How You Can Address “The Great Resignation” with Total Rewards

Your chair is empty. Did you strike out for greener pastures in 2021? Did you say safety-net-be-damned and leave your job without another lined up? If so, you’re not alone. ‘Empty chairs’ was not merely a theme of the work from home experience of 2020, but a phenomenon of this current moment dubbed, “The Great Resignation.” After what was a challenging year for many, millions of employees left their jobs in a just a few months’ time, leaving employers to ask, “What just happened?!”

“The Great Resignation” was a term coined by Texas A & M management professor, Anthony Klotz. Klotz’ theory was that there was pent up demand for job movement. Through experience and talking to a wide range of employees, he concluded that through the uncertainty of the pandemic, so many had worked with heads down, that there would be an explosion of movement as the public health crisis abated. Klotz shared the term “The Great Resignation” in an interview with Bloomberg, and from there the idea and turn of phrase caught a head of steam, was shared and reshared in social media and other media outlets and became part of the lexicon among those who follow business and employment trends.

We believe the phenomenon, in various forms, is real even if the turn of phrase may have a hint of dramatization to it. Maybe that’s its power. The pandemic did throw standard operating procedures for a loop as people cleared out of offices for months at a time. I think it’s imperative that we help employers who are looking to snap back from this disruption by continuing to examine the causes of The Great Resignation and discuss how they can reassess compensation strategy and benefits strategy to match up with employee desires within this new reality.

The Great Resignation in Practice

A Forbes article published in late July of 2021 cites U.S. Labor Department numbers from April 2021 in which a record four million workers quit. It’s not everywhere. Some industries have survived, held course and even thrived during the pandemic. Of course, the service industry took a hit. And for multiple reasons, women were especially affected by the turbulence and change. Although more parents worked from home, many also experienced increased demands of caring for and schooling kids at home or elderly parents. Some cited the ‘always on’ culture of work from home and survival mode as leading to burnout. In my mind the “resignation” represents something broader in scope.

Not everyone left their jobs. But, for those who did or are considering, their total rewards package – compensation and benefits – was a factor. The idea or concept of The Great Resignation captures the moment and, I think provides motivation for employers. It highlights the widespread employee restlessness – as many as a third expressing intent to find another job if pulled back to the office in a recent survey from Bank of America. Of course, surveys are not action and it’s not all doom and gloom for employers. But with this idea of The Great Resignation as a framework, we can see how employee sentiment has shifted and adjust our strategies accordingly. There are lessons and takeaways.

Employees are Rethinking Work

Whether it was the tumult of the year, or the extra time afforded some during the pandemic, millions of employees were reflecting on what it meant to work and how work fit into their daily lives. With hybrid and work from home arrangements going mainstream, many employees reconsidered the mechanics of work. What once seemed like a luxury – flexible work arrangements or full-time working from home – now seemed like a key and truly valued component of work structure and the total compensation and benefits package within a modern organizational setting.

Employers should note, though. It’s not just the mechanics of working from an office versus hybrid/work from home. For many, it’s been deeper than that. Employees are conscious of the need for mental well-being and taking time to consider the more spiritual elements of work with questions like, “Is that :45-minute commute really my ‘me-time’ or, “Is it time to move back to be close to family?”, as this June report from NPR relates. The pandemic, in part, led more people to think about work-from-home beyond the cliché of working at home in slippers and pajamas. The experience of 2020-2021, in its totality, must lead employers to think more deeply about the value of work and how work itself is part of the compensation package.

Employers Must Tighten Relationships

If there’s one urgent demand upon employers that we’re seeing right now, it’s a strong inward look to that relationship between the employee and employer. And, that includes the entire life cycle of employment, from recruitment, to employment, to “alumni” status. Even in exiting, employers need to ask if that experience is good for employees. They may come back! For an employer, it’s crucial to build and maintain those relationships in a way that supports their organizational culture, through the ebbs and flows of the economy and the individual lives of employees.

Listening is key. A client of ours, a mid-size energy company, recognized shifts in attitudes amongst their own employees and their candidates for employment. The company wanted to acknowledge the shift in attitudes and desires specifically for hybrid and flexible work, while maintaining a cohesive culture they saw as a competitive advantage. We helped them develop an intentional approach to a hybrid workplace. The intentional approach provided guidelines for meetings, days in/days out and provided accountability of the employees to each other. Because of its intentionality, employees have come to see it as a benefit.

Four Steps You Can Take

There is still some flux out there from a public health perspective. Fingers crossed, we’ll regain our collective balance and take some of that out of the picture. As you plan your compensation and benefits packages and incorporate new ideas, here are some points to consider:

  1. Look forward. Listen to your job candidates. They will be the ones to replenish and renew your workforce. What do they value? Are there structures in place within your organization to accommodate them?
  2. Examine your compensation and benefits holistically. What is happening in the workplace relative to mental well-being, hybrid work arrangements, and diversity and inclusion? We see widespread impacts on these issues and opportunity for the best workplaces to adjust compensation and benefits accordingly with a renewed focus on total rewards.
  3. Take a consultative approach. A tech client of ours developed a well-being component within their compensation package with dollars that can be applied to a wide range of benefits including gym membership, childcare and more. This is one way of meeting employees where they are and giving them agency in how they are compensated outside of salary.
  4. Stretch. Be vulnerable. In our workplace and with the clients we work with, we strive to create an environment of empathy. We will all be working in an environment that is more diverse in gender, race, ethnicity and a host of other factors. How do we open ourselves to learning about each other and helping each other thrive?

The Great Resignation accelerated some of the practices that were evolving in compensation and benefits. The urgency of the moment has created an opportunity for organizations to step back, examine processes and reconnect with employees in a meaningful way. I encourage leaders in management and human resources to seize it!

If you’re looking to make some adjustments to your total rewards strategies to mitigate potential talent challenges, feel free to drop me a note or reach out on LinkedIn. I’d love to help! You can also reach out to a member of our advisory team or tweet at us with your questions and concerns.

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