Press and analysts have been talking about the Great Resignation for months. Anthony Klotz, an organizational psychologist at Texas A&M University, coined the phrase after a record 4.3 million workers left their jobs in August 2020 in America.
One might expect that this has led to a Great Hiring. However, research by Atomik on behalf of Kantata has identified that it is perhaps the “not so Great Hiring.”
In addition, it appears that the Great Sacking may follow the Great Resignation. The latest phrase which could see a change in the balance between a shortage and a surplus of workers is the Great Sacking, potentially brought about by the potential recession that we are talking about.
The impact of these trends is not just felt on employees but also the employers. Atomik surveyed 1,502 full-time employees and independent contractors in the professional services industry. It found that senior executives at professional services firms spend an incredible average of 40% of their time dealing with employee turnover. 42% spend more than 50% of their time.
Unfortunately, the survey did not have a qualitative element that surfaces what that time was spent doing. It might have highlighted whether they spent time on the retention, offboarding, recruitment, onboardings or administration around handing over projects to new consultants.
Employees want to become freelancers
The survey findings indicated that this was unlikely to change, with 43% considering going freelance. The big question is whether that is still the case despite the survey carried out only a few weeks ago. With redundancies looming, will professional services weather the storm? Will this attitude change and that 43% rise significantly?
While some of the survey results may already be dated, some findings indicate employers still need to be wary. What hasn’t changed is the desire for flexibility that contractors enjoy compared to employees. Kantata will publish the full report of its findings shortly: “The Changing Dynamics of the Modern Workforce”. The report highlights that there is a fundamental change in global workforce attitudes.
If the “Great Sacking” emerges as a new trend, it seems likely that fewer people will move to become freelancers. 43% see the greatest barrier to the shift as the lack of a steady paycheck. While that barrier may rise in the short term, the underlying desire to work as a freelancer cannot be ignored. Especially with 52% of Gen Z and millennials wanting to make the move.
Kantata CEO Michael Speranza commented: “Considering the number of full-time employees that made the jump over the past year to freelancers, and how many others are tempted to, business leaders should consider expanding their talent pool of independent contractors and investing in the technology needed to effectively integrate them into the business. Building the best team with the skill set to successfully deliver results is the utmost priority for all companies in professional services.”
What can keep employees?
The survey also asked business leaders about the reasons behind the high turnover. Compensation was only cited by 33%, with other higher factors including:
- Our healthcare benefits are not competitive – 42%
- Our PTO and vacation policy is hard to accumulate – 42%
- Our 401k benefits are not competitive – 39% (The UK equivalent is pension schemes)
- We don’t have a continuing education benefit to support professional growth – 35%
Lacking from this list, and presumably not asked, was the question of the flexibility of work hours. Other surveys have highlighted this as a key reason for resignation. Surprisingly, Atomik did not include this.
These perceptions by business leaders do not always align with their employees. While the research did not ask a matching question, it did find that 84% of employees felt that they would be more loyal to a company that invested in their professional development. The press release also states that 76% of independent contractors indicated they would like the companies they work with to provide perks such as paying for certifications, continuing education and master classes.
If you can’t keep them, can you access them via the gig economy
If employees are leaving, never to return, perhaps employers need to embrace the gig economy. Employers will need to look at independent communities of freelancers, LinkedIn and other social platforms to find a new type of probably hybrid workforce. The research highlighted that this is where employees are already looking for work.
Speranza noted: “This finding is important because it sheds light on how companies can build long-lasting relationships with freelancers instead of scrambling to find people who have requisite skill sets on a project-by-project basis. Independent contractors want to work for companies that let them perform work that they find engaging, develop new skills, and build their expertise – and they have plenty of options to choose from.”
The full report will follow in a few weeks, with Kantata also hosting a webinar with TSIA on “Staying Ahead of the Changing Dynamics of the Modern Services Workforce.” Additional findings from the survey will be released in the coming weeks, and the full report “The Changing Dynamics of the Modern Workforce” will be released in the fall.
Enterprise Times: What does this mean
These are changing times. Business leaders must also balance how they treat employees and freelancers, with both looking for additional benefits. If the Great Resignation leads to the Great Sacking, as has been suggested, there are also the issues of survivor guilt for employees and managers to deal with as well. However, the challenge for business leaders today is that they do need to retain and hire more effectively than they have been doing so. Kantata offers some of the tools that can assist PS leaders with these tasks.
Looking further forward, organisations need to prepare for a new hybrid organisation where employees and freelancers can share similar benefits such as training and flexibility. The younger generations are looking for a future where the gig economy is stronger. However, will they change their mind as they get older with mortgages and families changing their attitudes toward a regular pay packet? It will be interesting to see whether attitudes are generational or age-related.