By now, you’ve likely heard of the Great Resignation. The term has recently dominated news headlines, as it’s impacting the American workforce across virtually every industry. The ongoing COVID-19 pandemic sparked a seismic shift in existing workplaces and will certainly play a distinct role in the future of work.
While it seems as though the Great Resignation is negatively impacting various companies in specific industries, it’s fueling growth for startups and small businesses (SMBs). Here’s how this phenomenon proves beneficial for small, nascent companies.
Exploring and understanding the Great Resignation
It’s critical to take a step back and learn more about the Great Resignation to understand how it’s impacting large companies and emerging startups.
The U.S. Bureau of Labor Statistics (BLS) tells us that in November of 2021 alone, 4.5 million Americans quit their jobs for various reasons. The total number of resignations remained abnormally high over the past several months. As we enter 2022, it’s easier to see how the Great Resignation impacts all types of businesses.
More employees are thinking about why, how and where they work. Business leaders have faced unprecedented challenges as more of their employees take time to reflect and decide to leave the organization.
Some people feel the negative effects of burnout, which the Mayo Clinic describes as a special type of work-related stress. Burnout is becoming more common within many organizations after months of remote work and busy schedules.
It’s important to recognize that burnout is not the only factor fueling the Great Resignation. Here are some other common reasons why more Americans are leaving their jobs:
- Workers are concerned about being exposed to or contracting COVID-19.
- Employees are unsatisfied with their company due to unsatisfactory pay, flexibility, scheduling and working conditions.
- People are living off government stimulus checks or generous unemployment benefits.
- Parents are facing challenges over finding viable child care.
- Employees are reflecting on their professional careers and opting to work in other industries aligned with their interests or passions.
Of course, every individual has a unique set of circumstances driving their decision to resign. Due to this widespread phenomenon, many employees are now reconsidering what they want out of their professional lives.
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What do post-pandemic employees want?
McKinsey & Co. recently performed a study regarding the future of work and what employees value in a post-pandemic world. Here are some of the critical conditions employers must meet if they want to recruit, hire and retain top talent to benefit their business.
Work-life balance
Achieving a work-life balance is something many employers are now prioritizing for their employees. This may mean more paid time off (PTO), scheduling flexibility or additional work holidays being added.
According to McKinsey’s report, more than half of employees surveyed also want flexible, hybrid-virtual working models. In other words, people would prefer toggling between remote and in-office work. Working at home offers productivity benefits to employees and employers, so it’s something that startups, SMBs and large corporations should consider.
Clear company vision
Employees in the survey said that a lack of clarity regarding company policies and procedures could make them feel anxious.
Employers need to communicate a strong company vision to avoid confusing employees. Being clear about performance expectations is crucial in the post-pandemic workplace.
Flexibility
People that do not have the opportunity to work from home may be more willing to resign from a company. It’s critical to allow employees the flexibility to choose their work location, depending on varying circumstances.
Some employees in the study reported that they would consider switching to a new organization if their employer transitioned to full-time, in-office work.
Focus on mental health
The pandemic has significantly impacted many employees’ well-being and mental health. In one study by Arizona State University, the World Economic Forum and the Rockefeller Foundation, 50% of employers reported an increase in the use of available company resources related to mental health since the beginning of the worldwide pandemic.
We now know more about the Great Resignation, its impact and what employees value in the post-pandemic workplace. How are startups using it as an opportunity, not a challenge that needs to be overcome?
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How startups and small businesses are benefiting
Here’s how and why startups and SMBs have turned the Great Resignation into a golden opportunity to succeed.
1. Freelancing and contracting in the gig economy
Anyone paying attention to American workforce trends knows that the number of freelancers and independent contractors is rising. Another study from McKinsey surveyed 800 business executives and found that 70% of them planned on increasing their dependence on freelancers.
As more people resign from corporate roles, it’s helping form a gig economy consisting of freelancers, solopreneurs and independent contractors.
The gig economy works well for startups, especially if these smaller businesses leverage the latest digital technologies to improve their operations. Gig workers do not expect office space, benefits, company equipment or other work-related perks. This can help get startups up and running.
2. An increase in remote work opens up hiring opportunities
Employees quitting during this time are being referred to as “Resignationers.” Nascent businesses are more likely to look closer at workplace trends than their competitors because they desire to hire skilled, qualified workers to fuel business growth and perform well.
Take the trades sector, for example. More jobs are available in the trades than ever before, including HVAC workers, plumbers and electricians. Startups can capitalize on these trends in other sectors to attract Resignationers — small businesses should consider looking at candidates interested in making an industry switch.
3. Benefits large corporations won’t offer
Offering an attractive benefits package to potential employees has been an ongoing challenge for small businesses without the same capital as larger, more established companies.
However, some HR providers, such as TriNet, Gusto and Zenefits, are helping startups and SMBs offer quality benefits to their current and potential employees.
SMBs are banking on better benefits to help their recruiting efforts. Those who offer work-from-home options and scheduling flexibility will likely outperform competitors. Startups and SMBs are focusing on well-being, flexibility and work-life balance to help them during the Great Resignation.
4. Large companies are outsourcing talent management to startups
One sector where small businesses are thriving is the talent-management industry. Large corporations, such as Unilever and Seagate, are hiring talent-management startups like Gloat to handle all their recruitment needs.
Startups emerging in the talent management or human resources sector will likely work closely with larger corporations to help combat the Great Resignation.
There’s no doubt that startups have a lot of opportunities during this shift in the way we work. It’ll be fascinating to see how SMBs and startups continue to navigate this unusual time. Still, they do have some advantages over their larger competitors.
Startups will continue to rebuild the American economy
More remote opportunities, large companies outsourcing hiring, the availability of quality benefits and capitalizing on the gig economy are the main factors contributing to why startups and SMBs are succeeding during the Great Resignation. More small companies are emerging in various industries, which will likely continue. It’ll be crucial for new businesses to meet changing employee expectations in the future to remain competitive and succeed in their endeavors.
