The "Great Resignation" refers to the trend that began in early 2021 of employees voluntarily leaving their jobs in large and unprecedented numbers, some to move to other industries for better pay and some to drop out of the market altogether. Current estimates are that there are upwards of 4.3 million "missing workers" compared to pre-pandemic statistics. While there are likely a number of reasons underlying the "Great Resignation," most agree that the COVID-19 pandemic pulled the curtain back on a growing dissatisfaction in key labor market fundamentals, including low wages (historically and compared to new employees), lack of paid leave to manage childcare and other personal issues, and inflexible work hours. Employers who want to "resignation-proof" their business and be competitive in a tight labor market should review their policies in three critical areas:

Wages. Compensation for workers is expected to increase by nearly 4% in 2022. In order to retain and attract new talent, employers must ensure that they have a market-competitive, total compensation package (base salary, incentives, and benefits). Employees have options in this tight labor market, including the option to migrate to jobs and industries that offer a more desirable compensation structure.

Paid Leave. Workers report that a flexible paid leave policy is an effective recruiting and retention tool. Competitive policies should focus not only on how much leave is offered, but how and when it may be used. Even small changes like frontloading paid leave and/or making paid leave available from the date of hire can be effective incentives.

Work Flexibility. The pandemic showed that (i) some workers (really) like remote work and flexible work schedules (shorter workweeks, 9/80 schedules, etc.), and (ii) employers can in many cases make these polices work. Particularly in mid- and upper-management white collar jobs, a remote or hybrid remote work policy may likely become the norm.

As 2022 begins, employers should consider where their workplace may be vulnerable to the Great Resignation and why. A makeover of the retention and recruiting toolbox may be required.

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