A few years ago, no one could have imagined the current labor market. COVID-19 continues to shape job seeker and worker behavior in surprising ways.
The most recent employment report from the Bureau of Labor Statistics showed that the coronavirus remains a threat to a strong and sustained labor market recovery. Meanwhile, the supply of jobless workers currently looking for a job is well outstripped by employer demand: In July there were 83 unemployed workers for every 100 job openings — a ratio last seen in December 2019.
And to make matters still more complicated, millions of Americans are quitting their jobs each month, resulting in what some experts are calling the Great Resignation. But is this media hype, a passing fad or a sign of what lies ahead?
To find out, Indeed surveyed 750 recruiters, managers and decision makers from diverse industries across the U.S. The results are sobering: Employers overwhelmingly find that this is a challenging time to hire and retain workers. Here, we share what they’ve seen, what they think is causing the Great Resignation and how they hope to attract and retain talent in these unprecedented times.
41% of employers worry resignations will remain high for now
No doubt about it, the Great Resignation is a real and present issue for the majority of employers. Although 26% dismiss it as hype, the remaining 74% say otherwise.
In fact, 41% fear that resignations will remain high well into the future, and over half (51%) believe the current resignation trend poses a problem for the economy overall.
Our data indicate that the impact varies by industry. Few sectors have been more affected by the pandemic than hospitality and tourism, and here we find that only 4% of respondents say that the Great Resignation is hype, while over half (56%) worry it will be a long-term trend.
In fact, many employers are concerned about their particular sectors. Some 37% say the Great Resignation will be an ongoing problem for their industries, while slightly fewer (33%) worry about long-term implications for their current employers.
And these aren’t abstract issues: 70% of employers have observed a recent uptick in resignations at their workplaces (the number jumps to 80% for those in the hospitality and tourism sector). Similarly, 73% feel they are struggling to hire and retain workers, and only 5% are experiencing the opposite.
The recruiters, decision makers and managers we surveyed were not simply reporting what they had observed, however. The respondents themselves were part of the trend: Only 39% are not or have not personally considered resigning!
It’s little wonder, then, that our data show that 72% of employers are more concerned with resignations than usual, and 70% report more discussions about these struggles.
But acknowledging the problem is only the first step. In order to find meaningful solutions, employers must first understand the root causes of these departures.
85% of employers say COVID-19 altered definitions of a good job
Nearly all (89%) employers believe the Great Resignation is being driven by changing attitudes toward work, and for most, this goes back to the far-reaching impact of COVID-19.
Workers now must consider their physical health when weighing an opportunity in sectors where this wasn’t a factor just a few years ago. It follows, then, that 55% of respondents believe fears related to the novel coronavirus are the top cause of their current hiring struggles.
Understanding the full picture, however, requires a closer look at the pandemic’s psychological and emotional impact.
Most employers surveyed (88%) agree that the pandemic led workers and job seekers to rethink their career and work priorities, which aligns with the argument that the Great Resignation is actually a Great Reassessment.
In fact, 85% of employers agree that the pandemic has altered beliefs about what constitutes a good job — and the number rises to 96% of respondents in hospitality and tourism.
Employers believe workers’ top five priorities are higher pay (59%), schedule flexibility (58%), better work-life balance (56%), remote work options (54%) and the ability to focus on personal and family responsibilities (50%).
76% of employers say resignations are contagious
Amid the rising tide of departures, 86% of respondents believe employers need to take action now to reduce further churn. And 76% of employers agree that once a few employees resign, others typically follow. The challenges, meanwhile, are exacerbated by the difficulty of attracting new hires at the given moment.
To reduce their risk, some employers are taking action to keep employees from leaving. The three most popular measures are offering full- or part-time remote options (52%), flexible schedules (50%) and bonuses (46%).
Here, we find different approaches depending on the industry. More tech companies now provide flexible or remote work options (62% each) over other perks in their efforts to retain workers. In contrast, hospitality and tourism employers are more likely to offer raises (69%) and bonuses (63%) to dissuade resignations.
Overall, when asked about the number-one thing they should do to hold onto workers, the largest proportion of employers (43%) believe a pay raise would reap big benefits.
When it comes to bringing in new talent, many employers have implemented measures such as flexible schedules (57%) and hiring bonuses (51%) to attract job seekers.
In addition, 51% are exploring new ways to find talent, while half now offer or have increased bonuses for employee referrals. All told, a mere 6% have not changed how they hire!
86% of employers say they should be more worried about resignation now than in past
The pandemic has upended many facets of life, and the job market is no exception. The current situation caught a small majority of employers off guard: 54% say they are surprised by the tight labor market and corresponding advantages for job seekers.
But the majority (86%) agree that employers should be more concerned about resignations now than in the past — the number jumps to an alarming 95% for employers in tech and 94% in retail.
While the Great Resignation is likely part of a seismic shift in the world of work, employers aren’t off the hook.
Strikingly, 51% percent of those surveyed believe their companies’ handling of the pandemic resulted in later resignations, and the number jumps to 64% in hospitality and tourism. And, somewhat troublingly, a majority agree that company leaders (69%) and talent professionals (63%) are out of touch with what workers and job seekers want.
The Great Resignation poses real risks, but employers are taking action
The Great Resignation isn’t just media hype — employers are feeling the crunch with both hiring and retaining workers. The majority of employers surveyed believe that the pandemic not only shifted workers’ priorities and preferences about work but fundamentally altered ideas of what constitutes a good job.
The good news is that although we may not be able to control the virus, employers are able to take steps to remain competitive.
- Today people want to feel safe, so any measures an employer is taking to provide enhanced safety should be promoted widely both internally and to prospective candidates through job postings and incorporated into employer brand strategies.
- Increased flexibility may be moving from a nice-to-have to an expectation for some workers, so when possible, employers should consider implementing measures like flexible schedules and enhanced remote-work options to attract new hires and dissuade current employees from leaving.
- When it comes to replacing those who have already left, hiring incentives may be an option. Indeed data show that the share of job postings advertising hiring incentives, such as signing bonuses, retention bonuses and cash incentives, have doubled since last July. Employers with the means to do so might consider using this strategy.
- Finally, anything extra that employers provide should also be highlighted in job postings. These can include things like paid time off, transportation subsidies, free food and drinks, fitness and wellness perks or stipends and reimbursements.
How long will these hiring and retention woes last? It’s too soon to tell. Amid many unknowns, what we can say for sure is that the Great Resignation is real, it’s upon us and, according to most employers, it’s time to take action.
Article By: Liz Lewis at indeed.com