Great Resignation o Great Migration?

Originally invented by Anthony Klotz in May 2021, the Great Resignation describes a record wave of people leaving their jobs during the Covid-19 pandemic. In particular, Klotz predicted an increase in the number of resigning employees at the end of the pandemic. The phenomenon is very real: in the US, more than 3.4% of workers leave their jobs each month. In 2021, we have already seen several record waves. The United States, in particular, recorded an impressive number of resignations in April 2021, only to break that record again in July and again in August [1]. But, looking at the employment data, this does not mean that people are leaving their jobs and joining the inactive group.

For this reason, we think it is more accurate to call it the Great Migration, as several authors have already started to define the phenomenon [2], or The Great Talent Migration, as defined by Benjamin Laker [3]. Workers who decide to leave their jobs do not do so in order to temporarily or permanently withdraw from the labor market: some look for a job that better reflects their needs, others decide to become self-employed. Again, the numbers are especially evident in the United States: 10 million Americans say they are considering a career as a freelancer as an option to work as flexibly as possible; these 10 million people represent a potential increase in self-employed workers of 17% compared to 2019 – quite a significant increase.

The pandemic is only one of the causes: workers, who have become accustomed to greater flexibility and autonomy in their working conditions, are abandoning jobs in companies that have not fully adapted to their new needs, for others that allow them to better balance work and private life, or to become self-employed. According to research by Upwork [4], of all the professions that used to work entirely remotely during the most critical phases of the pandemic, 25% have returned to office work and another 38% will return to the office in the medium term. Professionals are not happy: 34% of workers who had become accustomed to remote working say they are unhappy with a return to the office, 24% would even be willing to accept a pay cut to return to working from home, and another 35% might consider it.

There are two possible ways of adapting to this new scenario: reducing attrition and aiming to increase retention, or fully adapting to the new working environment on the one hand by adjusting one’s personnel management methods to respond to a structurally higher turnover and on the other by becoming more flexible in the way skills are acquired on the market, by adopting flexible talent models [9], i.e. models involving the integration into business processes of the skills of resources from outside the company whose collaboration is not subject to a contract of employment (ranging from the outsourcing of micro-tasks to on-demand freelancers accessible via digital platforms to long-term collaborations with VAT-registered professionals).

To be able to act on retaining talents, it is essential to maintain a focus on employees’ needs and their degree of motivation for the work they do, in order to be ready to intervene before the person’s willingness to seek (and eventually accept) a new job offer. Today, more than ever before, understanding and monitoring information and metrics representing the needs of the workforce is one of the main tools with which HR and managers can improve corporate employer branding strategies (both for the internal population and for the market of possible candidates).  There is a wide range of qualitative and quantitative analyses on the subject, but the starting point is the ability to synthesize and schematize the typical complexity and variety of corporate populations.

Adapting to an increase in internal turnover means accepting a reduction in the average time employees stay with the company and acting accordingly to reduce the organizational “trauma” of departures. For example,  it may be useful to exploit available predictive people analytics to calculate the probability of exit of current employees; integrating this information into the input of workforce planning processes could, for instance, bring to light the need to anticipate screening activities on certain positions with a high probability of remaining unfilled. Constant and in-depth monitoring of staff competencies also makes it possible to quickly identify which organizational operations are most threatened by the professional decisions of individuals, allowing action to be taken in advance to capitalize on and depersonalize the most critical competencies through continuous and widespread training and the continuous monitoring and updating of corporate knowledge management methods and tools.

Flexible talent models, on the other hand, have many advantages: first of all, they allow for agile scaling, both positive and negative, by accommodating the variability of labor demand. Staffing on demand, in fact, is mentioned by the seminal Exponential Organization [10] in its model as one of the factors that characterize companies capable of navigating the future. Secondly, flexible talent management models allow for the outsourcing of single tasks, whereas hiring a full-time equivalent would not be justified against the direct and indirect costs incurred by a traditional working arrangement, and would also contribute to slowing down the project(s). Moreover, especially for highly qualified professionals, turning to external resources gives access to innovative skill sets that are always up-to-date with the latest market needs.

It is useful to stress, however, that the adoption of flexible talent models requires prior assessment.

The first one concerns the nature and characteristics of the activities to be managed. Possible aspects to be considered when assessing which activities to entrust to internal resources and which to external resources concern the gap of available competencies compared to those required by the specific task or project, the degree of customization/specificity of the task or project to be carried out and the consequent complexity in formalizing the requirements to be communicated, and more generally all the direct and indirect transaction costs associated with collaboration; indirect costs include, in particular, those related to the onboarding and management of external resources (directly proportional to the degree of knowledge and interaction with internal structures required by the activity) and the assessment of risks in terms of safety at work, GDPR and/or intellectual property (including the related bureaucratic and administrative management). Secondly, it is important to define the organization (roles, processes, and technologies) to be built and nurtured for the initiative to be successful.

The adoption of external professionals entails significant changes to the selection processes, whose responsibilities may require dedicated roles and/or not exclusively linked to the HR perimeter (for example, the internal referents of the activity may have more autonomy in the procurement of the required skills through the allocation of dedicated budgets for the activity, thus reducing the time dedicated to the internal communication of the need). It is necessary to rethink the methods of onboarding and engagement through the standardization and digitalization of these processes to ensure their effectiveness in a very short time.

The working methods and technologies used may need to be updated/reviewed in order to adequately support the inclusion of outsiders’ activities in operational procedures (e.g. the adoption of effective tools for remote collaboration or agile procedures in project management).

Francesca Guzzetti, Giulio Ottaviano