4 lessons CEOs should remember from ‘The Great Resignation’

In the second quarter of 2022, a workplace phenomenon known as “The Great Resignation” (or, as we referred to it at Vistage, “The Big Upgrade“) reached its apex, with workforce quit rates soaring to a staggering 4.5 million.

A post-pandemic surging labor market, coupled with unprecedented job market transparency and soaring compensation, created a flood of “quits” as workers looked for and found better jobs, higher wages, better working conditions and more flexible work arrangements. “The Big Upgrade” left many companies struggling to retain talent and unable to fill vacancies efficiently.

Since then, the labor market — though resilient and still showing overarching strength — has settled, with quit rates dropping back to numbers reminiscent of mid-2017. This signifies a shift towards a more normalized hiring environment, with the demand and supply of labor beginning to stabilize.

Vistage’s recent survey of CEOs echoes this sentiment, with 38% saying hiring has become easier since the start of the year, compared to just 10% who say it is more difficult. Similarly, 22% report workforce retention has increased in 2024, with only 8% saying it has decreased. For most, hiring conditions have drastically improved since the frenzy seen in 2021-2022.

These improvements in hiring can be attributed to several factors, but broadly, the gap between the influx of job seekers and job availability has significantly narrowed.

Employers are seeing decreased competition for talent, while employees find it trickier (and slower) to find new roles and better offers compared to a few years ago when a bigger salary was seemingly a click away.

Still, with a growth cycle expected to pick up in 2025, leaders must think long and hard about the lessons they’ve learned over these last few years.

In the following, I’ve listed 4 ways some employers are doing a better job at keeping and attracting talent, which will prove to be critical differentiators when the job market inevitably picks up steam:

1. Better at hiring

Organizations that have dedicated time and energy to strengthening their hiring capabilities will be best prepared for the next quits cycle. By enhancing HR internal competencies, maintaining a steady pipeline of potential future talent, and integrating advanced technologies like artificial intelligence into recruitment, companies can speed up their hiring processes and improve the quality of hires.

2. Increased focus on retention

“The Big Upgrade” underscored the immense importance of retention. Companies can never win what we call “the talent wars” if they consistently lose top employees. As a result, organizations have become increasingly focused on understanding what keeps employees engaged and happy in their current roles, from offering competitive salaries to providing flexible work arrangements to prioritizing employee well-being and recognition.

3. Connection to culture

Workplace culture has become a significant aspect of the modern work environment. Businesses today are expected to provide a work environment that aligns with their employees’ personal and professional growth aspirations. Employees who feel connected to their organizational culture are four times as likely to be engaged at work, 62% less likely to feel burned out and 43% less likely to seek new job opportunities elsewhere.

Employers who can make employees feel connected to the company’s mission and its employees will stand out from competitors and keep talent from looking elsewhere.

4. Remaining agile

While the hiring landscape appears stable now, history has proven its susceptibility to economic conditions, technological advancements and cultural shifts. An ability to remain agile and adapt strategies to align with broader economic indicators and internal business metrics has never been more critical. Further, leaders who are proactively testing and implementing automation and AI will have the upper hand, as these types of technologies are already beginning to make significant impacts across industries. Those who are slow and resistant to change risk falling behind.

The current lull in the competition for top talent won’t last long. As the 2025 growth cycle arrives, CEOs must prepare for a much more challenging hiring and retention environment. The lessons learned from “The Big Upgrade” will prepare organizations for the coming crunch — or will be forgotten as organizations struggle to keep up with surging quit rates and spiraling retention, once again negatively impacting organizations’ ability to perform.

Those who remain focused on retention and prioritize their employees will be prepared when the labor market regains momentum.

This story first appeared in Inc.

Related Resources

The CEO Pulse: Hiring and Resource Center

Future-proof talent: What matters to tomorrow’s workforce matters today [Webinar on-demand]

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