Harley Thomas, Finance & Accounting Partner at Sharp & Carter has delved into the hot topic of the ‘Great Resignation’ that is on the tip of everyone’s tongues for the upcoming year.
See below his take on this theory and what it could mean for you and your business.
Have you heard of the term “The Great Resignation” or “The Great Attrition”? While many are predicting the next 12 months will see a significant spike in the number of workers quitting their jobs, and consequently an increase in workforce turnover rates, our observation is that this phenomenon is already well and truly upon us in the Finance & Accounting employment market.
The closure of international borders has driven extremely tight conditions in the labour market and availability of immediately available talent. This has both coincided with, and compounded, a significant churn cycle already underway. Whereas many candidates put job searches on hold through all the uncertainty of the Covid economic downtown and prioritised the security of a stable job over the next challenge or step up, it is evident that the tide turned on this front earlier this year. The perceived risk of moving companies has dropped considerably.
With an effective backlog of these candidates reengaging with a job search, along with those who would have been in the market this year in any case, this churn cycle is being fuelled further by the tight contracting market. Whereas in more “normal” market conditions we might see 1 in 3 permanent vacancies being filled by someone currently not working, for example a talented expat, migrant or returnee from a stint overseas, this number is more like 1 in 10 now.
Put another way, this means that while ordinarily there might be a 66% chance another permanent vacancy is created when a job is filled, in this market it is more like a 90% chance. Therefore the “multiplier effect” of the churn cycle is far greater, and the chain reaction of permanent vacancies created is greater and lasts longer.
So, what does this mean for employers?
A key takeaway from our August webinar hosted by business journalist and commentator Kate Mills was that many professionals are expecting to feel, or already are feeling, less connected with the companies that employ them since Covid forced the rise of remote work. Indeed, our research shows that 58% of all employees said that the deterioration of trusted human relationships at work was their number one concern about the post-Covid workplace, with another 24% saying it was the reduction in innovation and creativity due to reduced personal interactions.
Employers need to understand that while tightness in the labour market is driving up salaries of Finance & Accounting professionals, it is a sense of connection and personal interaction many are feeling they are missing after months and months of the isolation of working from home full time. Those businesses that fail to grasp this and instead try to address the issue of staff turnover and improve retention through remuneration alone will potentially see a costly failure of this approach in the longer term.
Though not specific to the local market or Finance & Accounting function, an excellent analysis from McKinsey of what this means for businesses and how they can in fact turn the “Great Attrition” to their advantage by focusing on the factors that are really driving employee mindset and intentions can be accessed via this link.
If you are keen to understand further insights specific to your market, then please reach out to us here.