I have been chatting to a lot of HR leaders and reading a lot of articles from Australia and the US over the past few months through lockdown, and the topic that came up again and again was the “Great Resignation.” Currently creating waves in both the US and Australia, this trend is seeing masses of employees quitting their jobs in recent months and it’s already starting to hit New Zealand’s shores – with a real tsunami coming in 2022.
So, when will we see this phenomenon spike in New Zealand, and how is it likely to impact the local employment market?
What We Are Currently Seeing
In New Zealand, a recent survey of employees by HR software company, Employment Hero, reported that 48% of workers are planning to change jobs in the next year. 40% of workers are planning to search for a new job within the next six months, while 15% are already actively searching.
The NZ market is experiencing a significant shortage of candidates across all industry sectors, and organisations and recruiters are actively targeting a passive candidate market to attract talent – with a good degree of success. There will be few people that haven’t been contacted in this market. If you think your team hasn’t been called, think again.
As a result, we are seeing more vacancies being created by resignations as people choose to accept offers they can’t resist. These people then need to be replaced, and so the cycle continues.
Factors Driving the Great Resignation
It is forecasted that we will see resignations in significant numbers in the coming months. So, what are the key drivers for this trend?
Salaries and Hourly Rates
Many organisations now have embraced WFH options and flexible working, and it is becoming a standard benefit of any job these days. As a result, the question now being asked by candidates is about the salary being offered, and many know their worth with salary expectations on the rise – up to 15-20K more for the same job as compared to two years ago! Some candidates in industries that are particularly short skilled such as IT and engineering have significantly increased their expectations well beyond this level.
Travel and OEs
As we come out of COVID-19 lockdowns, become fully vaccinated and our borders open, our youth in their 20s will leave in droves as soon as travel restrictions lift. Having been starved of their OEs in recent years, they will be keen to get out there.
WFH and Flexible Working
Whilst it is becoming commonplace for most organisations to offer remote working 1-2 days per week as a result of the lockdowns, those businesses that are slow to adopt this will lose staff to roles where people can get better WFH options and flexibility.
Recently, New Zealand software company, Xero, announced a recruitment drive with all roles being available as remote ones. While employees will have to be located in a country or province where Xero has a presence and is registered for payroll, they are welcome to relocate anywhere within that. For those who opt for permanent remote work, Xero will fund up to four visits to an office each year.
As WFH policies blur the lines between home and work, many people are suffering from burnout. And with all the change, transformations and general instability people have experienced through these times – often combined with very long work hours – many are now looking to move. For some, this is simply about a change of environment, while others are looking to achieve a more manageable work/life balance.
Whatever the reason, we shouldn’t underestimate the impact of COVID-19 on our employees’ mental wellbeing and the repercussions this can have.
Workplace Vaccination Policies
Employees are starting to ask employers about what policies will be in place regarding vaccination requirements, and there are already concerns being raised from vaccinated employees who don’t want to work alongside those who are not. Whilst it is still too early for organisations to have a clear understanding of what this will look like for them, it will inevitably raise questions about how this is going to work, and may even be a rationale for leaving.
The findings from ELMO Software’s Q3 Employee Sentiment Index reveal the proportion of Australian workers uncomfortable working alongside unvaccinated colleagues has climbed to 58% from 43% in the June quarter. Vaccination passports have also been welcomed by nearly four in five Australian workers (79%). Will we see a similar pattern in NZ? We’ll soon find out.
Due to the latest lockdown, many people are reassessing what is important to them, and along with pay, flexibility and a better work/life balance, industry diversity is also becoming more of a priority to people.
In the struggle to fill jobs, many companies have finally woken up to the benefit of assessing job seekers on their attitude and core competencies, rather than their skills and experience. Now, a potential employee can come from any background and any experience. Candidates can now get their ‘dream job’ – and they are going for it!
However, this is going to be bad news for those organisations who pay below market rates, expect long or unsociable work hours or who have toxic cultures. Many candidates will be unwilling to consider these types of jobs, and consequently, talent will be tough to find.
So, when can we expect the Great Resignation to hit in significant numbers? 2022 is forecasted as the year this will kick in, and we are already seeing some of these indicators in the market. In response, more organisations are focusing on remuneration and benefits, engagement, WFH and flexible working, as well as overall talent management and retention.
2022 will be the year of the Great Resignation – that’s what the fuss is all about!
If you’d like to discuss this market trend further or learn how we can support you with finding (and holding onto) the talent your business needs, feel free to reach out to me.