Monday, 22 November 2021

Post COVID-19: The ‘Great Resignation’, Staff Shortages And How To Attract And Retain Top Talent

In September 2021, a record 4.4 million Americans (nearly 3% of its national workforce) voluntarily resigned.  This followed 4.3 million Americans who resigned in August 2021. Over this year, an all-time high of almost 35 million Americans have left their jobs[1]. Coined the ‘Great Resignation’, many workplace commentators suggest Australia may enter a similar period of increased worker resignation rates as COVID-19 vaccines permit life to begin returning to normal.

The potential for an Australian Great Resignation, combined with current workplace struggles in sourcing suitable staff, looks set to pose challenges for employers in Australia.  In light of this, in this article we consider some of the main drivers behind staff resignations in the current environment and provide tips on how to protect businesses from the Great Resignation as well as tips on attracting and retaining top talent, to equip employers with tools in navigating the coming months.

The Great Resignation and Staff Shortages

This Great Resignation in Australia may arise due to a number of situational factors, partly resulting from the COVID-19 pandemic, including:

  1. Resignation Backlog – As COVID-19 spread throughout the world, creating a period of significant uncertainty, many workers may have been unwilling to make significant employment changes, and those who may have otherwise resigned instead decided not to, creating a ‘backlog’ of resignations. As the outlook for 2022 appears more positive, these employees may be gaining the confidence to resign from their roles and move on to new employers and positions.

  2. Burnout – Many employees worked through challenging circumstances once COVID-19 took hold. For example, parents working from home were also forced to juggle home learning, and frontline workers had particularly challenging working conditions and often worked excessive hours. This, coupled with reduced spending allowing people to save money during the pandemic, may now provide employees with the opportunity to take a break from work to recover from burnout.

  3. Reflection – The pandemic also presented employees with an opportunity to reflect on what they valued in life. Some may have realised they are not working in a role that they enjoy or that achieves their overall objectives, and consequently planned to create change in their career.

    Further, people who worked in industries forced to close by government mandated lockdowns may have chosen to leave their professional altogether in search of an industry that offers more secure employment for the future.

  4. Remote Work – When return to office became possible once again, employees asked to return to the office and who are reluctant to do so may instead seek employment with employers offering more flexible working arrangements.

  5. Vaccine Mandates – Finally, vaccine mandates in some States/Territories including Victoria are currently preventing proportions of the population from the workplace leading to employment terminations.

    These matters, together with international borders remaining closed to non-Australian residents (except in certain circumstances), have resulted in a shortage of skilled laboured, with many employers indicating struggles at the moment to attract top talent, and also retain this talent. According to the latest SEEK Employment Report, national job ad volumes in Australia were 63.2% higher nationally in October 2021 when compared to October 2020, with the number of jobs advertised in October reaching a 23 year high. At the same time, the number of applications for each position had declined by 5.4%[2].

How to Protect Businesses from the Great Resignation

There are steps employers can take to protect their business from the Great Resignation.  These may include:

  1. Restraints – To protect your business against post-employment activity of departing workers which could impact your relationships with key clients and staff, ensure well drafted restraints of trade (including non-competes where appropriate) are included in employment contracts and contractor agreements.  These provisions can also serve as a deterrent from employees seeking to depart (provided they are coupled with other incentives such as bonuses and other benefits such as flexible work).

  2. Bonuses – If financially viable, employers may consider offering employees a Christmas bonus / pay-rise in recognition of their loyalty and commitment during the COVID-19 pandemic. In awarding a bonus, employers may consider imposing a condition that the bonus is subject to a well-drafted clawback if they resign from the business, for example in the next 12 months. This will provide employees with a financial incentive to remain employed for at least another 12 months.

  3. Stay Interviews – Conduct “stay interviews” with employees, which is an opportunity for employees to discuss what they think is going well and what they would like to see change at work. This will give employees a chance to discuss what motivates them on a daily basis and to alert you to any concerns which may need to be addressed. Taking action in response to employee feedback may motivate them to reconsider any potential job offers from other employers. Such measures also assist in monitoring mental health of workers, which may well have been adversely impacted during the pandemic.

  4. Create ownership opportunities – If employers have a profit-sharing or stock option program, they may consider creating ownership opportunities as the more ownership an employee has in a company, the less likely they may be to leave.

How to Attract and Retain Top Talent

In addition to these protections, we make the following recommendations as to how to attract and retain top talent which aim to also assist in minimising any fallout from a ‘Great Resignation’ in Australia:

  1. Reputation – Pay attention to your business’ reputation in the market. A strong reputation should assist in attracting talent in the first place as people are more likely to want to gain experience working for a reputable organisation. It may also allow employees to feel proud of the organisation they work for, also encouraging them to remain employed.

  2. Job Advertisements – Make job advertisements notable and interesting. Include in these advertisements a description of the company’s culture and emphasise any extra benefits an employee will receive from joining the company’s team.

  3. Culture and Staff Loyalty – Create and nourish a culture of recognition and make workplaces enjoyable places to be. Build personable (yet professional) relationships with your staff,  demonstrate genuine care for staff and prove the importance of work-life integration.  Not only can this help to retain employees but creating a positive culture and a psychologically safe working environment should also in turn boost productivity.

  4. Incentives and Benefits – Ensure rates of pay align with market conditions to avoid being outbid by other employers and ensure, if financially viable, that there are adequate financial and non-financial incentives that can be provided to employees through the life of their employment as recognition of their performance and service.

    Such additional benefits employers may choose to offer employees to make their company an attractive place to remain employed could include paid parental leave, paid study leave, offering leaves of absences/sabaticals, and other positive employee engagement activities etc.

  5. Remote-based work – Consider the benefits of in-office work versus remote based work.

    Many employers will continue to facilitate the benefits of flexible work by offering ‘hybrid arrangements’ whereby employees work partially in the office and partially from home.

    Adopting a rigid approach to requiring all work to be performed onsite when it is practicable for work to be performed from home may lead to turnover of staff, with many employers using hybrid work arrangements as a selling point to attract talent.

    Well implemented hybrid arrangements will harness the benefits of  office-based work (including staff development, mentoring, collaboration  and observational learning etc.), as well as maintaining a measure of flexibility, which will support employee engagement and trust.

  6. Career Development – Ensure there are opportunities for career development which are easily recognisable to employees. Employees who cannot see growth and development in their future at their current employer, may be more likely to move on to new jobs.

Navigating the coming months may be a challenging time as we begin to live with COVID-19, however the above steps aim to assist employers from being detrimentally impacted by any increase in Australian resignation rates.

[1] Sydney Morning Herald, ‘Workers are empowered’: The four factors driving America’s ‘great resignation’ dated 13 November 2021.

[2] Business Australia, ‘Job ads at record high but applications slump’ dated 16 November 2021.


Georgie Chapman, Partner


Dean Armstrong, Associate


This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.