One of the many impacts of the Covid-19 pandemic was a workplace phenomenon called the Great Resignation – a trend that saw an exodus of employees for reasons as diverse as burnout, inflexible employers, low wages and toxic work environments.

As many as a quarter of white-collar workers in America left their jobs without alternative employment in 2021, according to research conducted by McKinsey.

Remchannel’s Salary and Wage Movement survey in the same year showed that the Great Resignation did not bypass South Africa. Here, employee turnover increased by 16% across all sectors, with 60% of those workers resigning.

Two years later, the trend shows no sign of slowing down. Our 2022 Salary and Wage Movement survey revealed that resignations accounted for 36.4% of staff turnover in April and 38.5% in October. The April 2023 report shows it has increased to 41.22% (over the period 1 January 2022 to 31 December 2022).

Financial services and ICT have been hit particularly hard by resignations, with 65,31% and 55,81% respectively.

This doesn’t bode well for companies, which rely on accumulated skills to achieve a competitive advantage in the future.

The cost of replacing employees

The “war for talent” is not new. Human-capital professionals have always had to work to acquire skilled individuals who can drive an organisation’s strategic expansion and vision.

However, it has intensified as there has been a shift in the power dynamic between companies and employees, with the latter demanding a more human-centric work environment and greater flexibility.

Employees no longer remain loyal to a company for decades, especially if the company doesn’t offer adequate remuneration, personal development and other key benefits.

This presents a challenge for human-capital professionals as it costs companies around R18.5 billion to replace employees who resign, according to the 2022 survey. The cost is not only financial – there is a loss of institutional knowledge, skills attrition and poor staff morale as the remaining employees carry an additional workload.

The role of human-capital professionals

Traditionally, human capital has been seen as a cost to company, not as a strategic partner, but this is changing as companies realise the extent to which employees contribute to the sustainability of organisations.

If company leaders recognise the value human capital brings to the organisation, it becomes easier to attract the right talent and secure the necessary skills to enable succession planning.

Human-capital professionals need to focus on retention, especially among those staff members who have been with a company for several years and who have irreplaceable skills.

It’s important to view these employees as more than a mere resource but as stakeholders with a significant share of voice – and we must ask whether we encourage people to speak up, whether we listen, and if our company is diverse enough to accommodate a range of viewpoints.

If we don’t want employees to join the Great Resignation, we must ensure they feel they’re being looked after.

The changing workplace landscape

Engagement surveys are not new, but what is different is the fact that we’re measuring things we didn’t measure before, such as psychological safety. This speaks to the mental-health crisis within the workplace.

We are also looking at more flexible benefits, for example, employees can choose what and how to contribute to their retirement. There is no longer a one-size-fits-all solution when determining an employee value proposition, which needs to be holistic.

If employees are leaving because of low remuneration, a toxic work environment, or poor leadership, it’s important to conduct exit interviews that will allow you to understand the root causes of attrition and address them proactively – and not just continue with “business as usual”.

The key role played by leadership

Companies need to change to evolve, and this invariably starts with leadership. Leaders are responsible for organisational culture, which is only driven forward by employees if the company’s purpose resonates with them.

Human resources (HR) are critical in making the link between this organisational purpose and the role played by employees. If viewed as a strategic partner, HR can help the company to identify and address some of the pain points of employees, who should be treated as human beings, not machines.

All employees should understand how their roles contribute to achieving a company’s objectives, but this depends on how the message is communicated.

If employees are disengaged – the quiet-quitting phenomenon – they won’t help the organisation to thrive, nor will they step up in times of crisis. However, leaders should take the time to understand why this is happening. Are there small compromises they could make that will help employees to feel more valued?

When we talk about leadership, we have to empower employees on the lowest rungs of the career ladder to be leaders in their own right. Only leaders with emotional intelligence (EQ) can help to create an ownership culture in the business and build the capacity of future leaders.

Confronting the challenge

All of this is easier said than done, especially in an environment in which employers report that 46% of their employees feel burnt out, 49% are no longer prepared to sacrifice their mental health, and there is a 49% increase in cases of depression, substance abuse, etc.

Survey results indicate that 37% of employees have been asked to take the place of staff members who have left the company, and 35% believe their job responsibilities are growing without adequate compensation for this. This can lead to resentment and a lack of motivation.

Although employee-assistance programmes set out to address mental-health and other challenges, companies must ensure that there isn’t a disconnect between what they offer and how readily employees feel they can speak out about these issues. Do they feel psychologically safe, or do they fear a backlash?

Success can be measured in small initiatives. Human-capital professionals should analyse which issues are most important and start to make incremental changes to demonstrate that companies really care and are prepared to create more human-centric workplaces.

These steps could help to shift the perception that organisations view their employees as mere resources that are easily replaced.

Additionally, once these initiatives have been implemented, they should be measured and monitored to ensure the desired results. This will create not only loyal employees but advocates who will speak highly of your company if they move on one day.

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