Fiverr Business and HiBob joined forces to survey over 1,000 US-based HR leaders and hiring managers about the current state of their company’s workforce amid the Great Resignation.
Top-level findings confirmed people are leaving their jobs rapidly in favor of more flexibility at work and, companies are struggling to find ways to fill talent gaps. Additionally, many people quitting their jobs are not re-entering the workforce. Instead, they’re choosing to work for themselves as freelancers or small business owners.
To understand how companies are dealing with the Great Resignation in the wake of the 2020/2021 COVID pandemic, how they decrease employee turnover, hire back talent, and how this affects productivity, we asked 500 HR leaders and 500 hiring managers the following questions.
Who’s leaving amid the Great Resignation?
Thirty percent of people in the workforce want more flexibility, 27 percent want better pay, 26 percent want a promotion, and 26 percent want to change industries.
People from every industry are quitting, but they’re leaving for different reasons.
It’s clear that people have reflected deeply on their work-life balance over the past two years and are choosing significant change. Fifty-six percent of sales, media, and marketing professionals leave because they want more flexibility.
Meanwhile, 45 percent of architects and engineers leave for better titles or promotions. Interestingly, high-tech professionals are changing professions or industries or going freelance.
Survey participants said 22 percent of people across all industries are leaving to become freelancers. If we break that down by industry, we see 33 percent of people in arts and culture, 33 percent in legal professions, 27 percent in high-tech, 28 percent in health care, and 36 percent in marketing are quitting to be freelancers.
We found that company size also affects why people leave their jobs.
COVID changed people’s expectations and priorities. At large companies, 28 percent of people leaving choose to switch from full-time employment to freelance. Many are freelancing for the companies they left, with 30 percent saying they went freelance to get the flexibility they need. Twenty-three percent of those leaving large companies plan to retire—earlier than initially planned.
Of all people quitting, 46 percent hold manager or director-level positions. Thirty-eight percent are mid-level managers, and 26 percent are executives. Hiring managers report that 16 percent of people leaving are entry-level, while HR leaders say 28 percent are. Hiring managers report that 26 percent are mid-level managers, and HR reports 50 percent. This shows a discrepancy in how HR leaders and hiring managers view turnover.
The discrepancy may stem from how hiring managers and HR leaders view people and their roles. HR leaders view roles based on org chart definitions, and hiring managers view roles according to responsibility.
For example, a content marketing manager may not manage other people, but their responsibilities are essential to the marketing department. Hiring managers will consider content managers mid-level managers, but HR leaders will consider them individual contributors.
The Great Resignation isn’t limited to people in specific roles looking for a change. People of all roles are leaving, and research shows that turnover is nearly equal across every industry.
Together, HR leaders and hiring managers report that 56 percent of people leaving are aged 36-45, and 23 percent are 46-55. HR leaders say it’s even higher: 61 percent for people 36-45 versus 16 percent for people aged 46-55. Again, the differences reported by HR leaders and managers reflect their sensitivities.
What’s the impact of people leaving?
Fifty-eight percent of HR leaders and hiring managers feel turnover affects their teams’ productivity. Responses imply that turnover significantly decreases productivity, and hiring managers feel it more than HR leaders (2.84 vs. 2.56).
Our research shows that turnover’s impact on productivity varies by department. Hiring managers in marketing and advertising, product, engineering/R&D, sales, and business development report that turnover significantly impacts productivity. In contrast, HR, finance and accounting, and IT hiring managers report that turnover has a lower impact on their productivity.
Overall, HR leaders and hiring managers see eye-to-eye on the impact of turnover on the organization. Many things negatively impact organizations’ employee experience and workflows:
- The cost of training new joiners
- The skills gap hinders productivity and damages morale and camaraderie
- The time it takes to find people to replace those who leave
Overall, our respondents said it takes an average of 5.4 months to fill a position after someone leaves (HR leaders reported 4.87 months, and hiring managers reported 5.93 months). The difference in viewpoint can be attributed to time to fill vs. time to hire: Hiring managers consider the time it takes to hire and onboard new people, while HR leaders consider the process complete once a contract is signed.
What should you do?
To fill the skills gap turnover creates, companies are turning to internal mobility and promotion programs and hiring temp workers and freelancers. However, 39 percent say they still focus on hiring full-time employees to replace those who’ve left, regardless of how much time it takes.
Forty-two percent of HR leaders and hiring managers think they should go back to working a full, 9-5 day onsite. Thirty-six percent believe they should hire freelancers to fill the skills gap. Thirty-five percent think they should offer critical employees higher wages and hire freelance talent to supplement additional work.
Our major findings
Of all people leaving their jobs in the US, 22 percent become freelancers. Twenty-eight percent of people leaving very large companies are choosing to become freelancers. These people are not being hired as full-time employees by other companies, as they’ve removed themselves from the hiring pool.
Today, 45 percent of engineers and architects leave their jobs for better pay and more prestigious titles, but this percentage varies by profession.
Forty-six percent of people leaving their jobs hold manager- or director-level positions, leaving teams without leadership. Only 37 percent of respondents said their organizations have programs focused on internal mobility or promotion and are prepared to hire more junior employees. To complicate matters, HR leaders and hiring managers view employees’ levels of seniority and role criticality differently.
Fifty-six percent of people leaving companies are between the ages of 36-45, an older demographic than expected. This is also the same demographic with the skills and experience needed to successfully leverage change—whether it’s moving to a new company, going freelance, or starting their own business.
Although 42 percent of HR leaders and hiring managers surveyed want to go back to the traditional, on-site, 9:00-5:00 workday and hiring practices, they know this isn’t realistic if they want to fill the talent gap. Thirty-six percent confirm companies consider hiring freelancers, 35 percent confirm they should offer better pay, and 66 percent say they should provide more flexibility.
Flexibility is key! Thirty-four percent of hiring managers and HR leaders believe companies should allow anyone to work from anywhere, and 32 percent think their company should allow flexible working hours to prevent more turnover.
The bottom line
We can’t ignore the Great Resignation. Today’s workplace is transforming, and HR leaders and hiring managers must adjust and align with the market to reduce turnover and grow. People want more flexibility, and if they don’t get it, they’ll leave to become freelancers or small business owners.
Turnover creates skills gaps and adversely affects productivity because fewer team members must handle increasing workloads. To add fuel to the fire, it takes an average of six months to hire new people and get them up to speed. Luckily, companies can initiate internal mobility programs and hire freelancers to fill the skills gap.