America’s most talented employees in all public and private sectors, from the C-suite to hourly part-timers, are staging what is becoming known as the Great Resignation. Gallup, the global analytics consultancy, used the term in an article that cites the staggering rate, nearly 50%, at which employees are actively looking for new jobs.
Gallup surveyed a sample of those employees between September 2019 and March 2021 and found 74% of the respondents said they are looking for new jobs because they are “not engaged” or “disengaged” at their present positions.
In addition to creating a huge human resources problem throughout the enterprise, that lack of interest and commitment to the job amounts to lost productivity of 18% of an employee’s annual salary. Moreover, because three out of four workers are dissatisfied in their current roles, new hires are likely to work alongside colleagues who have lost interest because they feel poorly managed.
“That’s a self-defeating cycle — and the most effective interrupter is the local manager,” the report says, noting that it takes a 20% salary bump to poach an engaged employee, while the dissatisfied are not leaving because they want more money. Instead, they want a better manager.
The Society of Human Resources Management (SHRM) warns that if human resources managers and executives are not already addressing issues that are driving the Great Resignation — from compensation to workplace engagement — time is short.
“We need to focus on how to extend someone’s tenure as long as possible,” Heidi Pair, the assistant director of the Renaissance Academy, told SHRM’s HR Magazine. “It’s not about reducing turnover, but rather elongating tenure.”
What Is the Cost of Losing an Employee?
Oracle, the global business management solutions provider, says that aside from the roiling impact of the Great Resignation, understanding the risks of employee attrition and implementing effective “human capital management” policies are essential. Retaining top performers is a key to controlling operational costs, maintaining revenue streams, preserving institutional knowledge and improving customer satisfaction.
“Large U.S. businesses lose at least $1 trillion each year due to voluntary employee turnover, much of which exiting workers say their managers or organizations could have prevented,” the Oracle report notes.
In a separate article, Gallup says replacing an employee at the small- and mid-sized enterprise-level ranges from one-half to 200% of the lost employee’s salary.
“A 100-person organization that provides an average salary of $50,000 could have turnover and replacement costs of approximately $660,000 to $2.6 million per year,” Gallup notes.
What Can HR Managers Do to Address the Great Resignation?
While offering competitive compensation and benefits packages is a significant factor in retaining top talent, CIO magazine suggests nine other strategies that HR managers in the highly competitive tech sector should consider. Among them:
- Understand that retention starts with recruiting. Hire employees whose attitudes align with the company culture, outlook, environment and brand identity.
- Engage employees. Address the chief cause of dissatisfaction by training managers to connect more effectively with employees and act meaningfully on their feedback.
- Provide continuing education and clear paths to advancement. Do more than tell your employees they are valued; show them.
- Continue with remote work options. Response to the COVID-19 outbreak decentralized operations and showed that employees could be productive almost anywhere.
- Prepare for turnover. It’s going to happen, regardless of retention strategies. Replacement strategies include being present in educational institutions and professional organizations.
Computerworld magazine says developing and implementing effective HR policies that address employee dissatisfaction in the era of the Great Resignation is a life-and-death issue.
“If you want your business to survive, the only way you can make it is by putting [employees’] concerns and well-being higher than ever,” the article concludes.
How Do HR Professionals Prepare for the New Reality?
To develop the problem-solving and organizational skills necessary to plan and implement policies to address the Great Resignation, many HR professionals are participating in online Master of Business Administration programs, such as the one offered by the University of Illinois Chicago (UIC).
The UIC MBA program focuses on human resources management and prepares graduates for designation as an SHRM Certified Profession (SHRM-CP) through studies in areas that include:
- Organization behavior
- Enterprise strategy
- Talent management
Coursework in the UIC MBA in Human Resource Management online program is identical to that in the curriculum of the UIC Business Liautaud Graduate School, accredited by the Association to Advance Collegiate Schools of Business (AACSB International).
Learn more about University of Illinois Chicago’s online Master of Business Administration with a concentration in Human Resource Management program