Do You Need to Worry About the Great Resignation?

You may have heard some rumblings over the past few months about what is being called the Great Resignation. When I got two emails in one day about it - one from Les McKeown and one from Forbes - I knew that this is a subject we need to talk about. What is the Great Resignation? Do owners and managers of accounting and bookkeeping practices need to worry about it? 

The term "Great Resignation" was first used in 2019 by Anthony Klotz (Texas A&M) to describe his prediction of a the time when huge numbers of workers would voluntarily quit their jobs. Headlines (and emails) by respected authors, academics and thought leaders are saying that not only is the Great Resignation real, but that it is here. 

What has already happened? 

We all have seen the signs that more workers are needed. Many of these are literal signs, the ones that say "Now Hiring" in front of many retail businesses and restaurants. But there are a wide range of industries facing worker shortages - education and health services; professional and business services; financial services; mining and logging; government; information; leisure and hospitality; wholesale and retail trade; durable goods; and transportation, warehousing and utilities. Each of these ten industries have more job openings per every unemployed worker. 

In case you scanned that list, you might have missed the fact that the financial services sector (which includes accounting and bookkeeping) is third on the list. Here is an important question - How many of your clients are in one of these ten industries? 

A fact we can't deny is that the pandemic definitely affected U.S. labor. How? There are the obvious effects of the pandemic such as the huge numbers of people who were laid off, unemployment, and other related issues. But here is one fact is one you really need to take to heart. 

The majority of workers (74%) don't want to go back to how they worked before the pandemic. According to a global survey of 8,000 SMB workers across multiple industries in December 2020, 74% want to re-think their pre-pandemic way of working.

That fact has contributed not only to people who have chosen simply not to return to work, but is feeding the ongoing voluntary turnover.

Do you (and your clients) need to worry about the Great Resignation?

Yes. If your practice has team members, you need to worry about the Great Resignation. If your practice doesn't have team members, you probably have clients who are employers and this information may be critical to their ability to stay in business.

Because there simply are not currently enough workers to fill many open positions, losing even a single team member could have a serious impact on your business. The cost (currently measured in thousands of dollars) to recruit and train a new worker will sky-rocket as employers fight for available employees. To win that battle, you need to be ahead of your competitors who want to hire the same workers. 

The time to re-imagine your human asset management is now.

What can be done to retain your workforce?

Two labor market trends that were accelerated by the pandemic might help you and your clients with employee retention. 

Workplace flexibility. During the pandemic, remote work became almost the norm for many industries. Workers embraced not only the fact they were working from home, but also embraced the inherent flexibility that often accompanies remote work. Workers want to decide for themselves how, where and when they work. Being able to make these decisions for themselves provides an empowerment that workers are increasingly demanding. 

"People analytics". Employers who intentionally measure employee empowerment and engagement will be able to deliver the workplaces, benefits and procedures their employees want. The results? Two words - employee retention.