The Great Resignation and What It Means for Your Benefits Packages
For the last couple of years, everyone from business owners to political pundits has been talking about “The Great Resignation.”
In 2021, the United States — and many other countries in the world — did see a sharp increase in the number of people quitting their jobs and searching for better fits. You may have even noticed this happening at your own company.
Whether you’re currently struggling with a rise in people quitting their jobs, or if you want to get ahead of a potential stream of resignations at your business, you need to consider how your benefits package might play into people choosing to stay or go.
Not sure what the connection is? This guide takes a deep dive into The Great Resignation, some of the reasons behind it — including those related to benefits packages — and what changes businesses can make to retain their top talent.
What Is the Great Resignation?
Starting in the spring of 2021, workers in the United States started quitting their jobs in droves. This phenomenon was dubbed “The Great Resignation” by Anthony Klotz, an organizational psychologist and business administration professor at Texas A&M University.
Since spring 2021, millions of people have been quitting their jobs each month. In March 2022, more than 4.53 million said goodbye to their employers — a record-breaking number. By the end of this year, experts also estimate that 1 in 5 people will leave their job.
Why Did so Many People Quit?
Ask anyone and they’ll give you a different reason for why so many people have quit their jobs. As is the case with most things, though, there is no one simple answer that explains what caused The Great Resignation
Based on surveys of people who have quit, as well as responses from business and economics experts, the following are some of the most well-known contributors:
According to Klotz, one of the primary factors behind The Great Resignation was “pent-up resignations” from the COVID-19 pandemic.
Essentially, because there was so much economic uncertainty throughout the country — many people lost their jobs, were furloughed, had their hours cut, etc. — a lot of employees chose to stay at their jobs even though they had originally been planning on leaving.
Once the dust of the pandemic started to settle, people who had been waiting to quit decided to pull the trigger and walk away.
In some cases, employees weren’t planning on quitting before the pandemic hit. However, the effects of the pandemic on their jobs caused them to start looking for work elsewhere.
For example, many employees were unhappy about having to return to work after cases began to drop. They felt that they should be able to continue working from home — especially since they were just as, if not more productive as remote workers.
A Pew Research survey interviewed American adults who chose to quit their job in 2022 and found that low pay was the number one reason why people resigned.
For 37 percent of those who quit, low pay was a major contributor. Another 26 percent said it was a minor contributor.
Salaries in the United States have not kept up with the rate of inflation. According to 66 percent of workers, inflation has outpaced their salary gains over the last 12 months.
People are seeing the fallout from this issue now more than ever. The cost of everything from fuel to food is increasing, and plenty of people are struggling to stay afloat. This is particularly true for those who are earning minimum wage or close to it.
Lack of Advancement Opportunities
In addition to low pay — and wages that don’t keep up with inflation — 63 percent of people have quit their jobs because of a lack of advancement opportunities.
If employees who have been with a company for years can’t get promoted, they’re eventually going to look for a job with more growth opportunities (and likely more earning potential).
Most people don’t want to stay stagnant year after year, especially if they see new people being brought in and being offered positions with more responsibilities, more respect, and more money.
In many ways, the pandemic showed us the worst sides of humanity. We all saw videos online of customers screaming at frontline workers because they were asked to put on masks while shopping — many of us even saw these altercations happening firsthand.
Over the last year, all kinds of businesses have displayed signs in their windows announcing that they’re hiring. This increase in hiring has emboldened a lot of workers to stop tolerating disrespect (and in some cases downright abuse).
Instead of continuing to put up with poor treatment — especially if they also don’t feel protected by their employer — they’re jumping ship and taking jobs at companies where they feel more respected and appreciated.
For 48 percent of people who quit their jobs in 2021, childcare issues were either major or minor contributors.
Childcare is expensive, and it’s become more expensive over the last couple of years. According to the latest data, childcare prices rose by 5 percent between 2019 and 2020. However, the inflation rate was just 1.2 percent.
A lot of workers have had to make tough decisions in the last couple of years when it comes to childcare.
Some people had to quit their jobs during the pandemic because no one was home to watch their kids while they participated in distance learning. Others have decided that they can’t keep up with the cost of childcare and found that it’s cheaper to stay home with their kids.
Regardless of the reason, it’s clear that employers need to do more for employees with children if they want to prevent them from leaving the workplace.
Lack of Flexibility
Finally, flexibility issues also played a role in people’s decision to quit their jobs in 2021
The pandemic taught us that a lot of jobs — from teaching school to conducting therapy sessions — can be done remotely. Based on these revelations, a lot of workers are wary of having to return to the office just because COVID-19 cases are down and they’re fully vaccinated.
A lot of people find that they’re more productive and engaged when they work from home, and they want to keep doing so. If their employee won’t allow them to do so, they may decide that they’d rather look for work elsewhere.
The Cost of High Employee Turnover
High rates of employee turnover affect everyone, from the CEO down to the junior intern. The following are some of the most important consequences to keep in mind:
Company morale will almost certainly take a hit if employees see their colleagues and friends leaving in droves
Think about it.
Your employees spend at least one-third of their day, 5 days per week, with their coworkers. They build relationships with and get used to seeing these people day after day.
When colleagues suddenly leave, it disrupts the rest of the team’s workflow and leaves a hole behind. This can contribute to a lack of positivity in the workplace and may cause those who are left to feel less satisfied with their job.
When people quit and morale drops, productivity tends to follow suit.
Imagine you had 5 employees handling customer service and 2 of them quit. That leaves 3 people scrambling to do the work of 5 people while you scramble to fill the spots of the 2 who left.
No matter how hard the remaining 3 employees work, there’s only so much they can do when nearly half of their team is missing. You’ll almost inevitably notice a drop in productivity, which may also create a negative feedback loop and further exacerbate the drop in morale.
Higher Recruitment Costs
When you lose a lot of employees at one time — or lose several people one after another — you’ll likely have to spend more money trying to replace them.
We already know that it costs more money to hire a new employee than it does to retain an existing one. When you’re trying to hire several new employees, though, things get even more expensive.
Whether you’re paying to place ads on recruitment websites or paying a headhunter to help you fill positions, you’ll probably have to shell out a lot of money to replace the workers who quit.
More Time Spent on Training
In addition to experiencing decreased productivity because you’re short-staffed, you’ll likely also notice a decrease in productivity while new employees get up to speed.
It often takes months for someone to feel fully comfortable in their new role, which means your team won’t be operating at full capacity for quite a while even after you fill a vacancy. This also leaves other employees to pick up the slack and can create a stressful environment for all of your employees.
A lack of productivity can also contribute to lost sales. If you can’t keep up with the demand from your clients, they might decide to take their business elsewhere — perhaps to a company that isn’t losing employees at the same rate as you.
The Great Resignation and Corporate Health Insurance Benefits
The survey cited above revealed that issues with the company’s benefits package also played a role in many people’s decision to leave their job. Nearly one-quarter (23 percent) said that insufficient benefits had a significant impact on their choice, and 20 percent said it had a minor impact.
What do benefits — especially health insurance benefits — have to do with company loyalty and the decision to stick with an employer? Put simply, a lot.
What does the data say?
- 56 percent of U.S. adults who have employer-sponsored health benefits say that liking their health coverage is a key factor in their decision to stay at their current job.
- 46 percent say that health insurance was either a deciding factor or a positive influence on their decision to choose their current job.
There’s no denying that healthcare in the United States is expensive, and there’s no sign of it getting cheaper any time soon. One study showed that, in 2019, healthcare spending in the U.S. was roughly $11,582 per person. By 2028, it’s expected to reach approximately $18,000 per person.
With costs going up, people need health benefits that help them save money without sacrificing the quality of care they receive. This is especially true for people who suffer from chronic health conditions — which is the case for 40 percent of Americans.
Employers can play a key role in helping their employees get the care they need. This, in turn, increases the likelihood that employees will stick with them and remain loyal to their company longer.
How to Improve Your Health Benefits and Retain Top Talent
Better health benefits can help you to retain top talent and maintain your company’s productivity. What can you do to make your benefits package better, though? Here are some suggestions to consider:
Focus on Mental Health
After the last couple of years, mental health struggles in the workplace are more prevalent than ever. The 2022 version of Mental Health America’s “Mind the Workplace” report reveals the following:
- 4 in 5 employees say that workplace stress affects their relationships with family, friends, and coworkers
- 47 percent of employees are aware of their employer’s mental health services
- However, only 38 percent are comfortable utilizing them
Including access to mental health resources in your employee benefits package is a good way to provide your team with a higher level of support. However, you must also encourage them to take advantage of these resources and work to destigmatize mental health in the workplace.
Include Other Wellness Services
Including mental health support in your benefits package is a good starting point. You may also want to factor in other types of wellness services, including the following:
- Nutrition resources: Give your employees the knowledge and tools they need to eat more healthfully, stay energized, and reduce their chances of getting sick.
- Mindfulness/meditation resources: Meditation and other mindfulness practices can help your employees manage their stress effectively, feel more productive, and be more engaged at work.
- Health-promoting tools: Consider providing access to tools like standing desks, treadmill desks, wearables, and other tools that encourage healthier lifestyles.
When you add these kinds of services to your benefits package, you show your employees that you care about all aspects of their health — not just their blood pressure and cholesterol levels.
If your employees don’t feel comfortable using your company’s mental health resources, what’s the point of having them? One reason why people don’t use your business’s services might be the fact that they’re difficult to access.
Investing in digital wellness solutions and software platforms makes it easier for everyone to get involved and utilize your company’s wellness benefits. Look for tools that include features like gamification, an easy user interface, and confidential health monitoring and data storage.
The best employee health benefits package will encourage workers to get up and get active. A sedentary lifestyle contributes to and exacerbates a variety of health issues, from obesity to diabetes and certain types of cancer.
Consider including reimbursement for a gym membership in your benefits package, or build your own company gym somewhere on the premises. Be sure to include regular opportunities in the workday for employees to exercise, too — without having to fear penalties for stepping away from their desks.
Make it easy for your employees to A) learn about your benefits package and what it offers and B) take advantage of it.
In addition to incorporating digital wellness solutions for more ease of use and increased accessibility, ensure your employees learn about health benefits and wellness resources right from the start.
Include information about these programs in your company’s onboarding materials. That way, everyone knows from their first day (if not sooner) what your company offers and how they can get the most out of their benefits package.
Avoid a One-Size-Fits-All Approach
If your goal is to better serve your employees and entice them to stick with your company long-term, offering a cookie-cutter, the one-size-fits-all program is not ideal.
Your employees are all unique individuals with different priorities, health concerns, and interests. If you allow them to customize their health benefits or pick and choose the resources they want to utilize, you’ll have an easier time creating a health-focused company culture.
This, in turn, can encourage your employees to utilize the tools available and stay loyal to your business so they can continue reaping the benefits of robust health benefits.
Consider Concierge Medicine Services
It’s great to offer varied, comprehensive health benefits to your employees. However, if they never have time to go to the doctor or meet with a dietitian, what’s the point?
This is where offering concierge medicine services can come in handy. Concierge medicine services make an excellent add-on to traditional health benefits.
In exchange for a flat monthly or annual fee, you and your employees have 24-7-365 access to a licensed physician who can perform physicals, conduct a variety of tests, and treat a wide range of health issues.
The increased convenience boosts your employees’ chances of actually using their health benefits and taking care of their well-being.
Many concierge medicine practices also offer additional services that regular physician’s offices don’t. This includes nutrition counseling, hormone therapy, mental health resources, and more.
The Importance of Wellness in the Workplace
Improving employee health benefits isn’t just about improving employee retention rates. When you make wellness a priority, everyone benefits.
If you need more motivation to improve health benefits — beyond reducing turnover — here are some other improvements you might notice when you put employee health and wellness first:
There’s no denying it. Healthy employees are productive employees.
When their physical and mental health is in check, it’s easier for team members to focus, understand their assignments, and get them done on time. They’re less likely to make mistakes, and they’re less likely to overlook important details.
All of this boosts the productivity of the company as a whole. It sets you up to get more done, achieve your long-term goals, and outperform your competitors.
Do want a team of stressed-out, anxious, miserable employees helping you run your business? Probably not — which means you need to start taking your health and wellness offerings more seriously.
In addition to being more productive, healthy employees are also happier employees. It’s easier for them to have positive attitudes and be enthusiastic about their work when they’re feeling well physically and mentally.
Happy, positive, and enthusiastic employees are more likely to collaborate and come together to find solutions to problems.
If your company thrives on collaboration, you need to set your employees up so they’re in the right mindset to collaborate.
If team members are sick, exhausted, and overworked, they’re going to have a hard time listening to their colleagues, understanding their points of view, and wanting to work together to get things done.
Not only will your employees have an easier time collaborating when they have access to better health and wellness benefits, but they may also be more innovative.
When your employees have the resources, they need to take care of their bodies and brains, it’s easier for them to think outside of the box. They’ll be able to come up with creative solutions and make your company more innovative.
This, in turn, leads to increased competitiveness and helps you stand out from the crowd.
When employees are constantly sick or struggling with their mental health, they’re more likely to take days off. This eats into your company’s productivity and leaves the rest of your team members to pick up the slack.
By prioritizing your employee’s physical and mental health with a more robust health benefits package, you can decrease absenteeism and improve productivity across the board.
Better employee health and wellness also reduce presenteeism at your company.
Presenteeism refers to situations in which employees are physically present but not actively engaged in their work. They’re just warm bodies in seats, essentially, which is not good for productivity, morale, or performance.
If your employees’ physical and mental health is in check, they’ll be less likely to check out and wait out the clock. Instead, they’ll be more engaged and will continue getting things done.
In addition to struggling to retain top talent, many companies these days are also struggling to recruit new employees to fill the spaces left behind by those who quit.
Remember the statistic we mentioned at the beginning of this guide? Nearly half (46 percent) of people say that health insurance is a deciding factor or a positive influence on their decision to choose their job.
If you want to attract the best, you need to offer the best.
When you expand your benefits package and include more health and wellness options, you show job seekers that you care about them and want to set them up for long-term success. This could lead to them choosing you over another company that’s hiring.
Spending more on healthcare and offering a more robust benefits package could actually help you save money in the long run.
Think about how much money you lose when your company’s productivity is low when employees are disengaged when they’re constantly taking days off, or when they are present but not really there. All of this can add up to a lot of lost revenue.
Additional Benefits to Consider
Health benefits are a top priority for many workers in the United States when deciding to work for — or continue working for — a particular company. In addition to improving your company’s health benefits, though, you may also want to make changes to other aspects of your benefits package.
Here are some of the best changes you could make to increase employee retention and prevent mass resignations:
More Flexible Schedules
Lack of flexibility was one of the top reasons why so many people chose to quit their jobs in 2021. If you want to avoid high employee turnover rates and have an easier time attracting top talent, you need to adjust your mindset when it comes to scheduling.
Do your employees really need to be at the office every day from 9 to 5? Could you let them set their own schedules?
How about where people work? Do they really need to be at the office at all, or could they do their work just as well from home?
When you loosen your grip on the standard 9 to 5 schedule, you make your company more appealing to job seekers. You also create a more hospitable environment for your existing team members.
More Paid Time Off
Research shows that when employees have more opportunities to take time off — for vacations, personal days, etc. — their mental health improves.
Employees also say that paid vacations are the number 2 most important benefit, following healthcare.
As we’ve already discussed, good mental health is good for business.
If your employees have a chance to rest and recharge — without worrying about how taking days off will affect their paycheck — they’ll be more engaged and invested when they are at work.
401(k) matching involves matching your employees’ contributions to their retirement accounts.
This has been shown to boost morale, increase employee retention rates, and attract better talent to your company. It also provides tax benefits for you as a business owner because you can claim your matched contributions as tax deductions.
Remember, childcare issues are a common contributor to people quitting their jobs. One way to resolve this issue is to offer on-site childcare.
Setting up childcare in your building can provide your employees with a lot of peace of mind. They’ll know exactly where their kids are and can even pay them visits during the day.
This knowledge and peace of mind can make it easier for your employees to focus on their jobs while they’re at work because they won’t be stressing about their kids. As a bonus, they can also save money on daycare costs.
Student Loan Assistance
The average amount of student loan debt in the United States is nearly $41,000! When you bring on new employees — especially young employees who are recent graduates — one of their top priorities is probably figuring out how they’re going to pay off their student loans.
One way to enhance your benefits package, attract better employees, and retain your existing employees is to offer student loan assistance.
If you help your team members pay off their debts, you can ease their stress and improve morale. You can also make it easier for them to focus on their work and want to stick with you long-term.
Personal Development Opportunities
By creating more opportunities for employees to rise through the ranks and grow within your company, you increase their chances of staying loyal.
One way to give your employees the tools they need to advance is by offering access to personal development opportunities. This might include covering the cost of continuing education courses or giving them a stipend to spend on personal development resources that align with their goals.
When you invest in your employees’ personal development, you show them that you care about their well-being and want them to succeed. This can lead to improvements in morale and create a more engaged and productive company culture.
Update Your Benefits Package Today
Even if your company hasn’t been affected by The Great Resignation, it’s still better to be proactive than reactive.
Making positive changes to your benefits package — especially when it comes to health coverage — is a good way to show your employees that you care about them and are grateful that they’ve stuck with you.
Remember the tips discussed above so you can start creating a health plan that works for your employees and helps you build a successful, thriving business.