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Judith Lamb, Chief Human Resources Officer, CloudPay
Many countries across the Western world, and the United States in particular, are currently experiencing one of the biggest shake-ups in the labor market for generations.
Known as ‘The Great Resignation’, it’s led to control of that labor market being seized by employees. But just as importantly, it’s giving many employers headaches as they compete to attract and retain the most talented workers available in their industries.
In this blog, we’ll explore what’s driving the Great Resignation, what it means for the future, and how payroll can play a leading role in helping companies respond to the challenge.
What is the Great Resignation and why did it happen?
The Great Resignation was sparked by the COVID-19 pandemic (although as you’ll read, that was far from the only reason it happened). Due to lockdowns and other restrictions, millions of people around the world were forced to start working remotely for several months or more, were temporarily laid off from their jobs under furlough schemes, or permanently lost their jobs due to the economic shock.
These occurrences, allied to the health ramifications of COVID-19, led many people to take stock of their lives and reassess the bigger picture. A greater priority is now being placed on work-life balance, and more people want to ‘work to live’, rather than ‘live to work’. And because of this, employees are deserting jobs that they don’t enjoy, where the work doesn’t fit in with their personal lives, or where they don’t feel respected by their employers.
The numbers behind the trend make for sobering reading if you’re an employer. In the five-month period between April and August 2021, nearly 20 million American employees either left their existing jobs or started a new one - that’s around one-eight of the entire U.S. labor force.
More recent findings by the Pew Research Center found that, while low pay and a lack of advancement opportunities are still the main reasons people leave their jobs, issues around employer respect, child care issues, benefits and flexibility aren’t far behind.
How payroll can help attract and retain talent
The scale of the Great Resignation problem means that virtually every employer is going to feel the impact of it to some extent. Quality staff are becoming a precious commodity, whether trying to attract them or keep hold of them, and so businesses have to get their employee experience right to do so. Payroll has a key role to play in enabling this across five different areas:
Basics: now more than ever, there is no excuse for businesses not getting the basics right. This includes the essentials like paying staff accurately, on time, and with full payslip information.
Flexibility: employees want more choice over where and when they work, but that’s only half the story - they want control over when and how they get paid, too. Tools like self-service payroll, on-demand pay and Earned Wage Access can give employees autonomy and control over their earnings.
Onboarding: a smooth onboarding procedure for new recruits is vital for a good employee experience - and making a good first impression. Automating data entry, enabling more self-service capabilities and putting in place processes to guarantee compliance are all things that can help iron out onboarding flaws.
Data: insights derived from payroll and HR data can be helpful to addressing issues proactively. For example, high resignation rates among employees in a particular job role, department or pay grade can highlight the areas where problems may need to be resolved.
Collaboration: payroll and HR should work together to cover every base of what’s leading people to leave, whether it’s pay-related or not. Together, the two departments can gain a good collective understanding of employee sentiment, and take co-ordinated steps to encourage better work-life balance, and support more flexible ways of working in the post-pandemic era.
In summary
Every company’s issues with the Great Resignation will be different, but in any case, payroll can make an enormous difference to how well employers can cater for changing employee needs. Whether it’s making onboarding easier, or giving employees flexibility through Earned Wage Access, payroll should be front-and-center of any good response.
Learn more about CloudPay’s global payroll solution, and how it supports better employee experiences in the new world of work, here.
Judith Lamb, Chief Human Resources Officer, CloudPay
