The Great Awakening: Competing for skilled labor in 2022

June 16, 2022
Workers in safety vests talking

With record high turnover continuing in 2022, many employers are digging deep for creative approaches to retain their skilled workers and fill open positions.

For many workers and employers, the Great Resignation has turned into the Great Awakening, explained Michelle McLaughlin White, VP of Client Management & Field Development at Colonial Life.

"Employees are reevaluating their life and priorities," said McLaughlin White. "And as a result, their work needs have shifted, forcing employers to try retention strategies they wouldn't have considered a couple years ago. Competition for skilled labor is so strong that if companies don't adapt they will get left behind."

Exit door

In 2021, 47+ million Americans voluntarily quit their jobs.

Source: U.S. Bureau of Labor Statistics, 2022.

A recent SHRM report addressed why workers were quitting their jobs last year. It showed that three of the top reasons were the same today as before the pandemic: better compensation, better work/life balance and better benefits.1

But what has changed in the COVID era — revealed two surprising reasons for workers quitting. The SHRM survey showed that 21% of workers quit because of lack of empathy by their leadership and 21% quit because of workplace culture.1 This is likely because of "Covid Clarity," explained SHRM researcher, Ragan Decker, PhD., referring to the concept of workers thinking about what they want in a job and in their lives.

Why are more U.S. workers quitting their jobs than ever before?

Top 5 reasons for quitting
Bar chart with five bars listing reasons for quitting. First bar: 32% cite better work/life balance. Second bar: 29% cite better compensation. Third bar: 25% cite better benefits. Fourth bar: 21% cite workplace culture or politics. Fifth bar: 21% cite organizational leadership lacked empathy toward employees.
Source: SHRM Research Institute, The Great Resignation: An Analysis of the Employee Experience, 2022.

What these results show is that people still care about competitive compensation and benefits packages. But for many workers these are the basics, not the differentiators. The last few years have caused many workers to reevaluate their lives and reprioritize. The challenge for employers is they also now need to create a work environment where people want to work, and one that meets the work-life balance people seek, explained McLaughlin White.

"The power has flipped," said McLaughlin White. "Workers have more employment options today. They care a lot more about how their work makes them feel. And that's about culture. Do they feel valued? Do they feel like their work has an impact? Do they believe they work for a company they can be proud of?"

Changing workplace culture isn't easy

Given the value of a healthy workplace culture in retention, organizations should be thinking about whether they are fostering a sense of belonging that is inclusive and diverse throughout the organization from leadership to the frontline workers. And if not, how to make changes that would foster a sense of belonging.

Improving workplace culture isn't something that can happen quickly. It can take several months to years to feel real change. But a company can take steps to make quick changes that workers can see with open and honest communication, explained McLaughlin White.

"You can actually talk about where you are, where you want to be and how you are going to get there," said McLaughlin White. "Follow that with meaningful action and you start to see the culture shifting slowly. And with that, you start to build trust and respect among your workers."

"When workers feel a strong sense of belonging at their organization, they are less likely to leave," said Decker, referring to the SHRM survey.

No back-up plan? No problem.

% of U.S. workers who had not accepted a new job when they quit:
24 percent icon
26 percent icon
30 percent icon

Source: SHRM Research Institute, The Great Resignation: An Analysis of the Employee Experience, 2022.

Digging deep for different approaches to retention

While unhealthy workplace culture addresses some issues with retention, it isn't the answer or the full story for all organizations experiencing record high turnover. Here are five more creative approaches to improve retention and attract new workers.

1. Stay interviews: low cost

Some companies are using a proactive approach by conducting stay interviews with their current employees. Managers engage their workers in a conversation with standard questions to gain a better understanding of why they are staying and potential reasons on why they might quit. This approach enables employers to identify issues and address them before their workers quit.

Bonus for stay interviews: managers may find that as they conduct their stay interviews they are also developing a more empathetic view toward their workers. And with more empathy, stay interviews are doing double duty to help lower the inclination for workers to quit their jobs. 

talk bubbles

In a recent SHRM employer survey, nearly a third of employers conducted stay interviews. Among those conducting stay interviews, 31% started in the last six months.

Source: SHRM Research Institute, The Great Resignation: An Analysis of the Employee Experience, 2022.

2. Benefits that support the overall wellbeing: costs vary

Employers are offering a range of new benefits. Voluntary benefits such as disability, critical illness, dental and life insurance offer workers valuable, affordable coverage that can be customized without adding costs to the bottom line. Dental insurance has become very popular in the last few years. Many employers are picking up a portion or all the premium for voluntary benefits which can help cushion the impact of out-of-pocket medical expenses.

Benefits bank: small employers on a tight budget are setting up a benefits bank with a fixed contribution amount for each worker they can use toward benefits of their choice. 

3. Looking out for blue collar, service and in-person employees 

Some of the highest employee turnover has been lower wage service, blue collar and physical type jobs that can only be done in person. For these employees, remote work has never been an option and they have had to struggle throughout the pandemic with caregiving, transportation, public health issues and furloughs. Many companies are offering flexible hours and compressed work weeks to increase retention. Other strategies include: higher starting salaries, spot bonuses and employee referral bonuses. 

4. Remote and hybrid work

For employees who can do their work remotely, more companies are using hybrid and remote schedules to increase their retention. In the past six months, 45% of employers survey have offered remote work or flexible work options.1

5. Don't forget these talent pools for recruitment

Consider tapping into these three talent pools to recruit employees:

  • Former employees who quit
  • Newly graduated students
  • Veterans

Former employees offer a potential rich source of prospective hires. Nearly a quarter of former U.S. employees who quit their last job have considered going back. Other great sources for untapped talent pools are newly graduated students and veterans.

In the past 6 months, the top three untapped talent pools organizations report recruiting from include:

53 percent icon
Newly graduated college students
42 percent icon
Former employees who quit
38 percent icon
Source: SHRM Research Institute, The Great Resignation: An Analysis of the Employee Experience, 2022.

The Great Resignation and the Great Reshuffle are reminders that effective strategies for retention and recruitment don't stay the same. In this competitive labor market, organizations that really listen to their employees and adapt to their needs will have a better chance at retaining their skilled workers and keeping them engaged than if they relied on the pre-pandemic tactics.

1. SHRM Research Institute, The Great Resignation: An Analysis of the Employee Experience, 2022.