Employees are preparing to quit their jobs in droves after “falling out of touch” with their employers during the pandemic – with IT staff even more likely to walk.
Research by HR software firm Personio found that four in ten employees (38%) in the UK and Ireland were planning to change roles in the next six to 12 months or once the economy had stabilized – rising to 55% of 18-34 year olds.
The research, which quizzed 500 HR decision makers and more than 2,000 workers, warned of a “post-pandemic talent exodus” that could cost businesses up to £17 billion (US $23.9bn).
Tech workers were even more likely to be eyeing a career change, with 58% of respondents in IT and computing roles saying they were considering a new role.
Personio also found that, while almost half (45%) of employers were worried about post-pandemic resignations, few were looking to make talent retention a priority for their organization – leaving them “sleepwalking” towards a costly talent exit.
Hanno Renner, co-founder and CEO of Personio, said: “The last year has been a challenging one for businesses and HR teams who have often found themselves ‘firefighting’, dealing with multiple new tasks and concerns. For some, this has caused other areas such as people strategy to fall to the wayside – but this negligence comes at a cost.
“Falling out of touch with the workforce’s problems and priorities means that not only could people be more frustrated and ready to resign, but employers will be poorly prepared to prevent people leaving – resulting in lost talent and productivity, and damaged employer brand.”
A fraught tech talent market
Mass resignations of top technology talent could be catastrophic for businesses at a time when many are trying to fast-forward digital transformation initiatives.
The COVID-19 pandemic has sparked a flurry of competition for developers and software professionals, with previous research indicating that many companies will struggle to hire and retain skilled technology staff.
Bev White, CEO of recruiter Harvey Nash Group, said tech professionals were beginning to weigh up their futures as pandemic restrictions eased – posing a retention challenge for businesses.
“In the last few weeks, we have not only experienced a surge in new tech jobs – up over 100% on the previous year – but we are also seeing a strong demand from a wide range of candidates including those that have worked for their employer throughout the pandemic, but now have different priorities,” White told TechRepublic.
Technology remains a predominant theme in the conversation around remote work, as well as a persistent source of frustration for employees working from home.
The pandemic may have accelerated the use of digital tools that, in many ways, have made our lives easier, but the sudden and mandatory switch to remote working has also had consequences for employee performance and wellbeing.
Almost half (44%) of HR decision makers surveyed by Personio reported an increase in the number of digital tools they used during the pandemic. In all, researchers found that companies were using an average of six different tools for people-related tasks and insights alone – rising to eight in larger organizations.
Staff have also seen an increase in the number of digital tools they’re using to carry out day-to-day work, leaving many feeling overwhelmed. Over a third of employees (37%) said there were “too many digital tools to use at work”, with 36% reporting a negative impact on their productivity as a result.
Despite the very real threat of staff leaving for new pastures as the economy strengthens, Personio researchers found that only 26% of HR decision makers cited talent retention as a priority for their organization over the next 12 months.
Aidan Donnelly, director of technology platform at Personio, warned that employers would feel the sting of resignations more acutely at a time when tech has rocketed to the top of investment agendas.
“Businesses should be aware that the loss of tech talent and subsequent need to recruit and onboard new hires is time consuming and expensive. This can be disruptive to businesses at a time when many are investing in digital transformation plans, or growing as technology providers,” Donnelly told TechRepublic.
“To prevent tech talent leaving, and protect their business, employers need to take time to speak to employees to understand their challenges and needs – and address these accordingly. Ultimately, this is the whole business’s responsibility, and management and leaders should be leading the way in opening these conversations and bridging any gaps.”
A growing disconnect
The switch to remote working makes managing employees and sustaining workplace culture particularly challenging.
Many employees have been left feeling untethered after spending months working from home, with progression opportunities and career development seemingly grinding to a halt.
For employees looking elsewhere, Personio found that the most influential factors were a lack of career progression opportunities (29%) and a perceived lack of appreciation for the work they do (29%). This was followed by poor management (25%), a pay freeze or cut (23%), and boredom with their job (23%).
The research also identified a disconnect between what employers felt would cause staff to quit and the reality. In particular, employers were found to “drastically underestimate” the impact of a toxic workplace culture on employees’ decisions to leave, with almost twice as many employees (21%) citing this as a significant push factor than HR leaders (12%).
HR decision makers also underestimated the influence that a lack of progression opportunities and a lack of appreciation had on workers’ decisions to quit, with just 17% and 15% identifying these as significant push factors, respectively.
Personio found that that employers were likely to feel they had supported teams better than employees felt they had, which it said was “indicative of a broader disconnect that could be contributing to a lack of loyalty amongst employees”.
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HR leaders were more than twice as likely as staff to rate their company’s support for career development as ‘good’ (64% vs 30%), and more likely to view its support for work/life balance (70% vs 53%) and mental and physical wellbeing (68% vs 44%) favorably.
This optimism amongst employers could be blinding them to a “looming productivity drought”, researchers said.
While some reports have suggested that remote work has led to an uptick in employee productivity – at least, at the start of the COVID-19 pandemic – Personio found that the proportion of employees who felt their productivity had increased over the past year was roughly equal to those who believed their productivity had fallen.
Again, HR professionals were more likely to be optimistic with their reporting: 52% said they noticed an increase in staff productivity since the start of the pandemic, compared to 33% who’d noticed a decrease.
“This optimism could pose a risk; if employers don’t recognise that a productivity drought is occurring, they’re less likely to take steps to address it – and this could cost them dearly,” the researchers said.
The value of flexible working
A growing impetus for workers’ career decisions is the offer of flexible-working arrangements.
Harvey Nash’s 2021 Technology and Talent Study revealed that work location and remote working had become one of the top three most important factors for tech professionals when looking for a new job, with strong culture and leadership also ranking highly.
White said that providing a flexible mix of remote working and time spent in the office could represent “the best of both worlds for individuals and employers alike,” by helping to foster the strong and supportive culture that many employees desire following the events of 2020.
“Getting this right could be the key for organisations in retaining talent under threat – while for hiring managers looking to attract new people, demonstrating that their business is aligned with the new deal concept could send out a powerful message that helps them capture the interest of the tech professionals they need,” said White.
How employees handle a return to offices could also make or break employees’ decision to quit, said Ross Seychell, chief people officer at Personio.
“It’s not surprising that people are looking to move roles as the economy improves, as many people have stayed put and put job changes on hold while the labour market was more uncertain,” said Seychell.
“As the economy recovers and people have more confidence in the job market, not only will people have more opportunity and confidence to leave their jobs for pastures new, but burnout and frustration with lack of employer support during the pandemic may push them out the door… At a time when employees are ready to walk, any change that’s poorly managed could risk setting off a raft of resignations.”