You’ve read the news, and you’ve seen the LinkedIn posts; the disruption of recent years has triggered what has now been dubbed ‘The Great Resignation.’ This phrase, coined by organisational psychologist and Texas A&M University associate professor Anthony Klotz, refers to U.S. employees across all levels and industries quitting their jobs in record numbers. With it comes countless questions I’ve seen posed:

Is it a form of resolution against capitalism? Is it the natural evolution of work? Is it the culmination of an ‘anti-work’ movement? It could be all of the above. However, the more important question is, of course, why?

Why would people want to resign amid a global health crisis that has amplified job insecurity for millions of workers around the world? Who would not want a stable source of income? A Pew Research Center survey identified some of the reasons why U.S. workers are leaving their jobs.

The top five reasons why:

1. Low pay

2. Lack of opportunities for advancement

3. Feeling disrespected at work

4. Childcare issues

5. Not enough flexibility with work hours

Interestingly, most of these can be remedied with a restructuring of employee benefits, rewards, and remuneration. But without addressing the root cause of these issues, these would all just be Band-Aid solutions. The Great Resignation is not confined to US soil - a recent Sydney Morning Herald article noted that post-lockdown recovery is “driving a resurgence in job-hopping.” in Australia.

This specific term raises an important point - have perpetually locked-down workers taken early retirement? Or perhaps become full-fledged entrepreneurs, finally realising their dream of opening a sourdough bakery? Possibly. The more likely explanation is in the Sydney Morning Herald term “job-hopping”. The pandemic certainly seems to have brought forth long-festering issues, made people more open to change and opened their ideas to the opportunities available to them.

What Do We Do About It?

PwC’s The Future of Work study offers some interesting insights on how employers can “win a war for talent.” 

One unsurprising finding is that employers’ expectations and their employees’ reality often have a “sizable gap” between them. In other words, employers are not focusing on what matters most to employees. For instance, on-the-job learning was ranked 13th for employees, whilst employers ranked it second in terms of what they think employees valued most. 

The discrepancy could be attributed to misalignment, which takes roots over time and leads to costly and irreversible consequences, like the Great Resignation. In the above-mentioned example, it may be that learning on the job is not a differentiator for employees, it is a baseline expectation. The report also noted that employers tend to prioritise cost-effectiveness and ease of implementation in identifying top employee initiatives.

Ironically, the study also found that employee engagement across Australian organisations was high at 78%. This seems at odds with the insights about job-hopping, or perhaps it just highlights the failings of employee engagement as a proxy for retention. For employers and business leaders, now is the time to ask yourselves: are we truly focusing our business on what matters most to those who matter most to us?

The Answer? Look Carefully at Your Company Purpose

It can be extremely difficult to garner input from large populations of people. This leads many companies to shut out the noise, favouring the executive offsite as the forum for creating their company purpose. Others do lean into the challenge of engaging employees and key stakeholders in the process, but end up with reams of data with little clarity on what matters most, which makes landing on the right thing a stab in the dark. As a result, many companies over recent years have ended up with superficial purposes that end up as little more than words on a wall. 

This is a shame, given that:

• 74% of LinkedIn members place a high value on finding work that delivers on a sense of purpose. (Imperative & LinkedIn 2016)

• 83% of Gen Z in the US consider a company’s purpose when deciding where to work (Cone/Porter Novelli 2019)

The pandemic may have expedited the changes, but the exodus of employees indicates a much bigger issue aggravated by the global health crisis. A well-clarified purpose framework is a long-term solution that enables leaders to clarify an actionable strategy with measurable results. It guides effective decision-making, even in crisis situations like a pandemic. And more importantly, it builds genuine connections with people across the business.

Have a Purpose-Driven Impact

People thrive in purpose-driven organisations. The impact of a clear purpose framework resonates across an organisation, creating meaning and connection for everyone. Amsterdam-based Business of Purpose cited compelling data that emphasise the tangible impact of a purpose-based framework. 

One of their key findings is that “purposeful work increases workforce productivity, well-being and loyalty.” A 2017 study reported that employees who view their job as having a “special meaning” and “not just a job” were four times more likely to give extra and were 11 times more committed to staying with their organisations. 

A 2018 global talent trends survey found that the “highest-performing employees are three times more likely to work for a company with a strong sense of purpose.” Among the 76,000 respondents, only 13% said that their organisation is “differentiated by a purpose-driven mission.”

From the employees’ perspective, purpose can be the difference between retention and resignation. A 2018 study reported that almost all employees surveyed (“more than 9 out of 10”) were “willing to trade a percentage of their lifetime earnings for greater meaning at work.” Another 2018 study reported that 27% of managers in British companies were “likely to accept a salary cut to work for a company that has a clear purpose beyond profit.” They also found that 32% of the respondents would “consider leaving their job if a greater purpose was unclear.”

The Challenge of the Great Resignation is also an Opportunity

The Great Resignation could, in fact, be seen as the Great Migration. Workers are not quitting because they no longer need the money. On the contrary, they are taking a risk in search of the proverbial greener pastures. They are turning the tables on employers who have lost sight of what truly matters. The COVID-19 pandemic was a litmus test for which organisations truly live up to their carefully worded Employee Value Propositions (EVP).

Now, more than ever, companies are not just competing for customers - they are also competing for talent.

It’s not just the disgruntled ones who are leaving. Even those who feel relatively “comfortable” in their current jobs may be tempted by the availability of options.

What are these options? We’re talking more than hybrid or flexible working, four day work weeks or  stock options - these are just the tip of the iceberg. One McKinsey study in the U.S. found employees placed more value on “relational factors” at work, whilst employers were more likely to focus on the transactional ones. 

Simply put, one-off bonuses or paid holiday trips are definitely most welcome - but (and it’s a big but) they do not guarantee longevity and loyalty. The onus is on companies and business leaders to transform their organisations into a workplace that people will want to work for. The ones that do this effectively will win big in the midst of the great migration.