The Great Resignation

_{Start 2020 – Mid 2020}
When Covid struck, there was a wave of layoffs and employees were fired all across the world. Employees that remained, lost trust in their employers, wanted to raise their voice, but with a fear of a big recession coming, kept quiet. Also, people laid off, were mostly in the lower performance bucket, hence the fight for them was not worth as much in the minds of most employees.

_{Mid 2020 – End 2020}
Then came the yearly performance management. Note that yearly performance management cycles expect a bell curve for ranking and grading employees. 5% to 10% employees end up in the bottom and depending on further discussions, could be retained or laid off. And the managers had already laid off the bottom rung folks in the previous layoff spree. So this time around, people who were doing their job at par with other employees, were put in the lower brackets due to rigid policies. Some were retained, but many laid off as the markets were still to pick up. This was a second hit to the already troubled mind, with Covid there was bad news all around, and then there were layoffs of their colleagues and friends.

Fortunately, the IT market picked up by end of 2020. Let’s spend the couple of next paragraphs to understand how and why.

1. The client perspective:
Due to Covid, most clients had to agree to get their services delivered remotely. This gave a huge boost to acceptance of cloud based solutions and remote working. Accepting cloud based solutions meant spending more on Technologies like Data, AI, Blockchain, Security, etc. instead of Infrastructure. And most client leads were ready to shift their Infrastructure and Services to the Cloud, since reducing costs by automating jobs and focusing on the customer experience was always a priority. With Covid + Cloud + remote working, this objective got a huge boost.

2. Big Tech perspective:
Seeing this change in Client acceptance levels, big tech and big service providers set aside Billions of dollars to capitalize on the opportunity. Templatization of Industry solutions happened at break neck speed. For example, virtual agents replaced thousands of call center workers with Industry specific templates being created for Banking, Telecom, Insurance, Travel, Hospitality, Retail, ……, everything. Everyone wanted a piece of the Cloud, and Cloud based solutions.

_{End 2020 – End 2021}
Job opportunities started pouring in. 2 things happened almost in parallel:
1. People who were laid off got jobs with even better salaries than they previously held. People who stayed back at the organization, realized that they could get better packages if they jumped ship.

2. Looking at attrition rising, companies gave increments and promotions to all employees mid-year. Note – until this point in time, most people receiving promotions were those who deserved a bump up. These were mostly people who had missed out on the previous cycles in 2020 due to budget cuts.

Thus began ‘The Great Resignation’ – the grass was definitely greener on the other side.

Due to a surge in demand for digital / cloud based solutions, IT job demands hit through the roof. All gloves were off. Organizations went into salary wars. Recruiting anyone who just could define what is Cloud, Data, AI, Security, Blockchain, etc. to meet the hiring demands. Promotions were provided every quarter to fill up some higher positions. This time around, these were not necessarily deserving people. Nor ready for the next level. And hence, quite a few people, who were not deserving, were either hired, or promoted.

The market was overflowing with opportunities. And a 3rd thing happened: those employees who had ambition and some money in the bank (or knew people with money in their bank), went ahead and quit. They built their own start-ups and utilized their own networks to service clients globally.

_{Start 2022 – to date}
At the same time as IT Industry was reaping the benefits of a dilapidated physical world, war started in Europe. And quickly turned into a Global cold war. Leading to a slowdown in global, traditionally considered as developed economies. These traditionally developed economies also happen to be the geographies generating most of the IT demands.

Markets and budgets are not the same anymore as they were over the last 2 years. Employees have now become used to lavish pay raises.
Some who were not promoted, although their colleagues were, are now expecting promotions.

Due to high demands and low availability over the last couple of years, people have had to do much more work and lost their work-life balance. But staying at home, working remotely, has also brought them closer to their extended families.

In summary:
By the start 2022, around January, we ended up with:
1. Employees with super beefed up salaries
2. Senior Management in organizations with little experience and big imposter syndromes
3. Employees quitting to build startups creating niche products and services

And today, as the world economies slow down, budgets reduce, client pockets are empty, inflation is through the roof, employees are complaining about:
1. Low salaries & lack of promotions
2. Uncaring or inefficient leaders
3. Meaningless work & poor workplace flexibility

The solution being recommended is
1. Increase employee salaries and benefits
2. Leaders should inspire their staff
3. Better career development

My thoughts are as follows:

1. Employees have never ever been happy with their salaries or promotions. This is nothing new. Increasing salaries and giving random promotions is only going to complicate the problem even further, as organizations become less profitable and competitive.

2. Instead focus has to be on building a competitive HR and Leadership Team; train them better and expose them to real world business scenarios. Traditional solutions cannot be implemented forever – and difficult times call for courage and smart solutions.

3. Provide better work life balance for your employees. Leadership teams facing the client need to stand up and push back on forced timelines. Focus on different styles of working and value based pricing models where possible.

4. Technology is changing at a rapid speed – such that has never been seen before. Employees are having to re-skill every couple of years sometimes. And have to keep up with new developments almost on a monthly basis. At such times, we need to relook at our operating models and try to identify a balance between employee re-skilling and employee job satisfaction.

5. Last, but not the least, get the office back in place. Restart travel between client and offshore locations. Especially for IT, clients and service providers should be co-located and see each other every day to be able to develop a Living System. Remote collaboration leaves a lot to imagination, and results in sub-optimal outcomes.

Thank you for reading this article. Hope this added value for you and will help to better acknowledge the situation we are in and provide realistic ideas / solutions. Signing off!

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