Our organization spends lots of time on the road with the organizations we support, and when the pandemic began accelerating last February/March, we were reluctantly forced home. But not for long. Eighty-eight days after suspending travel, we were back at it and have been jetting about the country at a pace we haven’t experienced in a very long time.
During those early days of renewed travel, it was a challenge to find flights that met our scheduling requirements, to find someplace to eat, and to enjoy the hotel services (e.g., housekeeping, breakfast buffets, etc.) we’d come to appreciate. We understood. The workforce was still reeling, doing what they could to protect themselves and their families from illness while their employers were working to hold on. While things have eased substantially, pre-pandemic products and services have not fully recovered, and I’ll bet none of you can spend more than an hour or two around commercial businesses and not see a “we’re hiring” or “help wanted” sign.
As it began to appear that the workforce may not get back to work anytime soon, the “usual suspects,” Harvard Business, MIT Sloan, McKinsey, Korn-Ferry, and others transitioned their focus from the “blended workforce” and working from home (it’s an acronym now – WFH [how creative]) to “the Great Resignation.” And they can’t stop talking about it.
To our minds, that’s the problem these days. Lots of talk and little to no action. Frankly, we’re tired of it. If you’re persuaded that the workforce may not fully return to work anytime soon (we are), and you have some sense for what’s behind that trend (we do), then it would seem we should be developing solutions (we aren’t).
So, let’s revisit the challenge and finally start talking about what leaders should do in response.
The Great Resignation (the challenge). On October 18, the U.S. Bureau of Labor Statistics reported a cumulative, 2021 non-farming quit rate of 20.8%. That’s an average of 2.6% per month, the highest since the Bureau began keeping these statistics (over the previous 20 years the average quit rate was 1.92%). Certainly, you’re interested in the financial and professional/business services data, but your organizations finance entities across the spectrum, meaning that although you may be struggling to retain your workforce, so are your customers.
Scarier still is the trend since 2009 (the lowest quit rate recorded). Excepting 2020, the data shows an increasing trend in America’s workers leaving their employers (see Figure 1).
A 600-employee manufacturing organization we know cannot fully man its 10 facilities, meaning that the business they’ve worked hard to acquire over the last several months in an incredibly competitive industry is in jeopardy. Challenged to meet production quotas and fulfill orders, it seems only a matter of time until those customers pull their business and move to other suppliers who’re most effectively addressing The Great Resignation.
True, these data capture Baby Boomer exodus from the workforce and that, too, has accelerated over the past few months. Pew Research Center shared that “28.6 million Baby Boomers…reported that they were out of the labor force due to retirement” in 2020’s third quarter. Further, the younger generation is slower to enter the workforce than previous generations.
But whether this is a post-pandemic or more substantive, decade-in-the-making challenge is irrelevant. Organizations are understaffed and, therefore, challenged to do what they’re in business to do. “Houston, we have a problem.”
Flea Market? What makes you say that? Setting aside Boomers for the moment, what the Bureau doesn’t capture with their quit-rate data is where all those individuals are going. McKinsey recently highlighted a Bankrate survey indicating that “more than half of the American workforce will probably try to find a new job within the next 12 months.” Gallup reports 48%. A separate McKinsey report indicated that “40% of employees stated that they are at least somewhat likely to leave their current job in the next 3-6 months.” Exodus, no. Migration, yes.