Australia facing the ‘Great Retention’, not the ‘Great Resignation’

First coined by Professor Anthony Klotz to describe the increased staff turnover experienced by businesses in 2021, the “great resignation” has since been referenced more than 232 million times online. Unfortunately, this term has widely been adopted by business leaders to blame disloyal employees rather than a catalyst to reflect on poor workplace culture. But despite the adoption of the “great resignation” globally, is this phenomenon reflected in departure data? And why should we focus on the “great retention” instead?

The “great resignation” is believed to be a result of COVID-19, with one reason being that companies inadvertently set new standards for work-life balance allowing employees to work from home en masse, followed by a wave of departures once staff were required to return to the office. However, resignation rates had been on a continuous rise pre-pandemic, and saw a drop for the first time during the pandemic.

In Australia, the proportion of employed people changing their jobs reached an all-time low of 7.6 per cent in the year leading up to February 2021 (Australian Bureau of Statistics, 2022). The number of Australians leaving their jobs fell from the pre-COVID-19 level of 9 per cent of total employment in Q1 2019, to less than7 per cent in Q1 of 2021 (CXCGlobal, Darren Morris, 2022). This percentage difference shows that in Australia, the “great resignation” was maybe not so great after all.

I believe the shift occurring within the workforce is not a “great resignation”, rather, the businesses struggling to fill these positions with great talent need to reflect on their practices to focus on a “great retention”.

People are putting their wellbeing as a first priority over their work arrangements. A recent Qualtrics survey found that around four in 10 millennials and Gen Z respondents say they’d leave their job if asked to come back to the office full time. This is further supported in a study conducted by HR firm Randstad in 2022 which indicates that 55 per cent of millennials would quit their job if they were being prevented from enjoying a balanced life.

Australia is experiencing a “great reshuffle” as described by Australia’s previous Treasurer Josh Frydenberg earlier this year. As work-life balance is preached by businesses, workers are experiencing a cultural shift and adapting as needed. So, how can businesses retain staff?

There is no doubt that the workplace is evolving. We are now seeing four-day work trends, and flexible hours and locations. This is representative of a modern working environment with benefits for employees to help balance their work and social schedules. Even as the workplace is developing and creating the new “normal”, the work still stays the same. Employers offering staff remote work, additional leave, and four-day weeks at full-time pay have a competitive advantage when it comes to the hiring process, and existing staff are less likely to move onto another company if they cannot match their current job’s offering.

I am convinced that the “great resignation” never existed. It is at best poor HR jargon to qualify many departures within a company, at worst a pretext for leadership teams to avoid robust discussions in understanding what’s important to each individual (and their family), and therefore what makes their employees remain in their position.

The challenge for business leaders is achieving the “great retention”, by continually evolving their work practices for the benefit of employees, communities, and organisations.

Lyn Mellsop is the people and culture manager at Partners Wealth Group