The “Great Resignation”: Causes, Consequences, and Creative HR Management Strategies ()
1. Introduction
Employee resignation and retention are two sides of the same coin. Employees’ resignations have an adverse effect on organizational effectiveness (e.g., Hom et al., 2017; Hom, Lee, Shaw, & Hausknecht, 2017; Huselid, 1995; Park & Shaw, 2013). Although employees’ resignation often negatively affects the firm’s productivity and competitiveness, it can sometimes be beneficial, specifically when “low-value” employees resign (Judge & Kammeyer-Mueller, 2022; Tessema et al., 2017). However, the magnitude of employee resignations in the United States (U.S.) in 2021 was unprecedented. While Klotz called the phenomenon the “Great Resignation” (Kaplan, 2021), Curtis termed it the “Big Quit” (Curtis, 2021). U.S. employees have been voluntarily resigning from their jobs in droves, since early 2021, and the resignations reached the peak in September 2021, with 4.4 million American workers quitting their jobs (U.S. Bureau of Labor Statistics, 2021). The “Great Resignation” remains somewhat mysterious in that there are labor shortages, although employment is much below its pre-pandemic level (5 million; Carucci, 2021).
The COVID-19 pandemic is the main factor that triggered mass resignations, which has had a profound effect on organizations and their workforce in the U.S. The year 2020 changed work altogether (Agovino, 2021; Allman, 2021; Chamberlain, 2021). While millions of U.S. employees could not work in 2020 (due to compulsory lockdown), others had to work from home. For instance, the total separation in January and February 2020 was 5.7 million, but that number soared to an all-time high of 16.3 million in March 2020 (U.S. Bureau of Labor Statistics, 2020). However, despite the introduction of COVID-19 vaccines, millions of U.S. employees were reluctant to return to their workplace for many reasons, such as comfort of working from home (working from home provides employees flexibility and convenience, and reduces their transportation cost and time) (Maese & Saad, 2021; Maurer, 2021), fear of COVID-19 as the efficacy of the vaccines is not 100%, employees’ hesitancy of getting vaccinated, and the multiple job opportunities (Geisler, 2021) provided by the current employee-driven market (Allman, 2021; Krugman, 2021).
Generally, organizations expect a reasonable employee resignation rate. However, recently, the U.S. witnessed unprecedented resignations of employees who either left the workforce or switched jobs in droves (Curtis, 2021; Kaplan, 2021; Molle & Allegra, 2021). Before the pandemic, the U.S. resignation rate never exceeded 2.4% of the total workforce per month (Economic Policy Institute, 2021). However, in September 2021, it reached 3%, which was the largest spike on record (U.S. Bureau of Labor Statistics, 2021). During the “Great Recession”, the employee resignation rate was 1.3%, down from 2.0 % (Economic Policy Institute, 2021). These figures reveal that the U.S. recently faced a national mass exodus of employees. Recent surveys indicate that while 41% of employees were thinking about resigning from their jobs or changing professions in 2021 (Microsoft, 2021), 65% were looking for a new job, and 88% of executives were experiencing higher resignations than normal (PricewaterhouseCoopers, 2021). Moreover, the Gallup survey revealed that 48% of employees were actively looking to change their jobs (Maese & Saad, 2021).
The pandemic and rise of remote work have changed the way employees view their lives and the world (Kaplan, 2021; Krugman, 2021). The pandemic has allowed employees to re-evaluate their careers, specifically how it fits into their overall lives (Geisler, 2021). One can argue that given the pandemic and the employee-driven labor market that has affected the way employees view jobs (jobs and lives), having effective retention strategies is a sine qua non to addressing the “Great Resignation”. Progressive human resource (HR) policies and practices that take employees’ demands, preferences, and well-being into consideration are needed. They are not a matter of choice but are required for organizations to succeed in the increasingly globalized and technology-driven world (Molle & Allegra, 2021; Sammer, 2021; Tyler, 2021).
Many studies have been conducted on employees’ resignation-related issues (e.g., Hom et al., 2017; Huselid, 1995; Klotz & Bolino, 2016; Park & Shaw, 2013; Peterson, 2007; Postuma, Maertz, & Dworkin, 2007). However, there is a scarcity of systematic studies on the “Great Resignation”, which occurred in the U.S. in 2021. Therefore, this study intends to 1) investigate the causes of the “Great Resignation,” 2) identify and discuss its consequences, and 3) put forward creative and innovative retention strategies that can address the “Great Resignation” problem.
The rest of the paper is organized as follows. In section two, we review the literature on employee resignation, which also discusses the following resignation related issues: the causes and consequences of the “Great Resignation” and innovative employee retention strategies that organizations can use to retain employees. In section three, we draw the implications and present the conclusions of the study. Finally, in section four, we discuss the limitations and directions for future research.
2. Literature Review
Organizations aim to achieve certain goals. Accordingly, they must have the necessary human, financial, and physical resources to achieve their goals. Although these resources are needed to varying degrees in different organizations, human resources are believed to be the most critical resources that organizations need in order to achieve their goals (Gerhart & Feng, 2021; Huselid, 1995). The way the modern workforce is managed (hired, trained, appraised, compensated, supervised, and treated) makes an impact on employee effectiveness and retention (Gerhart & Feng, 2021; Gowan, 2022).
It has been argued that HR management is either part of the problem or part of the solution to gain productive contribution of people in an organization (Lussier & Hendon, 2021). This study contends that the more effectively the employees are managed, the lower their intention to resign. In this study, an employee’s resignation refers to an employee-initiated employment termination. Employee resignation can be of two types: avoidable and unavoidable. While avoidable resignation is a type of resignation that can be prevented, unavoidable resignation (e.g., health, childcare, pregnancy, return to school, relocation, dual career, new career, and retirement) cannot be prevented. Although the resignation of less productive employees is desirable, it is detrimental to organizational success (Judge & Kammeyer-Mueller, 2022; Harbert, 2021; Heavy et al., 2013). In this section, we reviewed the literature to identify the causes and the consequences of the “Great Resignation” and innovative employee retention strategies that organizations can use to retain employees.
2.1. The Causes of the “Great Resignation”
For an organization to develop effective retention strategies to mitigate the “Great Resignation,” it needs to know the root causes of the “Great Resignation.” Many factors have contributed to this phenomenon. In this study, we grouped the factors into three broad categories: the pandemic, current employee-driven labor market, and lack of effective organizational support for employees.
2.1.1. The COVID-19 Pandemic
The pandemic is one of the main factors that led to the “Great Resignation” (Agovino, 2021; Allman, 2021; Geisler, 2021; McNeil, 2021). During the pandemic, employees felt sheltered and chose not to leave their jobs because of the uncertainty in their economic future. However, during the recovery from the pandemic in 2021, they felt empowered to resign and look for better opportunities. The “Great Resignation” was mainly the consequence of COVID-19 pandemic (Agovino, 2021). Employees either left the workforce or searched for job opportunities that offered them more flexibility (Taylor, 2020). Overall, the pandemic contributed to the “Great Resignation” for five reasons.
It gave employees more time to think about their careers: The pandemic gave American employees time and opportunities to reassess their situations and priorities (Krugman, 2021; Maurer, 2021). The first year of the pandemic allowed employees to assess the extent to which their work was truly rewarding and look for a job they would love and help them earn more money (Allman, 2021). The pandemic allowed the employees to think about their careers, explore entrepreneurship, and save more money (e.g., through reduced spending during the lockdown, federal stimulus checks, and suspension of student loan payments). Many employees realized that their jobs were not fulfilling (Maurer, 2021). Therefore, when many employees decided to spend their time differently than they did before the pandemic (Agovino, 2021), their thoughts on the risk of resignation were reshaped.
It created fear of being infected by the COVID-19 virus: The pandemic has been devastating in several ways. Its contagious nature harms workplace safety and health (CDC, 2021; Geisler, 2021). Consequently, organizations were forced to change their way of operation. When the number of COVID-19 related infections and deaths increased (CDC, 2021), many employees began to fear COVID-19. The recent multiple infection outbreak waves and the Delta and Omicron variants have also contributed to employee fear. Many employees who were asked to return to the workplace opted to resign. Thus, the fear of COVID-19 is one of the many factors that influenced employees’ decisions to resign (APA, 2021).
It contributed to employee stress: The pandemic increased the stress level of American employees in that most of them reported an uncertain economic future (81%) and the coronavirus pandemic (80%) as significant sources of stress in their lives (APA, 2021). Many employees lost their colleagues due to death, sickness, and resignation during the pandemic. They lost their normal social interactions, which hurt their physical and mental health (McNeil, 2021; Zielinski, 2020). Employees’ workloads and working hours increased due to shortage in the workforce. They were forced to wear masks and receive vaccines. Moreover, employees had a hard time receiving daycare services since child-care services were not functioning at full capacity (Seth, 2021). Many workers have been unable to balance work and personal life, and had to be physically distant from their loved ones (e.g., friends, family, and coworkers). Thus, these factors sped up the rate at which employees became stressed, which had an impact on their intention to resign.
It led to the rise of hybrid and remote work: The pandemic forced employees to work from home, making many realize the benefit of remote work (e.g., home comfort, flexibility, reduction of transport cost and time, and work-life balance). Many employees are now accustomed to working from home (Taylor, 2020). Under such circumstances, when asked to return to the workplace, they were reluctant and opted to resign. The pandemic led to the rise of hybrid and remote work, which encouraged many employees to resign when their demands for hybrid and remote work were not met.
It led to mandatory vaccination or weekly testing: Millions of American employees have been hesitant about COVID-19 vaccines for different reasons, including religious, political, and personal (Agovino, 2021). The Biden administration recently directed the Occupational Safety and Health Administration (OSHA) to issue a temporary emergency standard requiring all private employers with at least 100 workers to require COVID-19 vaccination or undergo weekly testing (CDC, 2021). Therefore, employees who saw the government’s vaccine mandate as a breach of their freedom to choose and a breach of their religious rights decided to resign rather than comply (Hirsch, Cowley, & Scheiber, 2021). A recent SHRM survey revealed that 85% of the surveyed organizations anticipated that the Biden administration’s mandate for vaccination or testing would make retaining workers more difficult. However, 52% of the surveyed employees responded that they would likely quit their jobs if their organizations required them to be vaccinated as a condition of employment (Maurer, 2021).
From the preceding discussion, we can conclude that COVID-19 and its ensuing lockdowns had an adverse impact on the American workforce. Although the work environment is constantly evolving, the pandemic has introduced several changes. It has made workers re-evaluate what they are getting out of their jobs and helped them choose the job they love (Cook, 2021; Kaplan, 2021).
2.1.2. The Current Employee-Driven Labor Market
The current employee-driven labor market also contributed to the “Great Resignation”. The current tight labor market provides employees many job opportunities and lowers the cost of resignation. Many employees resigned knowing that they could obtain a better offer in terms of pay, benefits, flexibility, workplace safety, and supervision. When there are many open positions in the job market, people leave their current positions to search for better-paying ones with greater benefits and work-life balance (Gowan, 2022; Phillips, 2022; Susik, 2021; Verhulst & DeCenzo, 2022). High resignation rates may indicate workers’ confidence of obtaining higher-paying jobs (Grmaldi, 2021; Gowan, 2022) and low unemployment rates (Phillips, 2022). For instance, approximately four million Americans quit their jobs in July, and by the end of the month, there were 10.9 million open jobs (Cook, 2021). Owing to the increase in job openings and the opportunity for better compensation, employees now have more criteria for their job search than prior to the pandemic. Thus, the current tight labor market has increased both the scope and complexity of employee retention.
2.1.3. The Lack of Required Organizational Support for Employees
Previous studies have revealed that many employees have not been able to obtain the required support from their organizations (Hirsch, 2021; Taylor, 2020), which leads to job dissatisfaction and resignation. For instance, many employees have not been able to achieve work-life balance (Hirsch, 2021; Taylor, 2020), get effective employee assistance programs (Zeidner, 2020), or participate in virtual socialization and social networks (Sammer, 2021). In addition, employees do not receive services such as effective employee wellness programs (Fournier, 2021; Zielinski, 2020), appropriate IT infrastructure and training while working at home (Taylor, 2020), and proper supervision and treatment (Tyler, 2021). Adequate personal protective equipment and a safe and healthy workplace (Sheather & Slattery, 2021), enough paid leave (Agovino, 2020), and the opportunity to voice their concerns and challenges (Harbert, 2021) were other employee concerns.
The factors that trigger employee resignation can be grouped into two broad categories: push and pull. Push factors cause employees to resign (e.g., lack of flexible work arrangements [FWAs], unattractive pay and benefits, and lack of proper organizational support). In contrast, pull factors cause employees to join an organization that meets many of their demands and preferences (e.g., FWAs, attractive pay and benefits, and proper organizational support).
The primary question in this study concerns how organizations can identify the root cause of employee resignations and address them properly. A comprehensive review of the literature indicates that exit interviews, post-exit surveys, and employee job satisfaction surveys are methods organizations can use to understand the reasons for employee resignation (Judge & Kammeyer-Mueller, 2022; Hirsch, 2021; Lussier & Hendon, 2021; Tyler, 2021). While exit interviews are formally planned, and discussions are conducted with departing employees, post-exit surveys are sent shortly after the employee’s last day of work (Judge & Kammeyer-Mueller, 2022; Lussier & Hendon, 2021). In addition, job satisfaction surveys are conducted to understand the extent to which employees are satisfied/dissatisfied with different aspects of their jobs, which provides organizations with insights into employees’ job dissatisfaction levels and intention to resign (Hirsch, 2021; Tyler, 2021).
2.2. Consequences of Employees’ Resignation
Employees’ resignations harm organizational effectiveness (e.g., Heavy et al., 2013; Hom et al., 2017; Klotz & Bolino, 2016; Park & Shaw, 2013). This is due to the costs associated with employee resignation, which can be grouped into three main categories: separation, replacement, and training costs (Judge & Kammeyer-Mueller, 2022; Heavy et al., 2013; Hinkin & Tracey, 2000; Tyler, 2021). Employee separation costs refer to costs incurred when an employee resigns, and includes costs such as temporary coverage (e.g., overtime pay for exiting employees and temporary employees) and HR professional time (payroll, benefits, and exit interview). In addition, employee resignations can trigger other employees to resign and be hired by a competitor, lead to production and customer service delays, or decrease the quality of goods and services. Employee replacement/hiring costs refer to the costs incurred to replace a resigned employee, and may include hiring costs (e.g., advertising the job opening, time and cost of reviewing resumes, recruiting software costs, interview costs, drug testing, background checks, pre-employment assessment tests, onboarding (such as orientation program time and materials), and induction costs (such as payroll and benefits enrollment). Employee training costs refer to the costs incurred to train newly hired employees, and may include on-the-job training (e.g., supervisor and employee time), off-the-job training (e.g., trainee and instruction time, materials, and equipment), productivity loss (e.g., loss of production until becoming fully productive), and mentoring (e.g., mentor’s time) (Clark, 2014; Judge & Kammeyer-Mueller, 2022; Susik, 2021; Peterson, 2007; Tyler, 2021).
These costs of resignation can also be grouped into two broad categories: financial and non-financial costs. Financial costs may include costs of time people spend, costs of materials and tools, and productivity losses. Non-financial costs include having a negative effect on workforce morale, lower customer satisfaction, loss of clients, and reduced efficiency (Judge & Kammeyer-Mueller, 2022; Hinkin & Tracey, 2000). Moreover, mass employee resignation creates a burden on HR and line managers as they would have to constantly hire and train new employees (Fox, 2014; Heavy et al., 2013; Tyler, 2021). Thus, an employee’s resignation is expensive, and organizations should try their best to reduce the number of employee resignations using the different retention strategies discussed below.
2.3. Strategies for Minimizing Employees’ Resignation
One of the main reasons employees resign is job dissatisfaction (Fox, 2014; Hirsch, 2021), which is influenced by several HR policies and practices. When organizations have effective HR policies and practices, their employees are more likely to have higher job satisfaction, reducing their intention to resign. Progressive HR approaches offer strong competitive advantages, and without them, organizations could be at an extreme disadvantage in minimizing mass resignation. This study contends that having progressive HR approaches that evolve from “nice-to-have” to “must-have” are essential for organizations to survive, compete, and win in the globalized world. Prior studies have shown that organizations that overcome employee turnover-related challenges emerge more strongly (Taylor, 2020).
This study uses employee value proposition (EVP) as the basis for creating retention strategies that address the “Great Resignation” challenge faced by American organizations. EVP is the totality of rewards that an employee receives in return for knowledge, skills, ability, and other characteristics (KSAOs) that they bring to an organization (Ledford & Lucy, 2003). It sets a monetary and non-monetary reward for employees who respond positively (Allman, 2021; Judge & Kammeyer-Mueller, 2022). It has been underscored that for EVP to be effective, it should not be of the wrong magnitude (either too small or too great) or wrong mix (out of sync with the employees’ preferences). Further, it should also be distinctive enough (special appeal to win the hearts and minds of employees). Although designing EVP that employees appreciate is costly, its benefits (in terms of attraction, performance, and retention) outweigh the costs (Geisler, 2021; Kazi & Hastwell, 2021; Tyler, 2021). Although designing an effective EVP is often a challenge for organizations, the results can have significant implications for employee retention and employee resignation (Judge & Kammeyer-Mueller, 2022). Hence, when an organization fails to design an effective EVP, its retention power diminishes (Huselid, 1995; Ledford & Lucy, 2003). Although many factors affect employee resignation, the following three retention strategies can play a significant role in reducing employee resignation during the pandemic and beyond: FWAs, attractive compensation (pay, benefits, and incentives), and proper employee support.
2.3.1. Providing Flexible Work Arrangements (FWAs)
The pandemic has changed how we work and our perspective of the traditional (rigid) work schedule, which is 9-to-5 a day, 40 hours a week, and 5 days a week (Chamberlain, 2021; Zielinski, 2021). After the pandemic, most organizations voluntarily or mandatorily allowed their employees to work remotely, and the employees became accustomed to this work format and appreciated the benefits of FWAs. Although many employees always prefer FWAs, the pandemic has increased their desire to have even more flexibility in their work lives. In this technology-driven increasingly globalized market, where it is possible to work from practically anywhere any time, FWAs are becoming the “new normal” (Krugman, 2021; Maurer, 2021; Zielinski, 2020). Consequently, it will be difficult for organizations to bring back the life that was prevalent in the workplace before the pandemic (Ward, 2021; Seth, 2021).
Many studies have reported that it has become easier to work remotely and stay in touch with the development of communication tools, such as the Internet, digitalization, and cloud storage (Maurer, 2021). When organizations provide their employees with options regarding how and when to work (e.g., working in-person, from home, hybrid, compressed workweeks, and flexible schedules), employees’ intention to resign is likely to diminish (Kalita, 2021; Microsoft, 2021). Studies have shown that many organizations that have FWAs meet reasonable standards for productivity, quality, and service (Kazi & Hastwell, 2021; Microsoft, 2021). Hence, the availability of FWAs is critical for organizations to minimize employee resignations.
While only 5% American employees worked from home before the pandemic, this number increased to over 60% in May 2020 (Kazi & Hastwell, 2021). Similarly, Fortune 500 executives who worked from home increased from 16% to 65% (Kazi & Hastwell, 2021). Although remote work declined from 82% in October 2020 to 72% in February 2021, many employees continue work remotely to some degree (Maese & Saad, 2021). Furthermore, by September 2021, about 45% of American employees worked from home to some degree (Saad & Wigert, 2021). About 91% of American employees who worked remotely for at least some hours hoped to continue their remote work after the pandemic (Saad & Wigert, 2021). In addition, while 54% of the remotely working employees would like to have a hybrid arrangement, splitting their time between working at home and in the office, 37% would like to work from home entirely, and 9% would prefer to return to the office full time (Saad & Wigert, 2021). 76% of remotely working employees also expect their organization to allow them to work remotely in the future as well, and 61% of them expect to work in a hybrid manner for at least the year 2022 (Saad & Wigert, 2021). Approximately 30% of employees working remotely will likely resign if their organization removes the remote work option (Saad & Wigert, 2021). While 73% of employees want flexible remote work options to stay, 66% of managers reported that their organization is planning to redesign office spaces for hybrid work (Microsoft, 2021). A recent SHRM survey revealed that if given the option, about 52% of American workers would choose to work from home permanently on a full-time basis (Maurer, 2021). About 45% of American employees are still working from home to some degree, and most of them do not want to return to the office full-time (Maurer, 2021).
These surveys also indicate that the most preferred FWA is a hybrid approach that allows employees to work partly from home and partly in-person (Chamberlain, 2021; Kalita, 2021; Microsoft, 2021). The figures may also suggest the need for organizations to evaluate employees’ desires and preferences regarding FWAs and attempt to accommodate their desires in general and of those who are “high-value” employees in particular. Organizations may need to have more flexibility in their HR policies and working arrangements (Sammer, 2021; Tyler, 2021).
Employees have many reasons for preferring FWA, including flexibility to balance work and personal obligations, not commuting frequently, improved well-being, comfort from working from home, convenience, and reduced employee transportation costs and time (Agovino, 2021; Kazi & Hastwell, 2021; Maurer, 2021; Seth, 2021). Prior studies indicated that when employees are given flexible work schedules, they are more likely to be more productive, healthier, happier, and less stressed (Maurer, 2021; Seth, 2021). This may subsequently lower their intention to resign.
2.3.2. Providing Attractive Compensation (Pay, Benefits, and Incentives)
The types of compensation (pay, benefits, and incentives) that employees receive have a far-reaching impact on their intention to resign (Gowan, 2022; Grmaldi, 2021; Phillips, 2022; Sammer, 2021; Susik, 2021; Verhulst & DeCenzo, 2022). Knowing the size and type of pay, benefits, and incentives demanded by employees and providing competitive compensation can play a critical role in reducing employees’ decisions to resign. The size and variety of employee compensation can be determined by conducting surveys inside and outside organizations (Maurer, 2021; Susik, 2021). Using public resources, organizations can compare their pay scales with similar organizations. Previous studies show that one factor that increases employees’ resignation is an organization’s failure to offer attractive pay and benefits (Grmaldi, 2021).
It has also been argued that organizations should attempt to prevent “high-valued” employees from resigning (Berman-Gorvive, 2014; Clark, 2014; Hausknecht, Rodda, & Howard, 2009). When highly valued or difficult-to-replace employees receive an outside job offer, it would be beneficial for organizations to make a counteroffer that matches or exceeds the outside job offer (Berman-Gorvive, 2014; Lussier & Hendon, 2021). Organizations should also develop special retention strategies for “high-value” employees in addition to other retention strategies (Hausknecht et al., 2009; Lytle, 2020).
Employees pay attention to benefits when they resign or accept an outside job offer. Hence, organizations need to offer attractive benefits and create avenues for future employee growth (Gowan, 2022; Lussier & Hendon, 2021; Phillips, 2022). For instance, 60% of people reported that benefits are a major factor in deciding whether to accept a job offer (Glassdoor, 2015). Hence, attractive employee benefits can provide organizations with a competitive advantage in attracting and retaining desirable employees (Geisler 2021; Maurer, 2021; Susik, 2021). In addition, incentives, or bonuses such as end-of-year bonuses, which are types of payments provided on an annual basis as a sign of appreciation, and retention bonuses, which are types of payments determined based on an employee’s length of service, can help improve the retention rate (Carucci, 2021).
2.3.3. Providing Proper Employee Support
When employees receive the support they need from their organization, their intention to resign may diminish (Allman, 2021; Cook, 2021; Heavy et al., 2013; Sheather & Slattery, 2021). The support employees receive from their organizations can help them have a sense of purpose (Carucci, 2021). The following are examples of organizational support that can be provided to employees.
Supporting employees to balance work and personal lives: Helping employees integrate their work and private lives improves job satisfaction (Maurer, 2021; Hirsch, 2021), which can subsequently diminish their intention to resign. This is because employees want to balance their work with their personal lives. When employees cannot balance work and life, their job dissatisfaction, stress, and desire to resign increase (Ladika, 2020; Seth, 2021). Although the issue of work-life balance has received some attention in the past decade, the pandemic has increased its importance. Thus, organizations need to align their HR policies accordingly. One way to help employees balance work and personal lives is to provide FWAs (Maurer, 2021; Zielinski, 2020). Work-life balance programs can allow employees to take time off from work if needed, create flexible scheduling options, and provide opportunities to work from remote locations (Tyler, 2021).
Supporting employees to obtain effective EAPs: EAPs are programs designed to help employees with personal problems such as mental and emotional health concerns, substance abuse, financial and legal issues, and family relationships (Verhulst & DeCenzo, 2022: p. 355). This is done by providing them with confidential counseling (Sammer, 2021) and referral services for different employees’ issues (McNeil, 2021). Many organizations provide EAPs to employees with emotional, physical, or other health problems. Many studies have revealed that the pandemic has had an adverse impact on employees’ health and well-being. Providing effective EAP programs can help minimize employees’ problems and improve their loyalty and commitment to the organization (Maurer, 2021; Zielinski, 2020). Organizations need to offer employee counseling and therapy sessions during scheduled work times by hiring therapist(s) or referring them to agencies that provide EAPs.
Supporting employees to have virtual socialization and social networks: After the pandemic, employees have not interacted and socialized in person. Not having social interactions takes a toll on employees’ mental health, and the lack of human interaction makes it difficult to battle internal demons associated with mental health. Providing employees with an opportunity to interact and socialize virtually can improve their job satisfaction (Sammer, 2021), which can help minimize employees’ intention to resign (McNeil, 2021). Organizations must encourage virtual social interaction (e.g., pre/post-meeting chats, virtual parties, and non-business communication) so that remote workers do not feel isolated. Such an opportunity can also help employees bond with their colleagues and stay connected (Ladika, 2020; Zeidner, 2020; Zielinski, 2020).
Supporting employees to obtain effective employee wellness programs: Wellness programs are often designed to keep employees physically and mentally healthy (Verhulst & DeCenzo, 2022: p. 355). These are important programs that help employees improve their physical, mental, and emotional well-being (Fournier, 2021; Sammer, 2021). It is also good to help employees bond and stay connected by inviting them to participate in wellness programs that focus on physical, mental, and emotional well-being (Ladika, 2020; McNeil, 2021).
Supporting employees to obtain the appropriate IT infrastructure and training if they are to work from home: As the number of employees working from home has increased, the need to help employees obtain the appropriate technology has also increased (Sammer, 2021; Zielinski, 2021). When remotely working employees receive the required technical support (e.g., email, dedicated work phones, instant messaging systems, and virtual office spaces) to accomplish their tasks, their job satisfaction increases, diminishing their intention to quit. Organizations need to ensure that any remote work is not hindered by a lack of appropriate technology or technological understanding (Maurer, 2021; Zielinski, 2021), which also requires organizations to allocate sufficient funds to the purchase upkeep, support, and train employees. Organizations should also revise their IT policies (Sammer, 2021).
Supporting employees to improve their awareness of the COVID-19 pandemic: Millions of Americans lack awareness of COVID-19 and put more trust in social media channels than in the scientific community and government agencies (Alonso, 2021; Chamberlain, 2021). Many employees have made false assumptions about the pandemic and the vaccine. Hence, organizations need to help their employees improve their awareness of the pandemic and vaccines by providing reliable and objective information. Organizations can invite experts to share their advice regarding the pandemic and vaccine and create open invitation internal town-hall-style meetings, where people can openly discuss their concerns or ask questions.
Supporting employees to receive proper treatment and supervision: Organizations need to consider their employees as customers. Organizations need to believe that their employees are the most critical resources that provide a competitive advantage (Gerhart & Feng, 2021) and put their employees first (create a more “employee first” environment). In the words of Vineet Neyar (as quoted by Burkus, 2017: p. 33), “profits are driven by customer loyalty, customer loyalty is driven by employee job satisfaction, and employee job satisfaction is driven by putting employees first.” This may suggest that organizations must treat their employees with respect and dignity (Hirsch, 2021; Postuma et al., 2007). Caring for employees’ well-being has a significant effect on their intention to quit (Sheather & Slattery, 2021).
Supporting employees to have a safe and healthy workplace: If employees are to be safe and healthy, they must be provided with a safe and healthy workplace. Recently, one of the factors that triggered employees’ resignation was fear of COVID-19 (Agovino, 2021; Geisler, 2021; Sheather & Slattery, 2021; Zeidner, 2020). Organizations must ensure that the Center for Disease Control (CDC) guidelines and Occupation Safety and Health Administration (OSHA) requirements related to COVID-19 are met. They also need creative and innovative ways to meet these requirements. Hence, one initiative that can minimize employee resignation is to provide a safe and healthy workplace.
Supporting employees to voice their concerns: Assisting employees to voice their concerns, opinions, and challenges can help them feel happy and have a sense of belongingness (Tyler, 2021; Zeidner, 2020), achievable when the organization has transparent and effective communication systems (Lytle, 2020). The HR team can also play a key role in supporting employees in voicing their concerns (Harbert, 2021). Providing employees with the opportunity to participate in decision-making, which affects their well-being, can also help enhance their loyalty and commitment to the organization (Carucci, 2021).
Supporting employees to get enough paid leave: The pandemic has increased employees’ challenges due to COVID isolation and quarantine of family members, mental and physical health problems, school lockdown, homeschooling, lack of daycare services, and inability to maintain work-life balance (Carucci, 2021; Zielinski, 2020). Hence, organizations need to support employees by providing them with more paid leave (Agovino, 2020; Ladika, 2020). To do so, they need to change their leave policy.
3. Implications and Conclusions of the Study
Although the workforce is an organization’s greatest asset and can make or break its success (Gerhart & Feng, 2021), they have been resigning from their jobs at a disturbingly high number in 2021. Since the pandemic began approximately two years ago, it has caused uncertainty and rapid changes in the workplace. The US has seen a record job loss (in March 2020) to an unprecedented mass migration to remote work (after March 2020) and then to “the Great Resignation” (mid-to-late-2021), which may suggest that the pandemic has upset the natural work order. The pandemic has changed the perception of rigid, traditional work schedules. It also has a profound effect on how employees work and view the traditional work environment and why they work. Organizations will never return to their pre-pandemic work situation. Organizations have two options in this “new, normal” situation: adapting or getting left behind. Organizations can compete and win during the pandemic and beyond by understanding who is resigning, why they are resigning, and properly accommodating and responding to the employee’s demands.
To minimize “the Great Resignation”, organizations need to identify the root causes of employee resignations and develop highly customized retention strategies. To develop highly customized retention strategies, organizations must create effective EVPs of the right magnitude, mix, and distinctiveness (Judge & Kammeyer-Mueller, 2022). This can be done by gathering information on employees’ preferences regarding different terms and conditions of employment. When an organization creates effective EVPs, it is better positioned to develop effective retention strategies.
This study identified the following three causes of “the Great Resignation”: the pandemic, current employee-driven labor market, and lack of effective organizational support for employees. This suggests that organizations apply the following three retention strategies, which can be effectively weather the negative effects of “the Great Resignation”. They are providing flexible work arrangements, attractive compensation (pay, benefits, and incentives), and proper support to employees. In implementing the suggested strategies, organizations need to assess both the costs and benefits of each strategy and give due attention to how many employees to retain and what kind of employees to retain. Some employees (“high-valued” employees) are worth more than others in their contributions to their organization (Krugman, 2021; Phillips, 2022), and extra efforts must be made to prevent them from resigning (Hausknecht et al., 2009).
This study does not suggest that one size fits all but rather brings some important issues to the attention of organizations and tailors the suggested strategies to their unique work environments. The suggested retention strategies can be used to identify the problem areas in which organizational actions should be directed.
If an organization has FWAs, it must have an accurate assessment, implementation, and management of FWA programs. Suppose FWAs are to provide the desired outcomes. In that case, an organization should perform at least the following five activities: 1) assessing the needs of the employee, team, and the organization by conducting a survey; 2) defining FWAs and what they mean for the organization; 3) establishing methods to keep employees connected by providing the right tools and processes; 4) focusing on the outcome to reward employees for an outcome, not output; and 5) monitoring and evaluating the effectiveness of the FWA programs.
Many current HR policies and practices lack relevance to pandemic-induced workplace changes and need to be adjusted and updated accordingly. Many components of the traditional or conventional approaches to managing employees, which were deemed effective before the pandemic, may not be effective during the pandemic or post-pandemic era. Organizations need to think outside the box and capture their employees’ hearts and minds. It has been underscored that organizations need to adjust, adapt, and change rapidly to stay relevant in a sea of uncertainty (Harbert, 2021; Tyler, 2021). Organizations must learn to adapt to address employees’ resignations in this new strong labor market while functioning well. The pandemic has increased employee demand (employee-driven market), and organizations that fail to meet employees’ demands are at risk. The suggested retention strategies also require rebuilding corporate culture (Carucci, 2021). This is because organizations that could transform their corporate culture and accommodate the demand of their workforce can weather the storm and minimize mass resignation. Thus, managers must be creative and innovative in the way they retain their employees now more than ever before.
This study argues that a single, isolated retention strategy may not effectively minimize employees’ resignations. However, combining the suggested retention strategies, which worked together, can profoundly impact minimizing employee resignations (Judge & Kammeyer-Mueller, 2022; Sammer, 2021). Our argument aligns with Gerhart and Feng’s (2021) idea that HR practices either work together as a package or fight against each other. Different retention strategies can work well together in the same organizational setting, while a mix of bits from each strategy can fall flat (Gowan, 2022). HR strategies must be integrated into a comprehensive system if organizations are to minimize employees’ resignations. The most effective tool for minimizing employee resignations is to provide integrated systems that involve careful selection (hiring employees who are less likely to resign), providing proper and adequate training, and FWAs (responding to employees’ preferences for FWAs). In addition, it should provide competitive compensation (pay, benefits, and incentives).
As previously discussed, although there are challenges in providing FWAs (e.g., difficulty in collaboration, isolation, lack of interaction, supervision problems, feelings of preferential treatment among employees, and managing client relationships), their benefits (e.g., improved recruitment and retention, enhanced employee morale and engagement, better balanced work-life, a greater sense of feeling valued, and better health) exceed. While the suggested retention strategies play an important role in minimizing employees’ resignations, they should not be perceived as a panacea to American organizations’ challenges. They cannot guarantee the elimination of employees’ resignation problems, as there are unavoidable resignations, yet failure to implement them may aggravate the prevailing employee retention problem. It also underscored that the suggested strategies are not without cost, but their benefits outweigh their costs (Geisler, 2021; Kazi & Hastwell, 2021).
The question is how to put the suggested retention strategies into effect. One way to implement the suggested retention strategies is through an approach with two components: integration and eradication. Eradication refers to eliminating some of the traditional HR practices (e.g., rigid work schedules and strict leave policies) that may impede organizational efforts to retain employees for an extended period effectively. In contrast, integration refers to assimilating new HR practices (e.g., providing FWAs and leave policies that respond to pandemic challenges) that enhance employee retention. Organizations need to determine what is conducive to implementing the suggested retention initiatives and what represents a threat to such an endeavor in their unique work setting. They need to see what works and what does not work rather than attempting to complete a change in existing retention strategies.
4. Limitations of the Study and Directions for Future Research
This study adds to the existing literature on “the Great Resignation”. It augments previous research on employees’ resignation and retention in general and “the Great Resignation”. It is a timely, relevant, and critical organizational issue. This study has merit because, unlike most previous studies, it discussed the causes and consequences of “the Great Resignation” and the strategies for improving employee retention. One of the main limitations of the current study is that it focuses on “the Great Resignation”, which has occurred in the American workplace. Therefore, the findings of this study may not be generalizable. Therefore, future research should investigate the causes and consequences of employee resignation in other parts of the world. In addition, investigating the causes and consequences of “the Great Resignation” at the organizational level (case study) can give more in-depth information or can help in improving our understanding of the causes and consequences of “the Great Resignation” at the organizational level.