They call it the Great Resignation. A term coined by a Texas university professor to describe the tidal wave of people in the United States quitting their jobs due to the coronavirus pandemic, as workers began to re-think where, how and why they work.
Rather than abate, as the risk from Covid diminishes in the US, the great resignation trend is worsening. A record 4.5 million workers in America quit their jobs in the latter months of 2021 as the employment market made a seismic shift from one where job hopefuls sell themselves to the company to one where the company now has to sell itself to the candidate.
As so often happens, a trend that starts in the States eventually washes up on the shores of the UK. According to MakeUK, the UK’s manufacturing labour turnover rate hit a record high of 17.6% in 2020, driven by levers such as voluntary resignation, redundancies, and dismissals. But does this really amount to a great resignation? The good news is probably not: Yet.
Dig deeper into the statistics and that figure falls by half to 8.1% when redundancies are excluded. And there are big sectoral and regional differences with automotive experiencing a 30% rise in churn compared to a 7.3% rise in basic metals manufacturing. This chimes with Yorkshire and the Humber (metals) posting the lowest manufacturing churn rate of 10.7%; and the West Midlands (closely linked to automotive) reporting the highest churn rate of 23.8%.
That said, despite record levels of employment in the UK, the number of unfilled job roles is also at a record high. Economist Hamish McRae rightly points out that: “a strong job market is a comfort. The fact that unfilled vacancies are at a record level means that this is a better time to switch jobs than most people will have ever experienced in their working lives. You can leave a job safely because you know there are a string of others out there.”
In our work with SME precision engineering firms across the UK, the ability to attract and retain talent and skills within the business is fast becoming their number one issue ( with the sudden surge in energy prices coming in a very close second). So what can they do to avoid repeating the Great Resignation impacting on their future?
Here are a top five tips drawn from our conversations with manufacturers and our own research:
Making sure your employees feel valued is more important than remuneration. Well-targeted employee communication and recognition programmes along with transparency and integrity throughout the company have been found to lead to:
While formal internal comms are vital, do not neglect the personal touch. One recent study found that 37% of employees feel most encouraged by personal recognition.
Lower turnover rates are linked to younger workforces, together with incentives recalibrated towards what workers value most today. Progressive firms like Produmax have reduced the average age of their workforce from 55 years old to 32 years old and raised the number of females in the business to 20%. They have done this by:
Generating schedules that maximise productivity and employee satisfaction is critical not only of the smooth running of a shop floor but the well-being of operatives.
Most of the companies we have spoken to are already implementing many of these simple – but sometimes challenging –- changes to the business culture.
So, given the difference in trends between the UK and the US, and the proactive response of many UK firms, perhaps what we are seeing is less of 'A great resignation', and more of what McRae calls a “great churn. Lots of people leaving jobs, but there are also lots of new and different jobs being created. Indeed, alongside the record churn, 2021 was also a record year for tech start-ups and other investments, with nearly £30bn going into technology companies, up from £11.5bn last year. A possible cause of complacency. But no reason for resignation.