The 2020s got off to a wild start. Like a rolling set of tsunami waves, the world was hit with a deadly new virus, lockdowns, economic upheavals, retrenchments and business closures. And just as things looked to be settling down, the Great Resignation came crashing in. 2021 and 2022 saw employees voluntarily leaving their jobs in record numbers.
It was American Professor of Business Administration Anthony Klotz who first coined the phrase, but the Great Resignation was a global phenomenon and South Africa was not immune. Research by reward management platform Remchannel revealed that 60% of South African employees who left employment between April and October 2021 did so through resignation.
And then, in April this year, the Great Resignation was officially declared over, with numbers and rates of resignations returning to levels that would have been expected had the pandemic never happened.
As we enter the pendulum moment that some are calling “The Big Stay”, it’s worthwhile taking note of the factors that fuelled the Great Resignation and what the industry can learn from them.
Workplace of the future
All of this comes at a time when the world of work is going through massive change as the financial services industry goes through a digital revolution. “In the foreseeable future, it is highly probable that machines and humans will collaborate, leveraging each other’s strengths in a harmonious manner,” notes Marike van Niekerk, Manager: Legal, Compliance, Marketing & Communications at MUA. “This vision is already being realised in today’s world, evident through technologies like Siri, Alexa, and self-driving cars, which showcase the capability of mimicking human behaviour.”
With that in mind, businesses will need to attract and retain staff who are comfortable operating in this new hybrid environment. “In the current landscape, many traditional job roles necessitate a comprehensive understanding of effectively engaging with AI, including its capabilities and limitations,” notes Van Niekerk. “Successful utilisation of AI requires a tailored approach, where both the algorithm and data are customised for each task by relevant human subject matter experts. Businesses must not only adapt their structures to incorporate AI but also ensure that AI systems are specifically designed for their unique contexts and task constraints. As AI becomes a crucial business tool, employees will need training to proficiently interact with and utilise it. This transformation will lead to alterations in job specifications, focusing on attributes that cannot be easily replicated by machines.”
What’s more, with financial services businesses shifting to a more technology-based way of operating, these companies will also need to learn how to adapt to the constantly changing tech environment. Anyone who uses a cell phone will be familiar with the rapid pace at which technology progresses. It’s what spawned the Agile methodology, with its emphasis on continuous improvement, flexibility and adaptability.
Traditionally, these are not characteristics that have been associated with financial services. While the industry has had its share of operational innovations and evolutions, it has enjoyed the luxury of being underscored by time-honoured principles – which has shielded it from the kind of volatility seen in the tech space. This is about to change. And the workforce needs to be ready.
“Amid the digital revolution, a ‘liquid workforce’ is required,” says Van Niekerk. “It is crucial for employees to continuously update their skills and reinvent themselves to remain relevant and meet the evolving demands of businesses. Flexibility should be ingrained in its core, encompassing skills, projects, and the entire organisation to allow agile employees to flourish and adapt alongside the company, shifting from the confines of a single fixed task to being proficient in a diverse range of tasks.”
However, it’s not just about being able to adapt to a work environment where digitalised systems are the new norm. The workforce of the future also needs to be able to work alongside machines with complementary skills and qualities that are quintessentially human.
“Contrary to the improved efficiency of machines in performing repetitive tasks, there is a growing demand for soft skills. Humans surpass machines in tasks that necessitate empathy and deal with uncertainty,” says Van Niekerk.
“In the era of digitalisation, automation, and AI, creativity has become a highly valued attribute. The ability for ‘outside the box thinking’ and problem-solving skills are in high demand, as they enable the transformation of raw data into valuable insights. This highlights how human intelligence and the capacity for lateral thinking complement technological advancements. A creative workforce needs to harness the analytical and predictive power of AI to test and augment new ideas.”
Guy Chennells, Head of Product at Discovery Employee Benefits agrees. “There are technical skills, such as being familiar with using computers and virtual documents, that are important for people to develop as technology continues to progress, and keeping up to date with new releases of financial adviser servicing, online portals and digital forms remains crucial. However, the human aspect of insurance continues to grow increasingly important in this environment. With the rapid digitalisation of almost all client-insurer interactions, it becomes easy to fall into a state where the client views the insurer as a distinct, aloof body that simply exists. The personable aspect and the extent to which clients feel cared for by their insurer is crucial to emphasise in this new age. Soft skills such as clear communication, being dependable for clients and adaptability, especially when used over virtual forms of communication, are critical in this changing environment.”
Many of these attributes are often associated with the most recent cohorts to join the workforce. Born between 1996 and 2010, Gen Z are the first true digital natives, having never known a world without the internet. Far from scary or intimidating, for this generation, technology is a way of life. Millennials, meanwhile – who are now entering their 40s – are also tech-savvy, and continuously seek learning opportunities. These two generations are also known for their social consciousness and – Gen Z in particular – their solutions-driven approach to problems.
It’s unfortunate, then, that Gen Z and millennials were the ones driving the Great Resignation.
Towards the end of 2021, LinkedIn tracked the number of members worldwide who had recently posted job changes to their profiles. They found a 54% increase year on year, but they also noted that those leaving their jobs were predominantly Gen Z, with 80% of this generation posting changes, and millennials (50%). Gen X was not immune from the trend at 31%, while only 5% of boomers posted job changes.
Earliest this year, Joblist published research from the US that found a fifth of workers who had left their jobs during the Great Resignation period regretted the decision – primarily citing the reason that finding a new job was more difficult than expected, followed by the new job was not what they expected, and they missed their former colleagues. Nonetheless, 64% of employed respondents were planning to leave their job.
According to Norton Rose Fulbright, in the US at least, the financial services sector was among the industries less affected by the Great Resignation. However, findings published by Old Mutual rewards management platform Remchannel towards the end of 2021 found a 16% increase in resignations across all sectors in South Africa.
What’s more, back in 2018, a Compdata survey found that the banking and finance industry had one of the highest turnover rates, at 18.6% – and that the highest driver of staff turnover was millennials. That was before the pandemic.
If the industry is to attract and hold onto talent, it’s worthwhile taking time to consider what factors fuelled the Great Resignation.
Overwhelmingly, the predominant reason cited by respondents in the Joblist survey was bad management or a toxic workplace. Other factors had to do with salary, limited growth opportunities, feeling burnt out, not enough schedule flexibility and insufficient benefits.
Remchannel found a similar trend in South Africa – South Africans were leaving their jobs due to burnout resulting from greater workloads and employer demands brought on by the challenges of the pandemic’s impact on business.
If a toxic workplace culture that leads to burnout, stifles growth opportunities and compensates employees poorly fuels resignation, what will attract employees and encourage them to stay?
Engaged, happy people
For their 12th Gen Z and Millennial survey, published this year, Deloitte polled thousands of Gen Zs and millennials across 44 countries. The results revealed that work/life balance was the top trait they admired in their peers and what they considered most highly when choosing a new employer – this despite the fact that 49% of Gen Zs and 62% of millennials said work was central to their identity. Flexibility formed part of this, with three quarters of respondents who are currently working remotely or in a hybrid model saying they would consider looking for a new job if they were required to start coming into the office full time.
The study also found that Gen Zs and millennials, like everyone else, were concerned about the high cost of living and unemployment. But their broader social consciousness persists – climate change ranked third on their list of concerns They also continue believe that business leaders have a significant role to play in addressing social and environmental issues.
Research by McKinsey found GenZ to be the generation least motivated by financial compensation and the only generation that ranked career development opportunities as their top reason for taking a job. Other generations – including millennials – cited salary as their primary reason. They also placed a high value on workplace flexibility – cited as their top reason for staying in a job – and purpose.
These factors have also been noted by Discovery. “The best way to attract and retain talent is to consider what employees value in the workplace. In an increasingly digital age, employees are beginning to value work-from-home opportunities and flexible working hours,” says Chennells. “Another crucial, but generally overlooked, factor is ensuring that employees feel recognised for their efforts and have a sense of belonging and purpose in their working lives. This is accomplished through regular interactions with management to ensure that employees are on target with their goals and to gain support with difficulties.
“At Discovery, we have special programmes designed to recognise employees, such as Star Awards and Beyond, where employees are chosen to receive an array of prizes. Regular team activities such as quiz nights or other work-related events can further help promote social interaction and encourage camaraderie between colleagues.
“Also, common elements such as competitive pay and benefits have always played an important role in talent retention and must not be neglected in the pursuit of attracting talent.”
The power of human connection is certainly not to be discounted. Of those workers who said they regretted leaving their jobs during the Great Resignation, many listed missing their former colleagues as one of the reasons. And while Gen Zs and millennials both value flexibility, one survey found that Gen Z – who entered the workforce during the talking heads era of remote working – were considerably more inclined to look for work that allowed them to have in-person human interaction with colleagues at least some days a week.
“Maintaining an emotional human connection serves as a significant distinguishing factor,” says Van Niekerk. “A company culture that prioritises and celebrates human qualities, emphasising empathy and emotional intelligence, will foster innovation, problem-solving, and ultimately cultivate a collaborative work environment. In this context, business leaders play a crucial role in promoting cross-functional teams’ collaboration. To achieve success, businesses must strategically structure their operations to leverage data from all departments, effectively fuelling AI-driven initiatives.”
Something else that came out of the Deloitte survey was that Gen Zs and millennials felt employers should be preparing their workforce for the new-look, low-carbon future. The same could be said for preparing people for other technological advancements in their fields – including AI and machine learning.
“The responsibility of HR departments and senior management teams is to identify the crucial domains where AI has the most significant influence and initiate programmes aimed at facilitating employees in acquiring new skills,” says MUA. “This involves fostering a culture of encouragement among employees and placing a strong emphasis on continuous learning, supported by ongoing opportunities to enhance their skills and gain valuable experiences.”
An interesting nugget to come out of the Deloitte survey was that, while Gen Z and millennials seem to have very clear ideas of what they’re looking for in the workplace, they don’t feel comfortable pushing for these changes. One thing holding them back is concerns around job security. They also don’t feel comfortable speaking to their employers about salary increases when the economy is showing no signs of improvement.
In addressing that first discrepancy, study authors noted that employers who showed commitment to addressing issues such as DEI, work/life balance, social impact and environmental sustainability without people having to lobby for it would be in a better position to attract and retain Gen Z and millennial talent.
Similarly, offering employees competitive salaries and benefits, as well as opportunities for career development, mentorships, sponsorships, and training as standard practice makes employees feel valued and motivated to stay.
Finally, taking issues around mental health seriously and providing understanding and support for employees will set employers apart. This includes helping employees address burnout and creating an inclusive environment where microaggressions and harassment are properly dealt with.
The industry is going through a revolution – but it’s not only tools and technology that will change. The workforce is evolving, too, and the workplace needs to adapt in order to accommodate these changes. As the saying goes, change is the only constant – and as much as it can be uncomfortable, it’s also a sign that the industry is alive and growing.