Tech Trends of 2021: The Great Resignation

Hey there! We’re spending the month of December looking back at what went on in 2021. Keep an eye out for deep-dives and celebrations right here on our blog and on social media.

It’s normal for people to leave their jobs. Whether it’s because they’re feeling stuck in a company that refuses to promote them, they’re wanting to pivot to a new career path, or have decided to take a sabbatical to go back to education, people leave for all kinds of reasons.

What’s less normal is the reported mass exodus of employees in the US from their roles, to the tune of an average of 4 million workers per month. So why is this happening? And how can business leaders plan ahead and retain their employees?

What Is The Great Resignation?

The Great Resignation, as it’s being reported in the news, mostly relates to the United States job market. According to data from the Economic Policy Institute, the rate of employees quitting their jobs has been steadily on the rise since early 2020.

Hires quits and layoff rates 2000-2021
Image credit: Economic Policy Institute

This is in stark contrast to the typical patterns of hiring and firing and quitting that happens during a recession. The dip in people quitting their jobs in early 2020 is to be expected. Nobody wants to risk going without a paycheck during such uncertain times. But what’s the cause of the seemingly sudden and sharp rise since then?

It’s important to note that this is not just a phenomenon experienced in North America. Similar patterns have been observed in European countries such as the United Kingdom, Germany, Belgium, and France.

What’s Causing People to Quit Their Jobs in 2021?

The causes of the Great Resignation (also known as The Big Quit) are quite hotly debated, but the general consensus is that the events of 2020 have people rethinking their long term goals and needs. It’s almost unbearably cheesy, but ‘life is short’ and employees are starting to realize it.

If a job no longer meets the needs and expectations of employees, people are less hesitant to accept it as their lot in life. It takes a crisis to give someone a new appreciation of life, and perhaps we can view 2020 and its ongoing collateral damage as a collection of shared and personal crises. People are now more motivated to go after their dreams and to try to weave their passions into their work.

Then there’s the question of payment. Federal aid initiatives in several countries, including the US and Canada, were originally meant to be a life raft for those who lost everything, and to boost economic growth during a time of chaos. However, it’s given some employees more of a bargaining chip, especially for the younger age groups. Why would you work underpaid and living off tips as a server, when you could stay home and cash cheques from the government? Some are using this strategy to focus on their education or just to explore the different options available to them. With this financial aid available to them there’s no longer a need to take jobs they hate or that they find draining just to pay the bills. At least for the time being.

But this doesn’t fully explain the spike, and it would be lazy to suggest that it’s the sole reason. As Patricia Campos-Medina, Executive Director of The Worker Institute at Cornell University says,

“Many people say that social benefits are keeping people out of the labor market, but pandemic-linked unemployment benefits expired in September and people are still not going back. And they are not going back because wages are not going up and there are no guarantees of flexibility.”

It seems that across a variety of industries, jobs are unable to meet the expectations of the workforce. The roles are there, but applicants aren’t desperate enough to settle for them.

The Big Quit and The Tech Industry

The industries most affected by The Great Resignation in the USA are the healthcare industry and drumroll please 🥁…the technology industry! There are a few causes that we can explore.

Hybrid work, or the lack of it, could be the reason behind this rise in quitters. Some companies announced earlier this year that the compensation and benefits of some remote employees would be adjusted if they moved away from expensive city centres. Others announced that only some teams would be allowed to work from home, while others would be expected to come back into the office. It’s easy to imagine how people affected by hybrid work choices made on their behalf and out of their control would be keen to move on elsewhere.

On the topic of hybrid work, remote job roles are steadily rising in popularity. When a company announces that they’ll be moving to a fully remote working environment, this opens up their pool of potential employees. This also opens up the number of opportunities available to an individual, who no longer has to consider things like long commutes. They’re no longer bound by geographical location. When you don’t have to work at an office near your house, it allows you to shop around for something better.

It has also been reported that burnout is a leading cause of employee turnover in the industry. No one would call 2020 a psychological walk in the park, and as most of the tech industry went remote, employees found themselves continuing to work through it. Some people reported that they were actually working longer hours as the lines between home life and work life blurred. How easy is it to leave work at the end of the day when you’re using your bedroom as an office?

This may explain why so many in tech are voluntarily leaving their roles. Longer hours combined with an undesirable work environment and a potential for a salary decrease would certainly have many considering other options.

Things For Leaders to Consider in 2022

The Great Resignation is not to say that all of your employees are itching to run out of the door. But it does highlight a few areas where it’s easy for companies to slip up and lose their employees’ confidence. In 2022, you can make a conscious effort in these areas to ensure you don’t suffer the effects of The Great Resignation.

Focus on building the culture

Culture isn’t something that happens by mistake or overnight or while you’re not looking. You have to build your culture. If you want your teams to be innovative, collaborative, diverse, and safe, that’s something you need to instill in everything from hiring practices to product development processes.

It might seem like one of the last things on your to-do list after taking care of your customers and looking after the bottom line, but giving your employees a great place to work will help them to do great work.

Set a process for exit-interviews

You can’t stop people from leaving you ever, for any reason. That’s a cult, not a company! Exit interviews can help you to gather feedback on why someone is choosing to part ways. Some reasons will be unavoidable, like when people decide to start a completely new adventure or want to spend more time with family.

But if you find your employee turnover to be suspiciously high, start conducting friendly exit interviews to help you understand the causes. If you care about why users abandon your product, it stands to reason that you should care about why employees leave your company.

Make sure that they know these exit interviews will not affect things like the references they may ask for in the future, and that you just want to know how the role didn’t meet their expectations and what you can do to improve things for future and existing teammates.

Consciously plan to increase employee retention

High employee turnover impacts a business in several ways. It’s disruptive for the team’s workflow, it’s bad for culture building, and it’s expensive to keep hiring and training new employees.

Building culture is the first thing that you should do in your mission to increase retention, but there are some other steps you can take, besides making sure your compensation is competitive.

Education and skills training for employees is another great incentive for your teams. Not only does it level up their skill set, but it makes them feel valued by you. Check out our guide on why you should pay for your employees’ education.

You should also have a former process for helping your teams to climb the career ladder, to help set their expectations as well as keep things fair. Instead of handing out new job titles superfluously like candy, having a formal process helps people to understand the path they’re on.

The main takeaway from The Great Resignation for leaders in the tech industry is that you need to be taking care of your employees, now more than ever. After all, when you take care of your employees, they’ll take care of everything else!

Enjoyed the article? You may like this too: