By now the topic of the “Great Resignation,” or the “Big Quit,” or the “Great Reshuffling,” or any other name it might go by, is inescapable. Though initially the service sector seemed to be particularly impacted by the trend of workers leaving their jobs for greener pastures, it seems no industry is immune — even pastors are thinking about quitting their jobs in droves.
This tidal wave of Americans quitting their jobs shows no signs of stopping. A record-breaking number of people — 4.5 million, to be precise — walked off the job in November, according to a report from the Bureau of Labor Statistics. That’s about 3% of the workforce quitting their jobs. And hiring numbers also remain quite high. “Accommodations and foods services continues to be a key sector to watch. While job openings decreased in November, hires held steady as quits continued to rise. Hiring remains higher than quits, suggesting that some who quit may be finding better opportunities within the sector,” Elise Gould, a senior economist with the progressive Economic Policy Institute, said. “Hires are on an upswing as quits continue to rise. Workers appear confident to quit their jobs in search of better ones.”
So we know the Great Resignation is happening. But what’s employee attrition’s real cost to businesses today, and what keeps employees retained at organizations? These are the questions that a new report from The Predictive Index seeks to answer.
Why workers leave
In November 2021, The Predictive Index surveyed 326 executives about The Great Resignation. The survey began by asking the following question: “To your best knowledge, what percentage of your workforce quit in the past 6 months?” Across all industries, the average response was 20%. The biggest reason why these workers are leaving, executives revealed, is inflexible work options and hours.
This tracks with experts’ belief that the pandemic has fundamentally altered the relationship between employees and bosses, and the relationship between employees and their work. What once made sense in a work environment now may not, as the pandemic has caused workers to reprioritize. Though workplace flexibility may have once been a nice consideration for workforces, it now seems to be an imperative for retaining talent. “People want to work where, how, when and on what they want,” the report concludes. “If they can’t find that freedom at their current organization, they’ll leave to find it elsewhere.”
Other factors that The Predictive Index found for attrition, according to its survey, were lack of personal/professional development opportunities; stress and/or burnout; lack of belief in the leadership team; and, quite distressingly, physical health was suffering.
The real cost of the Great Resignation
Filling the employment gaps at a company can be difficult to do even under the best of circumstances, but it has hidden costs. The Predictive Index’s survey also attempted to put a dollar amount on this mass work reshuffling. Its researchers asked the following question: “Consider the cost of hiring, onboarding and training your employees. On average, what does an employee resignation cost you?” Based on the weighted averages of its respondents’ answers, the survey found that the average cost of a single resignation is $11,372 per employee. Though this may not seem like a lot, consider that the survey also found that 20% of employees have quit in the past six months. At a 500-person organization, if 100 people leave, this could cost a company nearly $1 million.
On a similar note, 75% of executives surveyed said the Great Resignation has impacted their businesses’ financial stability. Nearly 1 in 4 execs say they don’t feel prepared to lead through the Great Resignation, and 82% of organizations have needed help with talent acquisition and retention over the past year.
The Great Resignation is costing employers more than just talented employees — and adapting to changing worker attitudes and behaviors will be critical to retaining talent as businesses navigate an unpredictable future.