Why do about 50% of employees in the US look for a new job at the same time? How do you deal with it?

In May 2021, organizational psychologist Dr. Anthony C. Klotz coined one of the most important concepts in the modern world of work - "The Great Resignation." A concept that will become a major theme at HR conferences from the US to Australia and back. Dr. Klotz, of the School of Business at the University of Texas, was able to define in 3 simple words a trend that is characteristic of the United States but relevant to the entire West.

In Israel, for example, according to Israel Employment Service, the number of resignations increased between 2012 and 2020 by more than 200%. The growing demands by management, Covid, that was a game-changer, managements with outdated perceptions, and the inability to work (really) remotely are just some of the reasons.

According to Randstad (a Dutch international HR company), about 33% of employees will leave a workplace that conflicts too much with their personal lives, and among Generation Z (ages 20-35) this figure grows to more than 50%.

Not just a letter of resignation: the indirect damages of the resigning employee

Is the great resignation a lateral effect of the coronavirus? In practice, it was “born” before the plague, but no doubt intensified following the dramatic changes in the world of employment in organizations and companies. Especially in the constant search for the "balance" between personal life and the office ("hybrid work").

"Flexibility and health are essential to today's employees," says Dr. Klotz in an interview, adding, "About 63% of job seekers place the work-life balance as a priority in choosing a new job, according to LinkedIn's Global Talent Trends Report for 2022."

The "Great Resignation" is also troubling HR managers around the world because of the effects on the organization before the official resignation letter is submitted. Studies suggest that employees who are about to retire can cause tremendous damage in the “twilight” period of their pre-departure which can last for many months.

An interesting study recently published by Gallup found that nearly 48% (!) of American employees are in a constant “looking for the next opportunity” state. In the following short list we will examine the subject from three aspects:

• What is the "real price" of "big resignation" for businesses?

• Are there any differences between the resigners?

• How can businesses deal with this phenomenon?

From the getgo, we emphasize that the resignations do not come from a particular sector or profession. The great resignation includes all sectors of the economy and is relevant to both service professions and jobs that require special skills and professionalism. It touches on both senior and junior employees and the “smoking gun” is not necessarily the paycheck.

The damages before the resignation

Resignation does not happen in one day. It is preceded by preliminary steps that can cause real damage to the business. Not necessarily out of the employee's desire to hurt, but more out of the psychological circumstances that characterize a person who wants to leave.

The resignation is the last step in a way that has several intermediate steps and in each of them a potential to cause damage. Gallup research found that there are two situations employees can reach before resigning:

• The non-engaged employee - The resigning employee identifies less and less with the organization and its role, and slowly but steadily loses the sense of belonging and connection.

• The actively disengaged employee - The resigning employee is in an intensive search for a new job and he disconnects from the organization at such a level that he develops total indifference and even alienation from the organization and his job.

According to Gallup, both the non-engaged and the actively disengaged employees cause damage that can reach as much as 18% of the value of their annual salary. In simple terms - an organization that employs 500 workers whose average annual salary is about $100K has a  damage potential of about $9M a year.

The mental state of the employee has a sugnificant affect on  the willingness to submit the letter of resignation. Let’s take a look at the issue of wages as an example. A satisfied employee, according to Gallup, will leave only for an improvement of at least 20% in wage conditions. A non-engaged employee (and of course an actively disengaged employee), on the other hand, will settle for the same and even lesser wage conditions.

According to Gallup, non-engaged employees tend to miss 2.5 times more days on sick leave and lose interest in options for advancing or achieving goals. Sometimes they will even give up bonuses and commissions resulting from achievements just “not to be bothrered”.

The great resignation can also have far-reaching consequences. From investing huge resources, money and working hours in recruiting and training new employees, to the "domino" effect of leaving employees who receive "confidence and inspiration" from their resigned friends. Moreover, the presence of non-engaged and actively disengaged employees can have a negative effect on new employees who onboarded into the organization and are in contact with them in one way or another.

How can this phenomenon be dealt with and can it be mitigated?

The great resignation is not unavoidable and can be dealt with effectively. While it is not possible to prevent any resignation and it is clear that there are cases where "it is better to say goodbye", but preliminary steps may soften the blow and prevent "shock waves".

One of the effective tools for preventing the great resignation lies in improving management skills and abilities. An Oracle study on resignations found that more than 50 percent of those resigning explained that their direct manager could have prevented their depurture. This data sharpen the amount of responsibility that lies with managers that work with employees on daily basis.

A good manager understands that her job is not just to "give orders" or "achieve goals". She must know how to keep the employees under her responsibility with support, development, enrichment, promotion options and more. She must fight for them and give them a sense that she "has their backs".

"Employers need to recognize the importance of terms such as personalization of the work experience for each individual employee," says Sander van Nordande, CEO of Randstand. Consistent and focused increase in employee satisfaction from the workplace, their job and what the future holds, is a great way to prevent resignation.

Wages are not everything

It is important to act consistently to increase employee involvement and deepen their sense of belonging. This is to establish a healthy and positive connection to the organization. It is advisable to create high certainty with clear role definitions, workspaces, attention, joint projects and real-time feedback.

Above all, it is crucial to implement informal communication in which the direct manager is really interested and listens to the employee. Both in personal matters and in professional matters.

Paycheck alone cannot keep the employee involved and / or prevent him or her from disengaging. While wages and conditions may improve the employee's feeling or reduce objections, they alone are not enough. Many studies have found that pay is not the biggest consideration in an employee's set of considerations towards his or her workplace.

The Gallup report clearly shows that within 48% of American employees looking for a new job, there are quite a few senior executives and / or high-paid employees. Many of them will also not be content with improving wages within the same organization. Many times this employee will feel that it is offered to her only because she wants to leave. And the offer should have come a long time ago and that the very offer at the present time and in the relevant circumstances is 'too little too late'.

The way to improve employee satisfaction does not just go through the profit line. Employees who find themselves in a situation of "non-engagement" or "active disengagement" express in conversations with them more resentment about direct management skills than about their employment conditions and wage.