The Big, Big Reshuffle?
How the pieces are positioned across the Great Employment Chessboard in 2021-22
Sometimes, it pays to take a step back from the hustle and bustle of daily life — the hiring drives, sifting through resumes, reviewing results, planning for next year — and reflect on happenings in the marketplace. Innocuous shifts today could signal tectonic movements down the road. We may be caught up in the eye of a storm and mistake the calm for smooth seas ahead.
As 2021 ages and a fresh, new year makes its way onto the calendar peg on the wall, it’s time to look back on the year gone by and sift through the tea leaves to ponder: what’s up ahead?
For recruitment specialists and HR leaders, we’re in one such moment today. Put aside the recruitment platforms and video interview tools for a minute. Pause the campus drives you’re planning for a bit. The pandemic is waning — or is it? What does it all mean for the recruitment industry?
“Over the past year, no area has undergone more rapid transformation than the way we work. Employee expectations are changing, and we will need to define productivity much more broadly — inclusive of collaboration, learning, and wellbeing to drive career advancement for every worker, including frontline and knowledge workers, as well as for new graduates and those who are in the workforce today. All this needs to be done with flexibility in when, where, and how people work.”
Satya Nadella, CEO at Microsoft. Microsoft’s Work Trend Index reports that 41 per cent of the worldwide workforce are considering a job change in the next year, and 46 per cent are planning a ‘major career transition’.
As per the US Bureau of Labor and Statistics1, four million people tendered their resignations in July 2021, underscoring the ‘Great Resignation’ idea proposed by Prof Anothony Klotz of Texas A&M University. Harvard Business Review notes, “…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 July2.” The attrition has been particularly severe in the technology and healthcare industries, and most felt in the middle management tier.
Source: The New Indian Express, Nov 20213
Closer home in India, tech services giants Wipro, Infosys and Tech Mahindra have experienced attrition rates of over 20 per cent for the quarter ending September 2021, a big jump from previous quarters. In fact, the numbers are probably starker in India than globally: Microsoft’s 2021 Work Trend Index reports that a whopping 62 per cent of the Indian workforce has contemplated calling it quits this year, compared to 41 per cent globally.
“Our customers are seeing double-digit attrition numbers and they’re looking to partners like us. They are also automating a lot of things because of the shortage of labour. All these three things put together are creating a need for more tech services and jobs.”
– Sanjay Jalona, L&T Infotech. [Attrition rate: 19.6 per cent]
Why the Big Quit?
The writing has been plain on the wall for a while now: We’re in a talent crisis, precipitated by the pandemic. As industry insiders, analysts and HR leaders attempt to dissent the reasons why, some clear patterns have emerged:
- Globally, employees are burned out4, particularly those working remotely. HBR found that quit rates were higher among employees who were in roles that had experienced heavy workloads during the pandemic. This is probably healthcare (uptick of 3.6 per cent in resignations) and technology (increase of 4.5 per cent).
- Some sneer6 that this is a phenomenon brought on by millennials who have never experienced hardship before. But the pervasive feeling of gloom and doom brought on by the pandemic has acted as a forcing function for many.
- Even mid-career professionals (especially mid-career professionals) are beginning to question if the fat paypacket is worth it if they’re stuck in traffic for two hours a day and shuttle between a tiny apartment and tinier cubicle. HBR estimates that employees between ages 30 and 45 have demonstrated the greatest increases in resignation rates.
The forced ‘WFH’ has given the time for many to contemplate: Hometown or city? Suburbia or central business district? Traffic, noise and pollution in urban isolation over serene surroundings closer to family? The lure of the hometown or the suburb has been irresistible for many: PwC estimates7 that almost a quarter of all employees are planning (or implementing) moves 50 or more miles away from an office location. Anecdotal evidence in Indian companies suggests that many employees have opted to go ‘complete hometown’, taken pay cuts to permanently settle in their ‘native’ and work in the same roles.
One thought that is driving this mid-career phenomenon is that companies may have become averse to hiring less-experienced candidates, as they prefer more experienced and trained personnel working remotely. This is evidenced by the dip in attrition among younger workers. This move by companies has resulted in higher leverage for mid-career professionals, giving them more choices and opportunities to explore.
- The move to completely remote work — particularly for knowledge workers — has closed the hallway conversations and coffee-break-time chats. The feeling of meaningful connection with a team is lessened, making it easier to evaluate other jobs or openings.
- Remote job openings have quintupled, as per some estimates. While hiring managers may rejoice that their talent pool has opened up, the flip side of the equation is that the number of companies accepting remote work as the norm has increased too, leading to more competition.
- There are many untold, hidden stories in the numbers: a record three million women have dropped out of the workforce8 in the US during the COVID crisis, underscoring the ongoing childcare and eldercare crisis that the country is facing. In India, media reports note9 that the Labour Participation Ratio (LPR) is at an all-time low of 42 per cent – meaning close to 60 per cent of employable people are just not looking for work.
67 per cent of all employees opine that burnout has worsened during the pandemic. Employee Burnout Report: COVID-19’s Impact and 3 Strategies to Curb It, Indeed.com5
A Data-Driven Plan to Combat the Big Quit
Now that we know that the ‘Great Resignation’ is indeed happening, what can hiring managers and recruiters do to navigate this movement? How are HR leaders to meet recruitment targets and ensure that their greatest assets, namely, people, are supported?
Industry specialists at HirePro have put together a three-step plan, backed by our analysis of happenings, that may serve as a foundation for recruiters:
- 1. Be data driven
- Recognise the trends in your particular industry. While healthcare and tech have experienced upticks in their attrition numbers (20%+), manufacturing and BFSI (18%) have been relatively better off10. Do your due diligence to determine whether the problem exists.
- Identify the retention rate in your company. Benchmark it against historic rates. HBR recommends the following formula for retention rate calculation:
Turnover Rate = Number of Separations per Year ÷ Average Total Number of Employees
Determine the rate per quarter for 2021, and check it against rates for pre-pandemic years.
- Seek out WFH employees (past and present) and perform qualitative research to find issues.
Interviews with current remote employees, as well as with employees who may have quit over the last year, may elicit key insights.
Despite the support companies are giving employees, many still feel burned out and unsupported by the employer for reasons big and small — from inadequate internet connectivity to being online for longer hours. Find the reasons.
- Quantitative surveys of employee satisfaction may bring more insights. Now may be a good time to send out an employee satisfaction survey to your pool of talent. A simple but rigorous survey can elicit feedback that can drive your planning for 2022 and beyond.
- Evaluate if complete WFH may work for your teams (with possible pay cuts). Support remote workers with the tools and technologies they need to stay productive. Many companies, especially the small and medium ones, have gone completely virtual, offering a new way of living and working to everyone in the organisation.
- Combat employee ennui with reskilling and upskilling initiatives. Evaluate if paid time off will help — time dedicated to reskilling and reorienting to new career paths or volunteering. Your highly skilled mid-level employees are valuable. Find out what it takes to help them navigate the new normal.
- Build F2F meets and events into the 2022 calendar to foster team spirit. Establish a cadence of face-to-face meetings, whether weekly, monthly, or quarterly; they can serve as the elixir of personal connect that many are hungry for.
- Keep an eye on pandemic developments and evaluate when the time is right for return to office, complete or partial. Work with your CxO suite on a long-term strategy for the company. Many factors such as productivity, costs and customer demands come into play for this conversation. Several large orgs in India, such as CapGemini, have started return-to-work initiatives.
The data will indicate whether the problem is real in your company. If it is, it is time to go to the source — your employees.
2. Identify root causes
3. Develop retention strategies that work for your organisation
HR leaders are evaluating and building a panoply of strategies to support employees through 2022. Here are some suggestions.
I would expect to see a post pandemic work organization as one that moves away from a one-size-fits-all approach towards one that allows individual and asynchronous organisation of work and work settings.
Professor Dr. Isabell Welpe, Organizational Researcher at the Technical University of Munich.
Going forward, not all roles need to be all remote all the time. Conversely, not all roles need to be all office all the time either. The hybrid workplace is well and truly here to stay. The onus will be on the HR leader to build a supportive, productive workplace with a framework of policy, technology and adroit planning that supports the organisation’s strategic objectives.
HR leaders who recognise the movements across the great employment chessboard and plan proactively can build this workplace, converting the ‘Big Quit’ to the ‘Big Reshuffle’.