Recruiting and retaining quality employees is a top priority for most companies and, in today’s environment, staffing is challenging.
“Very few companies are not having difficulty recruiting right now,” said Steve Lowisz, CEO for Qualigence International, a talent acquisition and recruiting research firm.
As of August 2022. the U.S. Bureau of Labor Statistics reports 10.1 million job openings, down from 11.2 the previous month. With the number of separations at 6 million, this leaves a shortfall of 4.1 million workers. In other words, there are about 1.7 jobs for every worker.
While job openings did decrease, so did the number of workers voluntarily leaving their jobs, compared to July 2022. According to a report by CNBC, that’s an indication that it’s still an employee job market.
Kerry Ebersole Singh, executive vice president and chief talent solutions officer for the Michigan Economic Development Corporation, agreed.
“We are in an employee-driven market,” she said. “For now, employees have the negotiating power.”
Let’s investigate three key phenomena influencing companies’ ability to recruit and retain employees in today’s market: the Great Resignation, quiet quitters and boomerangers.
The Great Resignation and other Rs
The Great Resignation, a term first coined in May 2021 by Texas A&M University professor Anthony Klotz, involved a record number of employees across multiple industries voluntarily leaving their jobs in the summer and fall of 2021. According to the U.S. Bureau of Labor Statistics, November 2021 saw 4.5 million people quit, the highest level ever recorded. A total of 47.8 million people left their jobs in 2021.
The pandemic exacerbated this mass exodus, but it also resulted from already-brewing conditions Harvard Business Review calls the five Rs. These include retirements and very few relocations. People were reconsidering their work life and roles, and reshuffling among industries. There was also some reluctance to return to in-person work because of the pandemic.
The period just before the pandemic saw a gradual uptick in resignations through 2019. Uncertainty about jobs during the pandemic showed a dip in resignations in 2020, and then 2021 showed the highest level ever recorded. Many of those can be attributed to the pandemic, stimulus checks and the like, but that number also included employees who would have left their jobs in 2020 if not for the pandemic.
As reported in a February 2022 Pew Research Center survey, reasons employees resigned in 2021 were mostly related to pay and work conditions.
Respondents cited low pay (63%), a lack of advancement opportunities (63%) and feeling disrespected at work (57%) as reasons for departure. Also high on the list were childcare issues (48%), lack of flexibility in scheduling (45%) and lack of good benefits like paid time off and health care (43%).
Ebersole Singh called the Great Resignation “the great redesign.” The pandemic caused people to evaluate their work-life balance and therefore redesign how they work. Generational differences in work expectations also contribute to this redesign, she said. “Generation Z has different expectations. They want to have a life outside work.”
The Great Resignation is not necessarily over. Bureau of Labor and Statistics data shows the number of people quitting their jobs at similar levels from August 2021 to August 2022 and up 100,000 from July 2022. A March 2022 PwC Global Workforce survey showed one in five employees were extremely or very likely to leave their current positions in the next year.
A McKinsey & Company survey conducted around the same time showed 40 percent of global workers at least somewhat likely to leave their jobs in the next three to six months. The study identifies more Rs that factor into resignations. In addition to the already-mentioned reshuffling, as employees (48% of those in the survey) move to different industries, employees are also reinventing their work lives, with many opting for part-time or temporary, instead of traditional full-time work.
McKinsey & Company’s final R is reassessing. Some people are quitting to care for children, elders or themselves. They’re leaving the workforce, which shrinks the available talent pool.
Ebersole Singh indicated that 130,000 women have left and not returned to the workforce in Michigan alone. Some employers are looking at onsite childcare and other childcare incentives to recruit these women, she said. It’s one tool companies can use in talent acquisition.
Greener pastures, remote workers
In short, the current job market is an environment where employees are not looking for long-term employment, said Lowisz. “There are too many options. They go where the grass is greener.”
Lowisz also mentioned remote work as a factor keeping resignations high. It provides more choices, since workers don’t always have to relocate. However, remote workers can feel isolated, and they may not feel as engaged in their work as onsite employees do.
“It’s not for everybody,” he said, noting that he’s seeing a shift in employer attitudes toward remote work. “We’re seeing employers terminate remote employees in order to hire locally.”
Ebersole Singh sees remote work in future job markets. “The short answer is, it’s here to stay,” she said. “Employees want that flexibility of remote and hybrid models.”
She said finding ways to connect with remote workers is also important. “Employers and employees need to revitalize their relationship. We have to look at how to plan a team schedule around strategic priorities.”
The Great Resignation is also driving up the cost of recruitment, Lowisz explained. Employers need to add perks and benefits, not to mention pay, and also to rebrand their companies as great places to work.
Lowisz said one of the biggest mistakes companies make in branding is advertising who they would like to become as who they are today. “That hurts companies more than anything,” he said, because employees learn the truth quickly and tell others. Instead, he advised that companies advertise what they aspire to be and say that they need the right people to help them get there.
Getting the right leaders, knowing what drives your people and encouraging your team to talk about the benefits of working for your company are also important recruitment tools, according to Lowisz.
What about those employees who haven’t resigned, but instead have decided not to work so hard? Part of a shift in attitudes toward work, this so-called “quiet quitters” movement — a term coined in a March 2022 TikTok video — is really a new name for disengagement, Lowisz said. It’s also known as withdrawal or burnout.
Lowisz noted that the “quiet quitters” term has created a bandwagon effect, with some employees deciding to stop giving their all because they know they can afford to in the current job market. It’s also a misnomer, he said, as these employees telegraph their quitting through social withdrawal, apathetic attitudes and decreased communication.
According to a Gallup survey, at least 50% of U.S. workers fall into the “quiet quitters” category through June 2022. By Gallup’s definition, they’re disengaged — psychologically detached from their work and set on doing the minimum required of them. The data also indicates that 32% are engaged in their work — a figure that’s held relatively steady from 2021 — and that 18% are actively disengaged.
“Actively disengaged is, ‘I don’t want to work here, you shouldn’t either, and here are the 18 reasons why,’” Lowisz explained. These are the people who can cause the most damage to an organization’s reputation.
Quiet quitters are at the highest risk for layoffs once the market changes, warned Kane Carpenter, director of marketing, for JMJ Phillip Executive Search, a global search firm specializing in manufacturing, supply chain and technology sectors.
“Quiet quitters aren’t job hoppers,” he said. They’ll mostly likely stay put until they’re let go in the next round of layoffs.
Lowisz issued the same warning to these coasters: “As soon as companies can afford to fire those employees, they will. They’re going to weed out quiet quitters.”
On the flip side, said Lowisz, companies need to be careful how they handle layoffs. Treating employees unfairly breeds a bad reputation, which can hurt companies when they need to attract workers.
The practice of “quiet firing” — treating employees poorly with an aim of getting them to quit — is the wrong approach, he said. Increasing employees’ workload but not their pay, reducing their hours, canceling performance reviews and passing over them for promotions are all signs of quiet firing. It can be passive — like not returning phone calls or emails — or aggressive — like berating an employee in front of coworkers.
These practices not only create a toxic work culture that’s difficult to change, but damage a company’s reputation, which can affect its bottom line and its ability to recruit.
In August 2022, Harvard Business Review reported a strong correlation between subpar leadership and motivation to work. Analysts from leadership development consultant company Zenger Folkman studied 13,000 employee reviews of their managers. Employees rated their managers on “balancing getting results with concern for others’ needs” and whether their “work environment is a place where people want to go the extra mile.”
Findings showed that 62% of employees who worked directly for managers rated highly on balancing relationships were willing to go the extra mile at work. Conversely, the lowest rated managers were three to four times more likely to have quiet quitters on staff. Only 20% of their direct reports were willing to put in extra effort, and 14% were quiet quitters.
Ebersole Singh echoed this study’s findings.
“There are no quiet quitters; there are only bad managers,” she said. “When a person is quietly quitting, there’s a disconnect with why their work matters. Employees want to feel valued. Quiet quitters, for the most part, do not feel valued.”
The solution? “Managers must connect the work to the company’s vision and mission,” Ebersole Singh said. In other words, they must find ways to make employees feel valued and their work purposeful.
Lowisz agreed, citing the need for leadership development to create “real leaders, not managers.” Leaders must stay engaged with their team members — especially when they’re working remotely, he said. They should also set clear and measurable work expectations, with ongoing feedback, and work to understand what motivates each person on their team.
An August 2022 ResumeBuilder.com survey provides hope for turning quiet quitters into more productive employees. It found that 26% of American employees were doing the bare minimum of what they’re paid to do, or even less. Some 80% of these employees said they were burned out. However, 91% of them said they could be motivated to work harder. Top incentives included more money (75%), more paid time off (48%) and better health care (40%).
One potentially untapped pool of workers lies in alumni — those employees who’ve already worked for your company and might be ready to return. Depending on a company’s culture, so-called boomerang employees who leave and then return might have been frowned upon in the past, but it’s becoming more acceptable.
“This is not a bad place to look for employees,” Carpenter commented. “When you’re out of a job, you go and find shelter in any port, and a known company is going to seem more stable.” It’s also good for employers to go with a familiar worker, he said. “This is good for employees and employers.”
A Visier report on boomerang employees found that these returning employees made up 27% — nearly a third — of external hires in 2021. The first four months of 2022 showed rehires making up 28% of external hires.
Whether workers left to explore something new, because they perceived their salary is unfair, to seek new growth opportunities or a better career path, or for some other reason, they came back in an average of 13 months’ time, according to the report. The longer they were away, the less likely they were to return.
They returned, according to the report, because:
• They didn’t get enough onboarding support from their new managers.
• The new role wasn’t what they expected.
• They disliked the new company culture or peers.
• They felt they lacked work-life balance in the new position.
What’s more, boomerangers tend to return because they’ve maintained work relationships with their former colleagues and want to return to a familiar culture with familiar personal connections.
Managers were more likely than non-managers to be boomerangers, but 40% of those managers were promoted from a non-managerial position when they returned to the company. This suggests that career growth is a motivating factor for boomerangers.
The report also showed that more than a quarter of boomerangers were high performers when they left the organization — 27% for the first quarter of 2022 and
25% for 2021 — with less than 10% identified as low performers for 2021 and 2022. What’s more, rehires came back at an average 25% pay hike for the 2019 though first quarter 2022 time period, compared to companies’ average salary increase of 4%.
Rehire the right employees
Lowisz, who said he’s successfully rehired former employees, advised companies to go after past employees only if it makes sense to do so, not simply because they’re a known source.
Companies must have the skills to evaluate and hire new employees, but high-performing alumni hires are a win, he said. “If they were a good employee, why should you not take them back? Get your egos out of the way.”
Market shifts, no silver bullets
The job market, like the stock market, is cyclical. It’s bound to reverse course eventually. How soon that happens is debatable.
Ebersole Singh said the current employee-driven market will likely balance out, but depending on government incentives and other factors, “it may be a few years.”
Carpenter said he sees a market change already in the works. As interest rates go up and large employers like Google see drops in earnings, they start to reduce head counts. Smaller companies then follow suit, he said. “Expect layoffs in quarter one and quarter two of next year.”
Lowisz also sees a turnaround on the horizon, but perhaps a bit later. “The pendulum is starting to shift,” he said. “It’s going to start happening the later part of next year.”
Regardless of when the tides turn, the current recruitment market is challenging, and there are no one-size-fits-all answers. Experts advise employers to explore multiple avenues and keep learning more about what employees want in their market.
“What people are looking for is changing,” Carpenter noted. “Keep your finger on the pulse of what employees want and don’t get too attached to what attracted them five years ago,”
Remember that money can’t solve problems long-term, warned Lowisz. “More money and benefits is a temporary fix, because people will always want more,”
“There are no silver bullets,” Ebersole Singh said. “However, there’s a whole menu of options around these workforce challenges. It’s a time to be creative. Money is only part of the equation.”