The Great Resignation 2.0 – How Businesses Can Prep for more hiring fallout
The business blogosphere has been buzzing with its next “great” something-or-other. This time around, writers are focusing on the Great Resignation. Since COVID 19 forced millions of Americans into more flexible work setups, employees have taken advantage of a tight labor market and work-from-anywhere situations. The result has been a mass of resignations as skilled labor seeks greener pastures.
Most of us think of economic crises like hurricanes – quick, powerful events that pass by in a relatively short amount of time. Perhaps its because we’re set to the quarterly report schedule in which the next three months might paint a brighter picture. Or cognitive bias nudges us to dismiss unfavorable conditions as flash-in-the-pan anomalies.
We remember the Great Recession as a period of extreme market volatility in 2008 and 2009. But of course, the effects of the Great Recession had far-reaching and lasting impacts on American life. However much we hope for the proverbial storm to pass, some economic slumps are chronic. The Great Resignation seems to follow the same pattern. Some may see it as a brief anomaly triggered by the sudden shift to remote work in 2020. But the flap of a butterfly wing can cause a famine across the world. Volatility occurs in both corrections and rebounds. The workforce had to adapt quickly to a global pandemic. Like a stock dropping 50% in one day, it seems foolish to expect that there won’t be a countermove against remote work, a countermove that may be just as volatile as the initial swing.
At the moment, fully remote work is fresh and exciting. For all the talk of Zoom fatigue and inefficient personal time management, working from home is a brand-new phenomenon – in the history of the world. In my conversations with other remote workers, I’ve noticed that people conflate COVID 19 fatigue with remote work fatigue. There’s an underlying hope that once pandemic anxieties pass, remote work will still hold its charm.
I predict remote work’s honeymoon phase will not last. The inability to cope with remote work will trigger the Great Resignation 2.0.
In fact, I predict that remote work burnout will rattle the labor market right around the time businesses are “getting back to normal” in terms of finding and retaining skilled labor. We will have to weather a new Great Resignation, but a resignation fundamentally different than the previous iteration, i.e., the one we’re experiencing right now. The current Great Resignation seems to be rooted in a desire to embrace a new way of work. Like I said, remote work is exciting and meets personal needs that went unmet in traditional office-based engagements. But at the same time, remote work can be absolutely draining.
The Great Resignation 2.0 will happen because employees have overestimated their capacity for remote work and because employers won’t have enough time or foresight to implement a remote-centric culture that provides a sense of belonging over digital distance.
I’m the canary in the coal mine. Managers and executives would be wise to rethink their company cultures in light of remote work. It’s clear that the economy won’t revert back to 90% in-office work. But the current approach to remote work may not be sustainable either.
Let’s explore possible contributors and responses to the looming Great Resignation 2.0.
Negative Consequences of remote work
For most of history, humans have had to do their work onsite. Whether in an office, in the factory, or on business tips, work had to be done in-person in a physical location. Our cultures, habits, and expectations have formed around those contexts. But now those contexts have changed. And change is hard to handle.
Productivity Plateaus
Recent surveys show remote workers believe that they’re more productive when working from home. That may be true, but this stat may be easily exploited by upper-level management. On the one hand, productivity might mean employees can do the same amount of work in a shorter time. On the other hand, productivity might mean employees can do more work in a shorter amount of time.
There’s a good possibility that employers will interpret these productivity stats as a reason to increase workloads. If they realize that remote employees are finishing their work in six hours instead of eight, they may add more work to fill those extra hours. However, many remote employees are more productive because they look forward to using their flexible schedules for relaxation and hobbies. This extra time to recharge allows extra energy to be put into work.
If companies exploit this boost in productivity, they will see productivity plateau. Pushing even harder will cause workers to burn out and eventually resign.
The Line Between Employee and Contractor Blurs
As work moves online, more companies are hiring contractors to fill specialized positions. In my business, I fill multiple part-time roles at companies who don’t need a full-time email marketer or SEO writer. As I’ve completed long-term engagements, I’ve noticed that the lines blur between employee and contractor. I’m not just talking about companies. I also find it difficult to distinguish myself as a contractor, not an employee. I crave advancement and more responsibility. At times it would make more sense if I were “promoted” to a more strategic rather than practical role. But contractors don't really get promoted. Of course, as a contractor, I can easily find new engagements when I’ve stalled out or hit my ceiling.
Don’t think this won’t happen with employees if you treat them like contractors with static roles. If managers take a task-based approach when dealing with employees, they may place less emphasis on promotions and professional development. This likely won’t happen out of spite or laziness, but more managers will be asked to juggle both employees and contractors and it's difficult to have different communication approaches for each worker classification. At an in-office company, the manager would see the employees every day and the contractors irregularly or just online. This physical separation provides a subconscious delineation between roles. But now, if not careful, managers will begin using employees as task-oriented machines or asking contractors to start covering tasks that should be reserved for salaried employees.
In remote work, it’s difficult to maintain the aesthetics of success
What does it feel like to work at a successful company? And what does it feel like to be working toward a shared, common goal? You might think success is embodied in a corner office of a sleek, Apple-esque headquarters somewhere in Silicon Valley. Or you may think of a gold-leafed lobby of a New York skyscraper. Executives say, “I’ve made it,” when the shiny company car rolls up to the driveway. These visualizations make up the cornerstone of the corporate ladder. No one spends 40 years slaving away at a company just to change the title of “regional VP” to “VP” on their resume. No, people stay with a company because they want to experience success through offices, cars, and social status.
Achievement and success are great incentives for employees to stick with a company. However, the corner office and the company car don’t come immediately to mind when one thinks of remote work. But maybe they should if long-term retention is the goal.
Even if your company can’t afford more traditional incentives like fancy offices and cars, more thought needs to go into the logistics of social recognition. Applause can be felt in a physical conference room. The vibrations touch the body. The heart beats differently when receiving an award at a conference in front of one thousand people. Giving a thumbs up over a Zoom call isn’t’ going to foster buyin from employees and convince them to stick around.
Employees Will Experience Burnout without New jobs to try
COVID 19 fundamentally changed companies’ approaches to hiring. Stats on remote work claim that “4.7 million people were already working remotely from home before the COVID-19 pandemic.” Now, “18% of people work remotely full-time. 52% of global employees work remotely once a week, and 68% do so at least once per month.”
Eighteen percent of the workforce isn’t a fringe cohort of freelancers. Nearly one out of five people work completely from home. These numbers are also skewed toward specific industries. Accountants, software developers, and marketers are seeing disproportionate pivots toward remote work. If someone in these fields gets burnt out with remote work, where will they go?
The economy is adapting relatively well to this first Great Resignation because it’s given millions of Americans the chance to try out remote work. Like I said, remote work is fresh and exciting. But where will these people go when they burnout at these new jobs? They may switch industries completely or take much longer to reenter the workforce. Companies will lose money as they continually churn through the hiring and rehiring process.
How to Build a Remote Culture that Retains Employees
Managers and HR professionals will do well to take proactive steps to deal with the Great Resignation 2.0. I don’t expect this list of action items to be anywhere near comprehensive. But I hope these items spur conversation on how we can support a newly minted cohort of remote workers.
Focus on the how the work is helping others
In "Future-Proofing Your Organization" in the Harvard Business Review, we see that Millennials and Millennial values are reshaping the workforce.
By 2030 Millennials will make up 75% of the workforce, according to the U.S. Bureau of Labor Statistics. This generation wants it all: flexible schedules, diversity in the workplace, engagement, autonomy, and a meaningful connection with their employers… In 2017 the company’s [ServiceNow] then-CEO, John Donahoe (a former CEO of Bain), and his team set out to transform ServiceNow from a technology-and-engineering-centric organization to a people-and-customer-centric one. They started by rebranding the company, both externally and internally, as an organization dedicated to ‘making the world of work, work better for people.'
Creating a remote work culture doesn’t mean coddling work-from-home employees with treats and lazy schedules (despite what some Baby Boomers might think about Millennials). Sometimes it just means making an extra effort to share human-centric results with the team. In other words, share how the company is working in the community, post testimonials from happy customers, and include employees in conversations about mission and values.
Emphasize Work-Life Boundaries
Company owners and managers would do well to establish a clear work schedule during employee onboarding. This does not mean forcing everyone to work 9-5 under the eye of a time-tracking app. Night owls can still work at night and parents can still have breaks to pick kids up from school. But have a conversation with employees and agree on regular work hours that can be added to a team calendar so everyone is on the same page.
Next, respect that calendar. If you, the manager, are consistently putting out fires at 1 AM, then that’s on you. Your remote team is going to burn out if they’re on call 24/7. Setting reasonable deadlines also helps manage a remote team with flexible hours because success can then be measured by defined tasks, not vague “time spent around the computer.”
Leaders, surround yourself with input
Without seeing employees in the office every day, leaders may tend to become siloed in their decision making. This is related to the temptation to treat remote employees as contractors. Brainstorming sessions and watercooler conversations don’t happen as spontaneously in the virtual workplace. As a result, leaders may take up a “do-as-I-say” approach, which alienates people and makes them feel as though they have no say in the direction of the company.
Invest in the Aesthetics of success
A company that downsizes its office space can still allocate some of that budget to employee experiences. From community events to individual gifts, opportunities exist for providing tangible reminders of success and belonging. Don’t get caught up in “fancy” either. Even simple additions to an employee’s work-from-home space can up their mental state and improve productivity. Don’t forget that remote workers can burnout when working from a messy, sparse apartment flat, so provide resources to promote a clean personal space.
Here are a few ideas for promoting the aesthetics of success. See what fits in your budget.
Rent out a summer retreat center using money saved on office leases.
Send a quarterly “work-from-home” box including coffee, scented candles, and Doordash gift cards.
Offer an ergonomic stipend so that employees can order standing desks and comfortable chairs.
If you have a large number of employees across the country, set up hubs and regular meeting times so that people can meet in person.
Company cars are nice incentives even if the driver doesn’t need a special parking spot.
Add “Additional Dwelling Unit” benefits to your compensation plan to help remote workers build out nice home offices.
Remember, we’re still in the thick of the first Great Resignation. It may be months or even years before these 2.0 predictions start to manifest, and companies shouldn’t jump into a panic at the thought of even more employees resigning from their posts. But this year, spend an hour at your annual strategy meeting discussing how to support your remote workers. Whether your team is entirely remote or you only have a handful of work-from-home employees, your brand and profit goals will depend on how you treat them. In 2022, remote culture will become indistinguishable from company culture.
How will your business respond?