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Catch 22: The Great Resignation

BusinessCatch 22: The Great Resignation

‘An organization, no matter how well designed, is only as good as the people who live and work in it.’

One of the myriad ways in which the pandemic left its indelible mark on the economy was the widespread phenomena of individuals quitting their jobs due to a collective workforce burnout. According to the US Labour Department, almost 48 million workers quit in 2021. Labour market in Asia too failed to dodge this trend. Attrition rates in India increased to a two-decade high of 21% in 2021, with the majority of Indian employees currently intending to resign from their jobs within the next six months. Malaysia, Indonesia, Philippines and Thailand also observed a higher turnover rate, especially at the mid-career level. The Chinese have been giving work second priority since Covid-19 surfaced. Research shows that 86% of Singapore’s office workers have added responsibilities, resultant of the crisis. Contrary to focusing solely on business and workforce challenges, the focus has switched to personal pace and relationship decisions. At the same time, firms are now demanding technologies like automation to help reduce mundane work and increase productivity.

The Gig Economy
As more Americans quit their employment, there is a belief that the gig economy will flourish. The quickest way to replace departing employees is deploying gig workers in previously full-time positions. As a result, there is a growing demand for freelancers. Asia on the other hand, has the ages-long culture of stability, predictability and order, wherein gig-work is not considered real work. Unlike most of its Asian peers, India is the 5th-largest flexi-staffer in the world, after the US, China, Brazil and Japan. According to research by the Boston Consulting Group, nearly 15 million workers in India are employed as gig workers, with this number rising to 24 million in the medium run and 90 million in the long run. Even the Central government is focusing on training government officials on technological development, emerging forms of employment, gig workers’ rights and labour protection laws.

Four Day Work-Week
Flexibility and wellness are key for workers these days. In the post-pandemic world, two-thirds of job seekers are hunting for work-life balance in their new job. 60% Indians are willing to sacrifice salary, bonuses, or promotion for improved well-being & mental health. With this in mind, firms internationally are contemplating the idea of a four-day work week; that is getting paid 100% for 80% of the work. As thousands of workers in the United Kingdom are testing out a four-day workweek as part of a pilot program, companies in the USA are experiencing a push from employees to consider the same. With new labour laws in India set to apply from July 1, the Indian workforce is wondering if companies here will opt for this work module. After all, the Centre has been designing new labour codes with significant changes in employee’s salary, PF contributions and working hours.

The Tech Industry
The IT sector has also been a victim of greater turnover rates as a result of workspace frustration. Only 16% of IT workers ages 19 to 29 plan to stick with their current roles, versus 48% of workers in the 50- to 70-year-old segment, as per a Gartner survey. The Great Resignation has increased the gap between supply and demand for tech professionals, compelling firms to use strong incentives to hire as many as they can. A study by SAP SE has found nine in ten small and medium-sized enterprises in Asia Pacific and Japan say workforce volatility has directly impacted their digital transformation plans. It is surprising that Indian IT companies are on a hiring spree despite the global downturn. More than half of employees leaving start-ups are getting absorbed by IT companies, consulting and product companies and global captive centres. In response to a decrease in the attrition percentage and the total heads for the first quarter of 2022, TCS and Infosys hired 1,00,000 and 85,000 freshers respectively in the financial year 2022.

Gender Diversity
In March of this year, the number of unfilled jobs in the United States reached an all-time high of 11.5 million. This has resulted in workforce shortages that are affecting supply chains, causing firms to rethink their recruitment and retention strategies. This involves a greater emphasis on bridging the gender gap in the workplace. According to Deloitte Global, women will make up 33% of the workforce at global technology enterprises in 2022, up 2% from 2019; this represents significant development in the sector. To halt the rampant attrition rates, firms need to help women maintain a positive work-life balance by providing on-site childcare, which most men and women report supporting.

New Age Technologies
The issue of poor team communication worsened after the outbreak. A robust community culture where people enjoy connecting with their co-workers is essential for a collaborative team. Gamification can assist leaders in building and maintaining this culture. In the workplace, gamification simply entails identifying the goals to be achieved, adhering to the established standards and suitably rewarding when the said objectives are met. This keeps employees engaged and connected.
While the Great Resignation presents opportunities to the working class to upskill, dip their toes in new territories and upgrade to better positions with a pay hike, it means added pressure and costs for firms worldwide. This trend has brought to light the neglected idea that people matter and it is them who make up the organisation and not the other way round. The solution is to incentivise loyalty, cultivate a culture of growth, personal development and embrace flexibility.
(Rajesh Mehta is a leading consultant and columnist working on Market Entry, Innovation & Public Policy. Shanayaa Saumya Suneja is a researcher.)

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