Great Resignation stifles economic recovery of mid-market

As job vacancies continue to hit new highs in the UK, new research suggests the so-called ‘Great Resignation’ is holding back the economic recovery of mid-market businesses.

Following two years of home-working and public health measures amid the global pandemic, many members of the workforce have re-evaluated what they expect from employers. After a period in which their work – and their willingness to make sacrifices – have been shown so overtly to be crucial for the success of their employers, many workers are now substantially less willing to settle for ‘business as usual.’

As a result, job vacancies in the UK are reaching a record high, while new research from Grant Thornton finds that of 600+ mid-sized businesses, 63% of those surveyed are experiencing unusually high attrition rates.

With more people leaving their business than normal, they are increasingly concerned that the shifting sands of the labour market will impact their ability to bounce back from the Covid-19 recession – especially as they are also struggling to attract new talent.

Of the businesses polled, 50% were struggling to recruit new people to replace the talent being lost, while 53% were having difficulty filling new roles to support their growth. As firms look to secure their operations in this new war for talent, they are having to drastically overhaul their onboarding strategies.

Justin Rix, Partner and Head of People Advisory at Grant Thornton, commented, “With job vacancies reaching record highs, the ‘Great Resignation’ has made the fight for talent amongst organisations fierce. Many companies are experiencing unusually high staff turnover rates and struggling to recruit to fill their available roles. As our research shows, mid-sized businesses are doing all they can to attract new people but the last two years have had a significant impact on what people prioritise from a job, resulting in some re-thinking their career path or role.”

Many mid-sized businesses have already made big concessions when it comes to attracting new workers, and retaining existing employees. A 62% majority are offering higher salaries for new roles, while 63% confirmed they are offering pay rises or bonuses to help retain their existing people. However, effectively competing in the talent market also requires looking beyond just salary, Rix warned.

He continued, “Job seekers now consider a much broader picture when deciding where they want to work and a company’s overall employer brand and offering has never been more important. While salary and benefits will always be high priority, people also now place much more importance on other aspects of the employee proposition such as the long-term development opportunities, the workplace culture, an employer’s focus on wellbeing and inclusion and diversity, to name just a few.”

Indeed, Grant Thornton found that jobseekers are increasingly taking the wider employee offering into consideration – something that the mid-market is having to respond to. For example, 64% of respondents now offer flexible working opportunities as standard and the same number also currently reviewing their employee benefits package to make it more competitive – and 59% said they would be likely to trial a four-day working week, in line with the current pilot in the UK, in their business – an attitude which Rix asserted will be key.

“The rise in hybrid working has allowed people to achieve a better work-life balance, while still providing the opportunity for collaboration and human connection in the office environment,” he concluded. “Employers who can offer this continued flexibility will be much better placed than those who don’t. The fundamental change to ways of working also means that it’s more important than ever for organisations to ensure they have effective people managers. The old adage that people leave their manager, not their employer, is still often the case.”