The great resignation has led to the biggest scramble for talent in many years, but is the solution to push up wages and offer more perks or negotiate a more fluid contract with employees?
While the pandemic has changed many aspects of working life forever, certain resultant trends could be seen as a flash in the pan. One such example is the great resignation - dramatically heightened levels of employee movement and staff turnover that appears to have taken off in mid-2021. The desperate nationwide demand for talent has turned the job market into an employees’ paradise, but surely this can’t continue for long?
That depends, says Brian Kropp head of HR research at Gartner. Kropp highlights three factors driving the great resignation: a “hot” economy, the advent of hybrid working and the realisation brought about by the pandemic that many people want more from their jobs than they are currently getting.
While some reasons for this high turnover are temporary, Kropp believes that around 40% to 45% of the trend is due to a permanent shift in the labour market - for knowledge workers in particular. “The reality is that in a remote, hybrid world, workers just have more options,” he says.
This is something Hayley Cummings, head of people at restaurant chain Pizza Pilgrims, has noticed. “People are looking for different things from a role now,” she says. “Some of our key team have said ‘I love my job, but there’s a restaurant around the corner from my house which I’m going to work at instead because I don’t want to commute any more.’”
Embracing employees who come and go
With increased job movement, employers may have to get comfortable with the idea that few of the people they hire will be with them for the long haul. Cummings says this is something Pizza Pilgrims has already accepted.
“We are really thinking about how we can tap into all this talent now,” she explains. “We are saying to people ‘why don’t you come and work with us for six months to a year?’”
She believes that there is an untapped pool of talent in the market if companies can stop fixating on retention. People who have been made redundant or who are using this moment as an opportunity to rethink what they want from their next job may have an array of valuable skills, even if they might not stay in the job or the sector long term.
“Our message is that you don’t have to come in and commit to working here for three years, as long as you work hard when you’re here,” says Cummings.
Many will argue that this approach is far easier for the hospitality industry, which is used to a high level of seasonal or short-term workers. For organisations that rely heavily on knowledge workers, for example, accepting that employees may not stick around long term may require a complete overhaul of the way they operate.
Kropp believes businesses can expect to see a 50% higher turnover rate in future than pre-pandemic. That may well be good news for recruiters, who can help companies deal with high levels of churn in the labour market, but will require bosses and HR teams to rethink how they work.
For example, higher turnover might mean that longer-term projects will need setting up in new ways so that a steady influx and outflux of talent doesn’t jeopardise their success. And companies may choose to save money through reducing learning and development budgets “because if the average tenure for employees decreases,” points out Kropp, “developing them has less value.”
Indeed, some businesses may decide to re-evaluate the number of permanent staff they hire, choosing to rely more on third-party contractors. Kropp believes that certain employers might identify the most important roles in the business and dedicate resources, support and benefits to them alone, outsourcing less specific or important work to external parties.
Why business should still invest in people
But not everyone agrees that now is the time to chop training budgets and slash permanent staff numbers. Dr Charmi Patel, associate professor in international human resource management at Henley Business School, instead believes savvy businesses should take this as an opportunity to look internally and prioritise talent already in the business.
“The great resignation provides opportunities for organisations to look for talent in places they’ve never looked before,” says Patel. “They need to look inwards to figure out some of the recruitment channels they have missed, to find really good talent that they were never able to tap into before.”
One way to identify this internal talent is skills mapping. “Organisations cannot not do skills mapping - that would be a stupid thing, professionally speaking,” says Patel. “HR managers have this data. They have people who left before the great resignation, so they know the reasons and the skills gaps. They know what they will need for the future, so they’ve got to be proactive.”
Pizza Pilgrims has chosen to take this one step further and use its existing staff’s knowledge to upskill the organisation as a whole. In early 2020, the brand launched a Training Academy where members of different departments could come together to share their knowledge. This could be around anything from operations and marketing to making pizza in the Neapolitan style.
The academy also provides a safe space for new employees to learn the tricks of the trade, skills that Cummings fully expects workers to take to their next roles, once they move on.
“We’ve got a real passion for opening the doors to hospitality. We encourage people to work with us for six months or a year because the skills you develop in hospitality, you just don’t get anywhere else and you can take them on with you,” she says.
This attitude to development is a strategy for combating the great resignation, says Cummings. “We’ve got this lovely culture where we can really train and develop talent. It’s really helped to reinvest in our existing team first and because we’ve made sure they’re happy, that obviously helps when you want to bring new people in.”
As the war for talent rages, companies must decide which camp they fall into. Will they reduce numbers to a skeleton staff, cut budgets and spend only on specific skills and roles? Or will they choose to embrace a new employee contract, investing in people and training and being open to the idea that a great company is still one a worker might leave?