While the COVID-19 pandemic is hopefully slowing down, it has left lasting effects on the business world. One such effect is what is known as The Great Resignation. This situation placed many startup businesses at a disadvantage.
However, outsourcing became a welcome solution to the problem. Let’s look at how it did that and learn how to take advantage of it should you find yourself in the situation.
What Is The Great Resignation?
The Great Resignation is a phenomenon that occurred in the aftermath of the COVD-19 pandemic. As the name says, it involves an unprecedented number of people leaving their jobs amid the pandemic.
Organizational psychologist and Texas A&M University professor Anthony Klotz first proposed the concept in early 2021 to predict the effects of the pandemic on the economy. It primarily focused on the mass resignations during May of that year.
The phenomenon is most often associated with the US labor market. Before February of 2021, the resignation rate in the country rarely went beyond 2.4%. However, in April and May, more than 4 million people quit their jobs across industries. It continued to increase in the following months, and by September, the quit rate was at 3% of the labor force.
What Drives The Great Resignation?
Labor experts noted that the mass resignations were somewhat paradoxical. Traditionally, the quit rates in Western countries actually fall during high employment periods. It typically happens when there is an economic downturn, such as during a pandemic. The reason is that people want to retain their jobs as much as possible during such times.
But even with the labor shortage during the pandemic, many people are still choosing to leave their current jobs. While many factors can lead to it, experts point to a few specific ones as the main drivers.
Health And Safety Concerns
This is arguably the biggest driver of the great resignation. With the threat of contracting the disease still looming, many people are wary of venturing back into crowded workplaces. And if a company can’t guarantee their safety, they see it as a sign to leave and find a better workplace.
Beyond the fear of contracting the disease, stress also becomes a major health concern for many. With all the changes in the workplace and daily life in general, they feel more pressure than before. And this situation has led to more cases of burnout. Resigning is seen as a way to escape from it all.
Job Insecurity
With the severe downturn of business activities, people found themselves facing an uncertain future in their current workplaces. They worry that they might be the next as companies downsize their operations. Thus, before that happens, they take the initiative to leave and find greener pastures.
Changing Priorities
Interestingly, the pandemic also turned into an opportunity for people to think about their priorities. Some see it as a sign to pursue dream jobs. On the other hand, some people decided to quit the workforce altogether to focus on other things. That is particularly the case with parents who decided to stay home permanently to raise their kids.
The Impact Of The Great Resignation On Startup Businesses
The ongoing pandemic already had a significant impact on startup businesses. With the economic downturn, they needed to rethink their operations. However, the Great Resignation added an entirely new dimension to the situation.
Stiffer Competition For Talents
One major challenge that smaller companies face is the tougher fight for talents. That might seem odd, considering that a large number of resignations should translate into more available talent. However, these talents are likely to demand more from the new companies they will be applying to.
This is, of course, very reasonable. But that can put some startup businesses at a disadvantage, as they might not yet have the ability to meet those demands. As such, they are missing out on the opportunity to attract these talents.
To make matters worse, existing startups might find themselves having to face new competitions. Some of those who decided to resign sought to establish their businesses. And with them understanding exactly what workers like them would be looking for, they get a good head start in the hiring game.
How Outsourcing Can Help Startup Businesses
To get through the Great Resignation, startup businesses should rethink their labor acquisition strategy. Beyond coming up with new ways to attract hires, you also need to look for new sources of talent.
This is where outsourcing comes into play. The strategy became more prominent during the early days of the pandemic, as companies sought ways to get around the economic challenges it brought about. Now, it helps them quickly access talent to replace the people leaving.
The Benefits Of Outsourcing For Startup Businesses
Okay, so you are probably aware of the benefits of outsourcing already. But the response to the Great Resignation highlighted these even more. Some of the most important ones in this situation include:
- Cost-effective: You can get more talent for less, which is especially useful during these times when you need to increase your reach to survive.
- Access to a diversified talent pool: Established providers have people that can work in different industries, making it easier for you to find the right staff.
- Flexibility: With the way the business scene is changing, outsourcing can help develop and adapt your team quickly.
- Resilience: The strategy can also provide the resiliency that smaller businesses need to survive the economic downturn.
All of these benefits will help you get through not just the Great Resignation but also what comes after it. According to Klotz, while the phenomenon could potentially slow down, it will bring various changes in the labor scene. One such change would be that remote work becomes the norm. With outsourcing already employing this strategy, you get a good start in implementing it.
Get The Right Outsourcing Partner For Your Startup Business
Whether you have already been affected by Great Resignation or want to protect your startup business from it, you need to have the right outsourcing partner. We at Virtua Outsourcing have been following the phenomenon for the last year or so. And we have a good understanding of what kind of services you might need. So, sign up with us today and we will give you the top talents you need in these times.