Caveat: I am not an economist, and I do not work in Human Resources. This is one persons take using a slew of statistics and Inferring a cause, effect and mitigation.
The Great Resignation, for those that are not familiar with the term, was a spike in quitting normalized with overall employment. The beginning of 2022 saw monthly quit rates of 3% across industries according to BLS. Many media pundits and politicians have have naively tried to lay responsibility of the uptick in resignations to everything from COVID relief checks to expanded unemployment benefits to job dissatisfaction. In my field of machine reliability, I have learned that there is rarely, if ever, one root cause. An article from Harvard Business Review astutely pointed out that this monthly voluntary turnover showed oddly linear trendline, ignoring the outliers in early 2020.
As stated in my caveat, I have no magic bullet to fix the economy or stop the ongoing Great resignation. What I do have are observations a few years into this resignation that I believe should be common sense.
Statistic 1: A study performed by Predictive Index estimated that the average cost of a single resignation is $11,372. Applied, In a firm of 1,000 people, if 200 left, it would cost the company $3 million in hiring alone, without considering lost output.
Solution 1: HR should not treat employee dissatisfaction with pay and other topics lightly. Reacting after the employee has left a company should be unacceptable. Managers should have their figurative fingers on the pulse at all times, especially when economies are at full employment and leverage has shifted to the worker willing to switch.
Statistic 2:
Solution 2: IT'S LINEAR! The "Great Resignation" should have come as a shock to no one. Wage stagnation coupled with rising inflation, incompetent or uninspiring management, and decreased long term economic outlook can make even the most enthusiastic employee frustrated. Corporate executives being surprised at this trend reminds the news cycle growing up in Florida. Despite the number of shark attacks year over year remaining similar and odds of being a victim being small, it seemed like every few years a news producer would recycle clips from Jaws and incite panic about sharks at the beach.
My fear is that Great Resignation will continue and increase in magnitude because corporate HR and c-suite executives will continue creating strawman arguments about the social safety net instead of addressing the root causes of why employees are frustrated to begin with. Hiring costs and turnover will then become a general expense working into cost equations, and this will cause long term damage to individual employees and the economy as a whole.
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Tim, Fantastic post and I think you are correct, without a successful treatment of the "root cause" of the problem resignations will continue. From a compensation based standpoint I could see that there may be some resignations that could be avoided with a proper remuneration of said employee's salary. Losing a high performing employee over a $5-8k of salary is a very bad hill to die on, especially when hiring a replacement with lower productivity costs 10k.
Unfortunately there are some Professional departments that cannot apply data to their decision making and as you mentioned will keep throwing illogical darts at the logical dartboard.