What can businesses do about the great resignation?
With ⅓ of UK workers considering a career change at the start of 2022, the ‘great resignation’ has shaken up businesses - and its effects are still rippling throughout many industries.
From America to the UK, employees around the world are quitting their jobs in the hope of a better work and life balance, more recognition and flexibility in where they work.
This has impacted almost every sector and industry, and there are no signs of it slowing anytime soon. In fact, 91% of HR leaders are concerned about employee turnover in the immediate future.
Let’s take a look at how it started and how to manage the great resignation…
What is the great resignation?
When a global pandemic rocked our daily lives, with many industries coming to a swift halt, the effects were long-lasting.
The ‘great resignation’ is the recent trend in people quitting or changing their jobs. As more employees have handed in their notice as part of this movement, it's had a domino effect on the UK workforce.
Covid-19 is one of the main reasons for the initial switch-up. When the world froze, it gave employees time to look at their careers and their current employers and decide whether it was time to make a change. Thousands of people decided they wanted more from their employers, whether it be greater work-life balance or better perks and benefits, and as a result more people than ever quit their jobs in 2022.
What led to the great resignation?
Besides the huge amounts of time that everyone had to re-evaluate their goals and lifestyle during the pandemic, there are lots of other reasons why the great resignation is taking place at this moment in time…
Remote working: Once people had a taste for flexible working, it opened up the doors for working from home and being away from the office on a permanent basis. As a result, the number of people who are hybrid working has increased significantly in 2022.
Greater benefits: With remote working now a much more common option, employees have their pick of the bunch - including international employers. Rather than just focusing on the salary, people want more workplace benefits and this has become a huge deciding factor for employees.
Cost of living: Supermarket prices have risen at the fastest rate in over a decade. Energy bills have risen by £693 for 22 million people. Petrol prices were also affected after they hit new records throughout the summer of 2022.
The cost of living crisis is well and truly in full swing and it has led to people finding new roles with better salaries or benefits that help with the rising prices in other areas of daily life.
What is the cost of the great resignation?
Any significant labour shifts within a company can bring steep costs.
It’s estimated that losing a team member can cost a company 1.5 - 2 times the employee’s salary. It’s a major concern that can impact both a company and their team members.
As one person leaves, another is expected to fill the gap by picking up extra work. Although this can lead to promotions later down the line, it often causes more stress and demand on the existing team members. This can cause unhappiness and resentment, causing other employees to resign.
Or if the person exiting the business creates a massive skills gap, certain projects can be left on the sidelines.
Not only is money lost through forgotten or delayed deadlines, but recruitment must also ramp up.
Recruiting for a new role involves: organising the recruitment process, advertising, conducting interviews, negotiation, hiring and eventually, training. All of this costs money and a whole lot of time.
How can businesses manage the great resignation?
The grass is greener where you water it. Although increasing salaries isn’t always possible, there are lots of other avenues to consider that can support employees significantly.
Research by Willis Towers Watson found that 75% of employees are more likely to stay with their employer because of the benefits package. And when it’s as simple as opening up a great scheme for the team, it seems like a no-brainer. This is a key way to not only attract new and exciting talent, but to retain the very best in the business too.
A benefits package supports employees and improves their wellbeing. And having options within this package makes sure that each employee is incentivised.
These packages often include similar benefits, like dental insurance, private medical insurance, cycle-to-work scheme, free workplace canteens, and transport to and from the office.
And one substantial benefit, which is a major bonus for many employees, is an electric vehicle on a salary sacrifice scheme.
The salary sacrifice scheme is still heavily incentivised by the government, so it’s very cost-efficient for both employer and employee. It’ll also save money in running costs and contribute towards a greener environment - all while each team member has access to a brand new electric vehicle!
With our EV salary sacrifice scheme, there are no upfront costs to you or your team.
The car is paid through their gross salary automatically each month. In the meantime, the team saves on Income Tax and National Insurance, and pays only a small percent of Benefit-in-Kind (BiK) tax.
Current petrol prices and government guidelines changing over the next few years mean electric vehicles will become more popular than ever before.
It’s a major win for both sides. When an employee enters into a two to four-year lease it’s a great indicator that they’re planning on staying in the business for the long-term.
To help you with securing the very best talent within your team, even in the middle of the great resignation, check out Octopus Electric Vehicles salary sacrifice scheme. Want to know what other businesses are saying about the scheme before you join? Read our customer stories for some inspiration.