The hottest trend in 2021 isn’t some fad on social media or a creative new baking recipe, it’s quitting your job, and it’s taken the U.S. workforce by storm.
20 million U.S. workers left their jobs between April and August this year, according to the latest federal BLS data. That’s 60% higher than resignations during the same period last year, and the highest rate of resignations since 2000. While these numbers show a massive shift in the labor market, there is a possibility the intent to leave is even higher. A recent Gallup survey found that 48% of the working population in the United States is actively job searching, highlighting the potential risk for employers who aren’t actively paying attention to their workforce.
With all this dire news, employers need to be equipped with the right tools to prevent their highest-performing employees from exiting. What we’ve uncovered through our own data analysis is that there are some very specific trends forming in resignations that employers need to pay attention to, particularly when it comes to who might be most at risk.
Experienced, tenured employees are leaving
Through an analysis of our anonymous workforce data for our most recent research report, we discovered that resignations were occurring at alarming rates for tenured, long-term employees, not just those early career builders.
Every company has a cadre of experienced employees who are in the middle of their careers and have been at the company long enough to understand internal processes. This is not the type of person that one associates with higher resignation rates, but in 2021, mid-tenured employees were quitting in droves. The resignation rate of employees with a five- to 10-year tenure was 56.8% higher in 2021 than in 2020, and the rate for employees with 10 to 15 years of tenure was 54.6% higher in 2021 than in the same period of 2020.
What this means is that employers who are losing tenured employees will—in addition to a productivity loss—also experience a disruption in knowledge sharing, mentoring, team effectiveness, and company morale. Not to mention the inherent costs of losing an employee can be up to twice the annual salary of that employee.
While the overall causes of this phenomenon are diverse, there is plenty of evidence to show that tenured employees are facing unprecedented burnout following the impact of the pandemic on their organizations. Additionally, many are reconsidering their work-life arrangements, increasing offerings for remote work, the enticement of increased compensation, and improved work-life balance.
Age plays a factor, but not in the way you might expect
Most organizations can safely assume that when it comes to their younger employees, there is likely to be a high percentage of turnover due to early career movement and progression. 2021 however, has shown that the Great Resignation doesn’t discriminate by age. While the 20-25 demographic did see the highest increase in their rate of resignations, likely having delayed career moves due to the COVID-19 pandemic, employees aged 30-35, 40-45, and 45-50 have all increased their resignation rates by more than 38%.
This data lines up with the previous statement that mid-career professionals were exiting at higher rates, as those individuals would most likely fall within an older demographic. What this data doesn’t show is the multitude of workers that were also forced into early retirement at the beginning stages of the pandemic.
This presents an opportunity for employers that are willing to think more creatively about the composition of their workforce. Many retirees have considered coming back into the workforce, and in fact, there are some proven benefits to having an older workforce such as an increase in cognitive diversity, broad knowledge and expertise, and mentorship opportunities.
Diversity balance is at risk, with women leaving the workforce
Maintaining a diverse, and equitable workforce is a challenge for many employers; the pandemic has exacerbated these issues. Women around the world have been deeply impacted by the pandemic. Research from McKinsey found that one in four women considered downshifting their careers or leaving the workforce entirely.
From January to August in 2021 we saw significant growth in the resignation rate for both men and women compared to 2020 (55.4% growth for women, 47.2% growth for men). But, while both genders saw increased growth in resignation rates in the first months of 2021, the growth rate for women’s resignations was 17% higher than the rate for men.
Beyond the moral implications of losing ground on the battle for gender diversity, there are numerous benefits for organizations to find new means of attracting and retaining women. Simply put, companies with more women, especially more women in leadership, perform better.
How to keep the best employees
Retaining key talent remains a critical issue for organizational leaders, and for the past year, businesses have lost unprecedented volumes of talent, especially women and tenured, experienced employees. Unexpected and rising resignations cost organizations time and money. They can have a negative effect on morale, as remaining employees question their own reasons for staying, as expressed in the phenomenon of the turnover contagion and on culture, as experienced workers take their expertise with them.
But paying attention to what’s happening within an organization is the first step in alleviating this problem. Workforce data can provide a nuanced perspective at the specific dynamics at hand, and help reveal which populations are most at risk of leaving. Just as data analysis can reveal which demographics have been quitting in higher numbers, listening to employees and looking for micro trends within an organization will provide leaders with insights to slow attrition. Strategic use of data will take the guesswork and enable proactive business leaders to assess resignation risks, to identify and act on solutions, and to monitor how well these strategies are working.
Andrea Derler, Ph.D. is principal, Research and Customer Value at Visier, an organizational researcher, and previously, a human capital analyst.