Why the “Great Resignation” may not have hit your business yet (and what you might do to make sure it doesn’t!)
April 19, 2022
Early 2022 saw many commentators talking about “The Great Resignation” – a perfect storm of older workers deciding that they want to step away from their current roles (possibly into retirement or a different direction), whilst younger workers deciding that they wanted to work in organisations that “better represented” their values.
Whilst it does seem that this phenomenon has some sound basis in the US, there seems to have been less traction in the UK.
However, given the typical remuneration cycle of most UK companies, there is a strong possibility that any decision to move may have been deferred rather than avoided.
In practice, March, April and May are the months when companies make big decisions around short-term pay – be that salary adjustments or bonus payments. Given that there are usually “lock-ins” around bonus payments it is likely that employees are waiting to get bonus payments before taking next steps.
Here are three practical steps we would recommend all firms take during this “review season”.
The first, and possibly most crucial step, is to try and establish whether you might have an issue. This can be done through suitable internal interviews between senior management/the people team and the wider workforce to gauge sentiment towards the business. However, where employees may wish to evade honest discussions due to thoughts of moving in the near future, this approach may have limited success.
As a result, it may be sensible to start to utilise a bespoke employee engagement tool. These tools can be crafted in such a way that real feelings towards the business can be extracted. Whilst there are a number on the market, this author particularly likes WOTTER – which in addition to taking the temperature of the business, uses AI to predict when you may have issues in the future.
The second thing to be done is to make sure that salaries across your business are market competitive. Solutions here will include engaging in conversations with peers to see what they are doing, undertaking a market benchmarking study (particularly if this has not been reviewed for a while) and revisiting your remuneration policy around short-term remuneration to make sure it still meets your needs.
Finally, for key employees, make sure that you have some sort of long-term incentive structure in place. It has been shown that the simple act of having someone in a long-term incentive plan significantly increases levels of retention.
MM&K are well placed to help with any of the issues set out above. Should you want to have someone help you explore your thinking on this issue, please contact Stuart James in the first instance.