For months, employers have been hearing about the Great Resignation, the term coined for the large number of employees suddenly retiring, quitting, or changing career paths. The Department of Labor has now released numbers for October 2021 showing just how large an impact that the Great Resignation has had. In October 2021, 4.2 million employees left their jobs, which represents 2.8% of the total workforce. This number is near the record 4.4 million employees who left their jobs in September. As a result, estimates suggest that the economy has roughly 5 million more open positions than people seeking to fill them. For employers, understanding why your employees are leaving is critical to retaining as many as possible and, when that is not possible, recruiting new employees to replace them.
Considerations for Retaining Employees
The number of job openings has created a shift in the balance of power between employers and employees. Employees who feel that they are being treated unfairly or that competitors are providing better compensation, benefits, or other terms and conditions of employment are likely to find another opening in the current environment. Employers need to be proactive to ensure that their top talent is not poached by competitors, as studies have shown that making counteroffers to departing employees is, at best, a short-term fix that merely delays the employee’s eventual departure. To ensure this does not occur, employers should review their compensation systems, benefits, and employee handbooks to ensure that what they are offering is competitive to what other employers are offering. Similarly, if you or a competitor are offering sign-on bonuses, consider whether you should also implement retention bonuses tied to continued employment to ensure that employees are not tempted to look elsewhere.
Considerations for Hiring Employees
If you are looking to hire, there are a couple of critical actions employers should take to ensure that you are accessing the widest pool of candidates possible. One of the first things an employer should do, before posting a job, is ensure that the stated requirements of the position are necessary for success. Is a college degree an absolute necessity? How many years of industry experience are truly needed? Are drug tests or background checks excluding candidates? Even the language used in the job advertisement can limit the responses a company receives, as studies have shown that using certain gendered terms can cause potential male or female candidates not to apply. By advertising to the largest possible pool of applicants, employers are more likely to fill vacancies.
The effects of the Great Resignation are not likely to abate any time soon—the employers who thrive will only do so by ensuring that they are retaining and attracting the best possible employees. If you have questions about ways your business can prevent or address the effects of the Great Resignation, please contact Luchansky Law at (410) 522-1020 to set up an appointment with one of our attorneys to discuss how your policies can be structured to meet your company’s goals.