave.
Ask yourself which factors could be driving higher resignation rates? Exploring
metrics such as compensation, time between promotions, size of pay increases,
tenure, performance, and training opportunities can help to identify trends and
blind spots within your organization. You can also segment employees by
categories such as location, function, and other demographics to better
understand how work experiences and retention rates differ across distinct
employee populations.

READ MORE ABOUT

The Great Resignation Doesn’t Have to Threaten Your DE&I Efforts

This analysis can help you identify not just which employees have the highest
risk of resigning, but also which of these employees can likely be retained with
targeted interventions. For example, after extensive analysis, the trucking
company found that drivers who had less experience and a remote supervisor were
much more likely to resign than more-experienced drivers and those receiving
in-person support.


3. DEVELOP TAILORED RETENTION PROGRAMS.

Now that you’ve identified the root causes of turnover at your organization, you
can begin to create highly customized programs aimed at correcting the specific
issues that your workplace struggles with most. For example, if you discover
that people of color are leaving your organization at a higher rate than their
white peers, a DEI-focused approach may be called for. If you find that time
between promotions correlates strongly with high resignation rates, it may be
time to rethink your advancement policies.

Importantly, you may discover through this process that a lack of effective data
infrastructure is hampering your ability to make these sorts of data-driven
decisions. One higher-level intervention that may be necessary before you can
begin any sort of targeted campaign is to invest in an organized, user-friendly
system for tracking and analyzing the metrics that will inform your retention
efforts.

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Adopting a truly data-driven retention strategy isn’t easy, but it’s worth the
effort to do it right, especially in the current market. After implementing a
targeted retention campaign based on a detailed analysis of key metrics, the
trucking company I worked with saw a 10% reduction in driver resignations, even
in the face of fierce competition from other employers. With greater visibility
into both how serious your turnover problem really is, and the root causes that
drive it, you’ll be empowered to attract top talent, reduce turnover costs, and
ultimately build a more engaged and effective workforce.

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Read more on Human resource management or related topic Employee retention
 * Ian Cook is an advocate for the crucial role that people play in helping
   companies thrive. His career has focused on enabling people, teams, and
   companies to perform at their best. For the last 15 years Ian has been
   helping leaders elevate their HR strategies and programs through the
   effective use of people analytics. For more information on Visier, the
   globally recognized leader in people analytics and planning,
   visit www.visier.com, and follow the company on Twitter and LinkedIn.

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Read more on Human resource management or related topic Employee retention



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THE GREAT RESIGNATION STEMS FROM A GREAT EXPLORATION


6 STRATEGIES TO BOOST RETENTION THROUGH THE GREAT RESIGNATION



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