The Great Resignation

Impacted by the Covid 19, many people have concluded that their work-life balance is more essential to them after working from home for a lengthy period of time with no commute. The most cited reasons fall into 3 categories: (i) stagnated compensation package; (ii) hostile and inflexible work environment; and (iii) unfulfilling career prospects. Rising costs of living and Covid-19 pandemic intensified the problems and made workers reconsider their choices.

The impact was felt globally. In Australia, the “Great Reshuffle” occurred as workers switched jobs to get a pay bump. In China, the “Tang ping” movement started among young people who rejected social pressures to overwork. In Europe, a 2021 survey   reported that 2.3% to 6% workers had Covid-related resignations. In India, there was over 1 million resignations in 2021 in IT sector. In the United States, resignations hit 4 million in April 2021 and 3.9 million in June 2021.

According to the 2022 Work Trend Index survey by Microsoft Corp. (MSFT), 43% of workers said they were somewhat or extremely likely to consider changing employers in the current year, up from 41% a year earlier. For U.S. Gen Z and millennial workers, the figure stood at 52%, and it rose to 60% for U.S. workers hired during the pandemic. Another survey conducted in November 2021 by Career Arc found that 23% of U.S. workers planned to quit over the next year. The top reasons cited were the desire for better working conditions, burnout, and the pursuit of higher pay.

In terms of sector, accommodation and food services was the most heavily impacted, followed by retail trade, professional and business services according to US Bureau of Labor statistics.

The Great Resignation in Financial Services

According to a report by Aon, 78% of the leavers seeking better career opportunities whilst 77% are for higher pay. Across financial services, the percentage of firms reporting higher turnover among these demographics include 65% of the Millennials, 33% of women, and 48% of Gen Z. 60% of financial services firms said entry-level employees are experiencing higher turnover versus 45% across all industries. Financial services companies are accelerating workforce change to address rising turnover challenges in today’s labor market.

The Aftermath – How companies can acquire & retain top talent

Financial services companies are acting now to attract and retain talent. Accordingly, 94% of the surveyed companies have focused on adjusting base salaries, 70% of them have reported adjusting sign-on awards and 42% of them have increased flexibility. Moreover, financial services companies are looking ahead to key HR strategies and priorities for 2022. Here are some suggestions.

1. Create meaningful/ purposeful jobs with transparent values and social awareness. 
2. Embrace flexible and supportive structures and emphasize this in branding.
3. Assess candidates based on skill sets and potential, rather than past experience. 
4. Upskill and reskill employees, balancing long-term needs of employees and companies.
5. Consider unlimited paid time off (“PTO”) without micromanagement. Create growth plans, offer education, and utilize idea groups to generate innovation.
6. Follow through Diversity, Equity, and Inclusion (“DEI”) initiatives with significant actions.
7. Gather internal data, via both exit interviews and stay interviews.
8. Formulate new strategies for team-building and morale-boosting while working remotely.

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References:

1. Bloomberg. “Employees Are Quitting Instead of Giving Up Working from Home.”, https://www.bloomberg.com/news/articles/2021-06-01/return-to-office-employees-are-quitting-instead-of-giving-up-work-from-home.
2. Microsoft. “2022 Work Trend Index: Annual Report”, https://ms-worklab.azureedge.net/files/reports/2022/pdf/2022_Work_Trend_Index_Annual_Report.pdf,  Page 38.
3. CareerArc. “23% of Employed Americans Plan to Quit in the Next 12 Months: 23 Key Stats from the Great Resignation + Rehire Survey.”, https://www.careerarc.com/blog/great-resignation-rehire-survey-infographic/.
4. U.S. Bureau of Labor Statistics. “Job Openings and Labor Turnover — March 2022, https://www.bls.gov/news.release/archives/jolts_05032022.pdf.
5. Aon, “How Are Financial Services Companies Addressing the Great Resignation?”, https://humancapital.aon.com/aon.humancapital/media/files/infographics/2022/Infographic_Pulse8_Financial_Services_Ltr.pdf.