The number of U.S. workers who quit their jobs increased from 47 million in 2021 to 50 million in 2022. To discourage “boomerang employees” from leaving again, Robert N Lussier and John R Hendon advise organisations to improve employee engagement, address compensation disparities and prioritise worker well-being.
By now, everyone has heard of the “great resignation”—the mass exodus of employees from their companies during the latter part of the COVID-19 pandemic. Around 47 million U.S. workers quit their jobs in 2021—a massive rate of nearly four million per month. To put that in perspective, there were about 163 million workers at the end of that year, so approximately 29% of the workforce resigned. As of the end of 2022, those numbers went to more than 50 million employee quits in a labour force of around 165 million—about 30% of the entire U.S. workforce quit in one year.
However, a recent Paychex survey asked individuals who quit their jobs if they were satisfied with their original decision and whether they had any regrets. About 80% of the more than 800 employees surveyed said that they did have regrets about quitting. In addition, 78% of individuals who left their jobs said that they would like to have their old job back, and 68% had tried to do so. Paychex dubbed this the “great regret.” However, these results give employers valuable information about the potential to work with those who have been called “boomerang employees” in previous generations.
Recruitment costs are underestimated
There is significant value in hiring trained individuals who are interested in working for your specific organisation, and boomerang employees are, by definition, “trained.” Recruitment and selection costs for new employees are routinely underestimated. This is mainly because the direct costs of recruiting can be easily calculated, but indirect costs cannot. Direct costs include recruiting staff salaries, advertising costs, agency fees, background checks, travel costs, etc. Many human resources groups estimate these direct costs as between 20% and 40% of an employee’s annual compensation.
However, if we add in indirect costs, such as onboarding, initial and ongoing training, uncompleted work due to holes in the organisation (that then cause other employees to become disengaged because they have to take up the slack), relationships and synergies, learning curves, and restarting the search after bad hires, the costs can easily go to between 100% and 500% of the annual salary of the individual. If we are honest and do the best we can in estimating these indirect costs, it simply makes sense to not lose employees unnecessarily, and if we do lose them, to welcome them and their associated skill sets back, if possible.
However, if we don’t make some adjustments, it is likely that we will lose the boomerang employee again. So, what do we need to watch for? What happened to create this storm of resignations over the past two years? While no doubt there are many different reasons for people quitting their work, a few stand out.
The janitor who helped put a man on the moon
First, employee engagement and satisfaction are down notably in the past two years. Gallup reported in a recent survey that employee engagement dropped from 2020 to 2022. In 2020, 36% of employees reported being fully engaged with their work. By 2022, that rate was 32%, with 18% of employees “actively disengaged.” Disengaged workers are far more likely to quit, and one key to engagement in many organisations is the valuable relationships that are formed between coworkers. Boomerang employees most likely created and maintained these relationships in the past.
Finding meaningfulness in work is also a critical part of employee engagement. Thus, if employees rejoin the organisation, an important issue to address is making sure the work is meaningful to the employee. Never take the attitude that this is a boring or lousy job that someone must do. There are people who enjoy jobs that you would not take, so you must stress the meaningfulness of the job. When President John F. Kennedy visited NASA, he met a janitor who was carrying a broom down the hallway. The president casually asked the janitor what he did for NASA, and the janitor replied, “I’m helping put a man on the moon.” The janitor knew something that most of us struggle with: the purpose of our work. We need to believe that our contribution matters and understand how we contribute to the team and organizational mission.
Another issue that frequently leads to disengagement and resignations is the perception of unfair compensation. Recent high levels of inflation have hurt every employee in every organisation. It is likely fair to say that not many people feel that their compensation has kept pace with the inflation rate. Factual salary survey information can help here, but probably the most valuable tool is conversations with both candidates and existing employees about their pay rates and how those rates are set. (Ask us about pay transparency versus pay secrecy. Go ahead, I dare you!) In addition, if we choose to offer a boomerang employee a higher pay rate, we need to be prepared to review the rates of everyone in similar work roles to avoid other voluntary quits due to perceived (or real) lack of fairness.
Employee stress, mental health, and the prevalence of burnout are increasing. If any honest person looks at the past three years, it quickly becomes obvious that mental health and burnout are major issues. At the extreme, many families suffered multiple deaths within their ranks, but even the loss of intimate friendships or routine relationships through the process of isolation can affect mental health. Large numbers of organisations have refocused their energies on mental health and burnout, but many have not. Work-life balance must be reassessed, and the potential for flexible or remote work will need to be evaluated in every position at every organisation. Physical safety in the workplace must be a priority. These needs will have to be addressed by successful organisations going forward.
Certainly, there are other factors that have contributed to the loss of large numbers of workers, but there is fairly strong evidence from multiple sources for the above factors. If employers don’t address these issues—at least in some meaningful ways—the likelihood of losing boomerang employees a second time is increased significantly.
- This blog post is published as part of a series with SAGE’s Business and Management INK.
- The post represents the views of its author(s), not the position of LSE Business Review or the London School of Economics.
- Featured image by Timo Volz on Unsplash
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