Navigating the ‘Great Resignation’

Navigating the ‘Great Resignation’

As the ‘Great Resignation’ changes the landscape of work, SMEs must hone their recruitment processes and respond to worker needs.

Some might dismiss the ‘Great Resignation’ as just a catchy phrase, but small-medium-sized businesses (SMEs) are under no illusion about its reality.

Data from the Office for National Statistics shows that UK job vacancies hit a record 1.28 million in January to March this year, a significant rise of more than 492,000 compared to the same period in 2020, prior to the pandemic.

Research from the Chartered Institute of Personnel and Development backs this up, showing that job-to-job moves of those in employment have hit a record 3.2 per cent in mid-2021.

Although the Covid-19 pandemic may have been a once-in-a-generation event, the schism it and its subsequent lockdowns created appears to have fundamentally changed the world of work.

This means that even though SMEs are dealing with a host of pressures, such as rising inflation and global political uncertainty, they need to think about how to recruit the right staff and create a culture that means their existing employees feel a greater sense of belonging.

Getting hiring right

Just as the demands of employees have changed, the way companies recruit also needs to shift.

The rising importance of soft skills, such as clear communication, and an alignment between worker and employer values, means that if companies want to retain staff for longer, they need to hire the right people in the first place.

Khyati Sundaram, chief executive of Applied, has helped the likes of global children’s charity Unicef, PepsiCo, Comic Relief, publisher HarperCollins and even the UK government hire employees using a skills-based approach.

“The traditional hiring process might involve four or five steps, such as looking over a CV, progressing onto a phone call if the candidate has the ‘right’ experience or education, then meeting a hiring manager and lastly their potential boss,” she says.

“But a lot of these processes are not predicated on finding the right data, or trying to understand what success actually looks like.”

Khyati says her process involves removing things like a candidate’s name or where they went to school, as there’s “decades of academic research that shows that none of those things are relevant as to whether the person can do the job or not”.

Candidates hired by firms using Applied’s process seem to stick around for longer, with 93% of its hires still in their role after a year, down only marginally to 87% after two years. Their first-year turnover rate of 7% is nearly three times better than the 20% UK average.

“In the current situation, where everyone is under duress and firms need seats filled as of yesterday, the problems can become compounded by not testing for everything you should be testing for when hiring people,” she adds.

“We ask all our companies to test for mission alignment, to find people that are true to your goals and share your values, because if they don’t then they are not the right fit, even if they’re willing to work hard and fit all the other skills. Firms can find the skills they need far more easily than those whose mission aligns with their own.”

Brand and values are key

It’s vital for firms to be clear about what their organisations are trying to achieve – particularly given the rising importance being placed on sustainable and ethical practices by all stakeholders – as well as what their workplace culture does and does not accommodate.

With almost seven in 10 UK employees (69%) in a Randstad survey saying they feel confident about moving to a new job – a figure higher within construction, tech and logistics - it’s imperative that businesses have clear policies in place on issues such as remote and flexible working, and work-life balance. Doing this means that employees know what to expect, and having clear lines of communication can help workers navigate specific issues with their managers.

Research by Oxford Economics found that it takes recently hired professional workers 28 weeks to reach optimum productivity, which has an attached cost of £25,200 per employee, and with pressure on all firms from rising energy costs and supply chain stresses, this is something few will want to bear repeatedly, if at all.

With the cost-of-living squeeze creating fears among households about their financial security, and Russia’s war with Ukraine creating uncertainty for the global economy, it might be tempting for SME owners to think that their workers will stay put regardless in the short-term.

Periods of economic stress can cause what the CIPD calls a ‘great suppression’, where a slowdown causes a chilling effect on job switching, but the Covid-19 pandemic has made many people reassess what they want from their work, and they increasingly require their employer to fit with them as a person.

As Khyati says, it remains a candidate’s market, and with a broad consensus that changes have fundamentally occurred in how we work and what work means within our lives, employers – and SMEs in particular – need to be conscious of their image and brand.

“People are voting with their feet when the values of the company they work for no longer coincide with their own,” she says.