It has been a tough three years for U.S. employers. The first sign of trouble was COVID making it to our shores. Subsequent lockdowns and work-from-home directives changed the American workplace. In their aftermath came the Great Resignation. Then came the Great Attrition and, finally, what is being termed the ‘Great Renegotiation’.
Business experts have been talking about the Great Attrition and Great Renegotiation since the start of the year. Some say all three phenomena are one in the same. Others say they are separate and distinct entities. Regardless, today’s workplace is a lot different compared to the pre-COVID workplace.
The Great Resignation began in the summer of 2020 as COVID restrictions were being relaxed and employers started calling people back to work. But many employees, having reevaluated their lives during shutdowns, did not want to go back. They began quitting by the millions.
Dallas-based BenefitMall was among the many companies involved in the HR and benefits space that spent considerable time talking about the Great Resignation. They encouraged everyone from business owners to benefits brokers to try to understand a new way of thinking emerging in the American workforce. Some heeded the advice, others did not.
Some who quit their jobs at the start of the Great Resignation went on to start their own businesses or jump into the gig economy. But others looked for new jobs offering the compensation and benefits they wanted. Thus, the Great Resignation became the Great Attrition.
Employers were faced with the very real prospect of losing their top talent. At the same time, they could tap into the pool of recent quitters by offering all sorts of concessions. Those concessions included benefits that went beyond traditional health insurance and 401(k) plans.
Retention was suddenly the highest priority in the HR department. Companies came to realize that employees were in the driver’s seat. That meant being willing to meet employee demands in order to improve retention rates. Once employers came to that realization, the Great Attrition became the Great Renegotiation.
Retention is as important to HR departments today as it was two years ago. Why? Because an average of 4 million people per month quit their jobs in 2022. We will not know 2023 numbers until early 2024, but it is hard to imagine they are significantly lower – if they are lower at all.
The new reality is that employees are no longer willing to work under pre-COVID arrangements. They are no longer content to feel like they are owned by their jobs. If nothing else, COVID made it abundantly clear that there are other things in life equally important to earning a paycheck and paying the bills.
If someone asked your thoughts on the top reason people quit their jobs, would your response be the desire for better pay? That is what most people think. And in fact, a March 2022 survey from Pew indicated as much. But that was last year. A 2023 survey conducted by a career development platform known as The Muse points to not feeling valued.
Approximately 34% of the survey respondents said their desire to find a new job was due to work environments considered unsupportive and unhealthy. If you prefer the vernacular, think toxic work environments.
Regardless of why people leave their jobs, they are still doing so in droves. What started as the Great Resignation has become the Great Renegotiation. Employers need to face this new reality, or they will continue struggling to retain top talent.