Let’s begin with a short story.

Jonathan Caballero, a 27-year-old software developer found himself in a startling position during the pandemic times. At 27 and living through the pandemic, Caballero realized that time was passing by quickly and that he needs to make the most out of it.

He started imagining a life where he preferred to go for a long swim post-work rather than take a long commute back home. So finally, when his employer started calling employees back to the office, Caballero started dreading the long drive and crazy traffic.

At that instant, he realized that he preferred to have a job that offers flexibility and remote working. He started applying for several jobs and instantly landed multiple offers.

This is just one story. There are thousands of stories in the US where people are calling it quits in search of work that offers more flexibility, more money, and more happiness.

The pandemic has altered people’s mindsets dramatically. They are now rethinking what work means to them and how to spend their time.

According to the US Department of Labor, 4 million Americans quit their job in April alone. That’s a huge number!

But why is this happening? And what can be done to minimize it? Keep reading to get to the root problem.

The Great Resignation

Well, it turns out that the pandemic has pushed the US into The Great Resignation. It is a term used to describe the global phenomenon in which people have begun to quit their jobs as their regions emerge from the pandemic.

A survey of 30,000 workers by Microsoft found out that around 41% of people are considering quitting. The number goes up to 54% when Gen-Z is considered alone. Gallup also reported that 48% of the people are looking for new opportunities.

These figures are shocking and alarming. Employee turnover comes at a great cost for organizations. For medium to small enterprises, it is even more devastating. There is an urgent need to address this crisis but before that, it is important to understand the root cause.

Why is The Great Resignation Happening?

There are multiple reasons for The Great Resignation. Listed below are a few of them:


Before the pandemic, people were used to working from desks and even overtime. Many felt that they were unable to strike a work-life balance. Some even yearned to spend more time with family but were unable to do so. Moreover, working from the office meant long commutes. All these reasons lead to physical and mental burnout.

Bossy Mangers

It looks like people have had enough of bossy managers and the pandemic triggered it further. Many employees, seems like, have had toxic relationships with their managers who undervalued them.

Fear of Safety

With the advent of vaccines, the world is gradually emerging out of the pandemic but there is still a long way to go. People are worried about the safety of their families and themselves and are still not ready to resume work from the office. As the fear of getting the virus still hovers over our heads, employees find it comfortable to work from the safety of their homes.

Remote Work

The year 2020 was all about the lockdown and working remotely. Although it was a massive shift and people worldwide found it challenging to make the transition, it changed their perspective to a great extent. Remote work allowed people to reflect on their lives, priorities and what change would they want to bring in their lives. Many found remote work convenient where they were able to give more time to families or take care of old parents. Remote work redefined their purpose in life as a consequence of which employees feel the need to quit their current jobs and look for employers that offer flexibility.

Stressful Job

More than 740,000 people who left their jobs in April belonged to the leisure and hospitality industry. This means working in bars, hotels, restaurants, clubs, theme parks, etc.

Some of the reasons that provoked people to leave this industry are:

  • Increased stress and fatigue due to lesser staff
  • Being underpaid
  • The constant battle with unmasked customers
  • Long working hours that went up to 50-60 hours a week
  • Not being able to spend important occasions with families such as Christmas and Thanksgiving
  • Safety and health concerns

People who worked in the hospitality industry are now sharpening their resumes to find jobs in fields that are easy to manage.

Higher Demand for Mid-Career Employees

A shift to remote work made employers realize that hiring less experienced people will be riskier. This is because these individuals will not have access to in-person training which they would have otherwise. This automatically created demand for mid-career employees between the ages of 35-45. As a consequence, these employees have more openings and options to choose from. They are no longer tied to their employer and have the leverage of seeking new roles.

Data-Driven Approach to Improving Retention

We recommend employers take a data-driven approach to determine the following:

  • How many people are quitting?
  • Which industry has the highest turnover rate?
  • What is the reason for people leaving the company?
  • How to reduce turnover?

Three steps that can help every organization leverage data to improve employee retention are given below:

Quantify the Problem

Begin with quantifying the scope and impact of the problem. The first step is to calculate the retention rate. it is also recommended to calculate your turnover rate resulting from voluntary and involuntary resignations. This will give you clear visibility on the retention problem.

The next step is to gauge which business metrics are impacted by resignations. When employees resign, the remaining team members find themselves in a position where they don’t have the required skills to get the job done. As a result, an organization’s growth and eventually bottom line are affected.

Quantifying the problem gives you a clear picture of the root cause and allows you to take measures to rectify it.

Identify the Root Cause

Now that you have quantified the problem, it’s time to analyze what is causing your employees to quit. List down factors that you think are causing higher resignations. They could be:

  • Compensation
  • Time between promotions
  • Pay raises
  • Tenure
  • Performance
  • Training opportunities

You can also categorize employees based on location, function, and other demographics to gain a better understanding of how retention rates and work experience differ among different employee segments.

By doing so, you know which employees have higher chances of quitting and which employees have a higher chance of staying with the business.

Develop Tailored Retention Programs

The final step for you is to create customized retention programs. These programs should aim to rectify issues that your company has been struggling with. For example, if you find out that people of certain minority groups are resigning, then there is something wrong with the workplace culture. To solve this problem, you can introduce diversity and inclusion activities and encourage everyone in the organization to participate.

Similarly, if you find out that people are quitting because they have to wait longer than usual to receive promotions then maybe it’s time to revise your advancement policies.

It’s an Employees’ Market Thanks to the Great Resignation

There is no denying that it is an employees’ market. There are several job openings with employers looking for the best fit for their businesses. The Labor Department reported 9.3 million job openings recently.

Considering that figure, it is evident that people have more freedom and confidence in the job market. This is one of the reasons why people are not afraid to make bold career moves.

And there’s absolutely nothing wrong with that. Employees have the right to look for work that pays higher, offers learning opportunities, and good quality of life.

However, it means that employers have to compete with other employers by offering attractive incentives to hire top talent and there is nothing wrong with this. In fact, competition is healthy as it encourages employers to offer better incentives. This means a better quality of life and well-being for both the employer and employee.

Unemployment > Minimum Wage

We cannot totally blame market incentives and employee demand for The Great Resignation. In fact, it has also been fueled by government policies that have been there for over a year now.

The federal government continues to give unemployment benefits to people despite businesses shutting down and the economy crumbling. The workforce, in return, people have acted in the most predictable way as a result of receiving unemployment benefits. They have preferred to sit home and make more money than what they were actually earning when employed.

If this situation continues to prevail and the government does nothing to alter these policies, The Great Resignation will diffuse more into the economy. Demand for goods will continue to rise but a lack of supply and resources will increase the prices further.

Key Takeaway

The pandemic has made people realize that work has to accommodate life and not the other way round which was the case previously.

Employees want to work for employers who encourage transparency and truly care about their workforce. Their care goes beyond getting a ping-pong table and a fridge full of energy drinks. True leaders support and help their people navigate their way in this new strange world. Moreover, employees are in search of leaders who understand the need to communicate more in this Zoom intense world and offer the necessary flexibility. This also means that leaders now should know that micromanaging will not work and doing it will only increase The Great Resignation.

As an employer, you now know what the problem is and how to fix it. Take inspiration from some of the tips we suggested along with adding your own. The results are not going to show up instantly but they will, gradually.