CFO

Survey: What Execs Don't Get About the Great Resignation

By Art Wittmann, Editor
December 1, 2021
great resignation

In short:

  • Our survey examines how executives, managers and workers perceive the so-called Great Resignation’s effects on their businesses, teams and day-to-day jobs.
  • About 30% of executives and managers say the labor shortage has negatively affected their business and team, while some 40% of workers say it has negatively affected their job.
  • Nearly half of managers say they’re considering seeking a less demanding job, while only 28% of executives think burnout is the top reason employees would leave the company.

One of the unexpected, persistent outcomes of the pandemic is a numbing of our sense of urgency to problems that face us as workers, managers and executives. Maybe it shouldn't be unexpected: It’s human nature to regard adversity as routine once you experience enough of it. In our most recent research project, we set out to learn how the so-called Great Resignation affected midmarket and smaller companies. Our most surprising finding: While the labor market is now more challenging than it’s been in at least 60 years, according to the Bureau of Labor Statistics, workers and leaders simply aren’t as concerned about it as they were just two years ago.

In October, we surveyed 100 executives, 250 managers and 150 workers with the goal of understanding how the gyrations in the labor market are affecting each group. We wanted to gauge the mindset of each cohort, as well as their plans for dealing with skills and people shortages. Our survey focused on companies with less than $250 million in revenue and contained just a few companies from the pandemic’s hardest-hit industries such as hospitality and leisure/travel. Most-represented industries included professional services, financial services, retail and manufacturing.

The Great Resignation is causing “significant negative effects” to just one in 20 companies, according to executives we surveyed. Also, just one in 20 managers say that their team has been “significantly affected.” That number jumps to one in nine among workers who were asked about the current labor market impacting their own job. About a quarter of executives and managers report “slight negative effects” of the Great Resignation on their business and teams, respectively, while 29% of workers see it that way. So, in sum, about three in 10 execs feel their business is damaged by a labor shortage. About the same number of managers feel their team has been negatively affected. Workers are more likely to feel pain, with 40% saying they’re work has been negatively affected. Just as telling is that only 5% of executives and 1% of managers say they have no staffing concerns.

labor market survey

In our latest survey, about three in ten execs and managers say the Great Resignation has negatively affected their businesses and teams, respectively. Meanwhile, some 40% of workers say the same about their teams/roles.

These findings contrast with those from our survey from late 2019, which found the skills shortage to be the biggest challenge facing business. That survey also found payroll to be the area most likely to see new spending, with 80% saying they’d spend more in 2020 and about half of those saying they’d increase spending by more than 10%. In short, in 2019, staffing issues dominated the conversation.

talent shortage survey

Our survey from late 2019 reflected a talent shortage as leaders’ main concern across companies of all revenue bands.

Now, the Great Resignation is all over the news, but it’s not typically the biggest concern facing business executives or managers. That dubious distinction goes to supply chain issues. As a result, expected spending increases on payroll are near the bottom of the pack of options, with just 12% of executives saying they’ll increase spending by more than 10% in 2022 and 32% saying they’ll favor smaller increases. Sales, marketing, operations and technology will all get bigger spending increases in 2022. Even capital spending is preferred over payroll.

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But data from the Bureau of Labor Statistics shows that by some measures, the labor and skills crunch is worse now than it was in 2019 and indeed worse than it’s been in two generations. The chart below shows the number of unemployed persons per job opening. Generally, any ratio close to 1:1 is very bad for employers, since any need for specific skills will become exceedingly hard to satisfy. It hit a recent high in 2009 during the Great Recession at 6.6 workers per opening and has fallen gradually since then. The ratio fell below 1:1 in 2018 and got as low as 0.8:1 in late 2019. It again dipped below 1:1 this summer and now stands at 0.7 workers per opening as of September. November brought more evidence of historic labor tightness. The Labor Department's preliminary October jobless claims were the lowest in 50 years.

While press coverage has centered around the shortage of workers with certain key skills, like truckers, the numbers indicate the problem is widespread. And with the economy still growing, albeit slower than it was in the first half of the year, it’s likely that demand for employees will continue to increase. Current forecasts put the 2022 U.S. GDP growth rate at 3.8%. That, combined with inflation running around 6%, will mean employers will absolutely have to spend, train and be as flexible as possible to get the staffing they need.

number of unemployed persons per job opening

There are currently about 0.7 available workers for every job opening, according to the Bureau of Labor Statistics.

Only 34% of executives think hiring is more difficult now than it was in 2019, though ironically, they acknowledge that hiring is more expensive now, even if they don’t see the imminent need to spend more on payroll. Perhaps the hot economy in the first half of 2021 yielded enough new revenue to leave business leaders relatively unconcerned about staffing up in industries whose workers don’t face consumers. That chipper attitude is not shared by workers, of whom 48% say their job is more difficult now than in 2019. Just 18% say their job is now easier.

hiring difficulty survey

Thirty-four percent of executives say that hiring is harder now than it was in 2019, while 48% of workers say their jobs are harder now.

cost of hiring survey

Forty-seven percent of execs are spending more budget on hiring now than they did than in 2019. Meanwhile, 60% of managers are spending more of their resource: time.

Attitudes About Work: Cheery Execs, Burnt-Out Managers

Our data shows that the mindsets of executives, managers and workers about work are now very different from one another. Executives are the most positive, as we might expect given that despite lots of challenges, most businesses are now benefiting from the strong recovery. Executives are also insulated from the day-to-day challenges resulting from their decisions. They’ve asked for pay cuts, layoffs and hiring freezes; they’ve been concerned about supply chains and COVID procedures, but implementing new policies related to these concerns is left to managers.

For their part, managers are clearly the most burned out of the three cohorts. Thirty-seven percent say that burnout is a primary reason for leaving a job. Only 28% of executives say that, and remarkably, only 13% of workers do. We can also infer burnout from another question, to which 47% of managers say they’re considering seeking a less demanding job and 35% are considering quitting without a new job lined up. Only 9% of workers are thinking about quitting without a job lined up, and 39% are considering quitting for a less demanding job.

While managers seem to only dream of taking action to make life easier, significant portions of workers actually did it. They asked for more flex time (45%), asked to work remotely more than allowed (41%), moved to a new locale with a lower cost of living (35%) and moved to cheaper housing (32%). Since we only surveyed workers who are indeed working, we can’t comment on the mindset of those on the sidelines, but respondents say they love their job (38% strongly agree; 35% somewhat agree). They even mostly like the company management (20% strongly agree, 35% somewhat agree, and only 9% disagree).

But workers aren’t without their issues. Their numbness comes through in the number who say they neither agree nor disagree with statements on which we’d expect them to have an opinion. The table below shows the outsized percentages of workers with no opinion. Managers were similarly indecisive; meanwhile, executives gauged employees as content on all those counts.

Statement

% of Workers Who “Neither Agree nor Disagree”

I like my company’s management. 35%
I love my job. 27%
I’m happy with the tools provided to do my job. 31%
I know management is concerned for my safety and happiness. 33%
I’m happy to comply with COVID-related mandates. 27%
I’m happy with my opportunities for promotion. 41%
I’m happy with my work challenges. 31%
I know and share corporate values. 35%
My morale is high. 34%
I’m happy with my compensation. 30%

We took this poll after two quarters of very strong growth, so not surprisingly, the data indicates that the only ones solidly enjoying their work are executives, who likely found ways to profit during the economic rebound. And the delta variant had driven a late-summer wave of infections around the time of our survey, likely wearying managers and workers further.

The bottom line

Executives who don’t pay attention to the happiness and engagement of managers in particular could find themselves in a much tougher staffing position than they’re in now. Leaving managers without the tools they need to attract and retain workers will almost certainly cause issues soon; it’s just a matter of when. See our full survey report to see how workers, managers and executives are addressing and grappling with the current talent shortage.

  

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