Photo: Valuing incentives and creating a shared sense of purpose: this is how Spanish CEOs are fighting the Great Resignation. Credit: Shutterstock.
By Sergio López García
Has the Great Resignation phenomenon arrived in Spain? Recently, there have been reports of unfilled vacancies across all sectors and training levels: there is a shortage of talent in the tech sector, there are no industrial workers to be found, there is a lack of skilled labor in construction and hoteliers estimate that they need an extra 50,000 waiters for the summer season and are not managing to find them. At the same time, the number of employees resigning has doubled in the last year.
According to Social Security enrollment statistics, the monthly number of voluntary resignations has been consistently rising throughout 2021. So far in 2022, it has risen from around 2,000 at the beginning of that year to over 4,000 in March. This figure is obviously a far cry from the nearly 48 million people who resigned in the United States in 2021, according to data from the U.S. Bureau of Labor Statistics (and which gave this phenomenon its name), but the data point to an emerging phenomenon in our country.
The search for personal goals, the need to connect more with loved ones, burn out, disengagement with company values or the pursuit for a purpose more in line with individual ideals are some of the suggested causes to explain the wave of voluntary resignations in the United States. Although this phenomenon has not yet impacted Spain with the same intensity, it is beginning to be considered a concern among managers who see high turnover as a barrier to retaining talent.
This is made clear in the report The Great Resignation: Keys to Attracting, Retaining and Winning the Battle for Talent, published by Antonio Núñez, partner at Paragon Partners; Jose Ramón Pin, Professor at IESE Business School; and Elena Rodríguez Vera, Director of Opinno's Madrid office. This study, which seeks to shed light on the causes of this trend and help CEOs, HR managers and others to tackle it, is based on an ambitious survey sent to more than 2,400 senior executives to test their impressions and find out what measures their companies are taking to attract, manage and retain talent.
Resignations on the rise, but for justified reasons
According to the report, the reasons for leaving a job are still mainly work-related. Personal reasons are gaining in strength, according to the perception of the managers surveyed; but at the same time, it is clear that in Spain most job resignations do not take place without a justified reason. Some 47.7% of the managers surveyed said they had detected occasional cases of unjustified resignations and 17.4% said they had recorded a few cases, but not reaching 10% of their workforce. The vast majority, 67.7%, acknowledge that former employees who have left their companies have done so because “they have found a position with better conditions”.
In any case, what is clear is that more and more workers seem to be determined to start a new career path. Faced with this prospect, only 15% of managers say they are not at all concerned about staff turnover. In contrast, a third of those surveyed say that they are detecting more (24.3%) or much more (9.2%) turnover than in previous years, and about half are concerned about this aspect.
To identify the causes of this situation and to address it, companies have a number of tools at their disposal. The most common, according to the answers given, are periodic evaluations to measure employee satisfaction: 50.5% do them annually, 20.6% every six months and 10.1% do monthly evaluations.
Beyond this 'classic' measure, organizations are reacting in a variety of 'innovative' ways to identify employee dissatisfaction and offer incentives to attract and retain talent. The common feature of these initiatives is a new corporate culture in which the values and purpose of the organization become more important and incentives are better managed.
Plans to avoid employee turnover
Regarding staff turnover in key positions, 60% of respondents say that their companies already take concrete retention measures to prevent talent drain. 32.1% of respondents say that this issue takes up “a lot of time” at Management Committee meetings, while 21.1% say the same for Boards of Directors.
A total of 73.4% of those surveyed said that their organizations have a talent retention plan, although 29.8% of them confessed that it is not a formal plan. Almost half of the companies have a specific figure to ensure the employee's experience and value proposition, but only 5.5% of the companies that do have this figure have a specific budget for it.
And, of course, if anything has become evident with the phenomenon of the Great Resignation and the resignation of some key professionals within organizations, it has been the importance of having a Succession Plan. This type of plan makes it possible to stay ahead of the potential departure of talent. Its use is widespread, but it has not yet reached all organizations.
In this regard, most of the CEOs surveyed say that they have some kind of initiative of this type. Almost half of them have a defined succession plan (47.7%), while 25% have one, without being “somewhat formal”, and the remaining 26.6% do not have any type of planning for this contingency.
Innovation to retain talent
The commitment to hybrid and remote work methods, which take into account the specific characteristics of each job and each employee, seems to be related to a higher retention of talent. According to this study, the more investment is made in innovation, the better talent attraction and productivity rates organizations show.
In this sense, the vast majority of the companies consulted in the report claim to develop their processes from an agile framework (71.6%). Intrapreneurship and design thinking also stand out as some of the trends that are already prevailing in companies.
“Promoting the introduction of agile methodologies facilitates employees' sense of belonging by encouraging their role in decision-making and helping them to learn about and participate in the processes of creating products and services,” explains Elena Rodríguez, Head of Opinno in Madrid and co-author of the study. This expert also points out that open innovation, understood as the connection with the emerging business ecosystem, “allows employees to enrich their vision, get out of their routines and get to know new realities, while fostering innovation in organizations”.
Alignment with purpose works as incentive
The latest business trends are aimed at aligning the company's objectives, strategy, and purpose with that of employees, thus contributing to a sense of belonging. A large majority (66.1%) of business leaders say they “constantly communicate” these concepts to their employees, while a smaller percentage (24.8%) say they provide some, but limited, information.
With regard to the expression of objectives “in such a way as to create a common sense of mission and identity among all members of the organization”, it can be said that this is an established behavior in organizations, although there is still room for improvement. Some 54.6% communicate them “constantly” to their employees and 32.1% “sometimes”, compared to a minority who only communicate them “sporadically” or not at all.
“Companies must find ways to connect with their employees, to offer sufficient incentives to retain talent. Sometimes those incentives are economic, but nowadays they also take the form of social benefits, mobility options, growth and alignment with purpose,” adds Elena Rodriguez, who also points out that flexibility and the possibility of balancing work with personal aspirations are “key to keeping workers satisfied and reducing turnover.”
In short, the Great Resignation is a trend that seems linked to the woes of this post-pandemic world and a symptom of how the world has changed some paradigms in all its spheres in a very short space of time. In order to deal with it, companies must identify the causes well, understand the underlying causes behind the apparent demotivation of workers and undertake plans to prevent their employees from leaving.
“In the same way that companies analyze weaknesses in their business strategies, supply chains or customer relationships, they must begin to look at their internal people management deficiencies. Identifying these problems and addressing them to create friendlier spaces will foster belonging,” concludes Rodriguez.