Why do people resign in January and what you should do now to prevent them

Why do people resign in January and what you should do now to prevent them!

For most businesses, the end of the year is a time for reflection. A time when final reports land on desks. A time to look at what worked, and assess what didn’t. A time to look back on all the projects, products and services of 2022, and focus on plans for a new year ahead.

Planning and kick-off meetings create a buzz of excitement. The CEO makes a great speech to commemorate the close of another great year, congratulating hard-working teams and reinforcing the company’s values and vision. And the feel-good barometer is at an all-time high.

So, why does January tell such a different story? If your business closes off the year on such a good note, why does it start the next one facing a slew of resignations and costly recruitment needs?

January has consistently been one of the most popular times for resignations for many years. But after 18 months of The Great Resignation, some businesses are still struggling to acquire and retain their talent – meaning this January could hit companies’ retention particularly hard.

If you want to prevent your employees from handing in their resignations at the start of 2023, here’s what to do.

What’s the reason behind January resignations?

Just like your company, employees often spend their holidays reflecting. If your business downs tools for half of December, chances are your workforce has had a good two weeks to think about their careers – and whether their needs are being met.

What your workforce looks for professionally is similar to what they look for in their personal life. Think about it as a version of Maslow’s Hierarchy of Needs – as long as your employee feels satisfied in one area, they’ll naturally seek ways to achieve the next level. If that need isn’t being met, they may look elsewhere.

2023 could amplify this. The current cost of living crisis, combined with tougher times projected ahead and a general sense of uncertainty has resulted in many people feeling insecure. Plus, after over two years of pandemic living and a new generation entering the workforce, employees everywhere are beginning to reconsider what fulfilment and contentment truly looks like.

Five employee needs and how to meet them

1. Physiological. There’s no hiding it: with the cost of living crisis, rising energy bills, and tougher times on the horizon remuneration will be top of mind for much of your workforce. Now’s the time to bench mark your remuneration packages and make sure you are offering the right market value. 

2. Safety & Security. Talk of redundancies, the potential impact of economic uncertainty and budgetary cuts can cause a ripple effect; if your workforce perceives they’re not safe where they are, they might choose to cut and run. Focus on clear, honest internal communications to create a sense of reassurance for your workforce.

3. Belonging. An emotional pull to stay in a business is often the link between your retention, and your employees’ overall contentment. This is as much about feelings of loyalty, trust and connection, as it is about the practicalities of work structure, culture and policies. Spending time on your company’s culture, particularly in a hybrid environment is key.

4. Esteem. Pride in a job, how you do it and who you do it for is central to workplace fulfilment. And with younger generations placing greater emphasis on company values and ethics, this is a make or break factor. Review your brand this December – from your people policies to your sustainability goals – to build a sense of purpose that your employees can be proud of.

5. Self-actualisation. Reaching your full potential looks different to everyone. Diversifying skillsets, climbing the career ladder, or taking on a more meaningful role – your employees will be driven to achieve professional resolutions in the New Year. Listen to what they are looking for from their career, talk about the challenges and offer support and encouragement to help them achieve their goals – they need to know you believe in them. Schedule regular 1-2-1s and this time next year could be a very different outlook…

The talent landscape has changed a lot over the past two years, and with any number of moving factors, it’s no wonder that employee retention and contentment is top of mind for many employers.

In an uncertain economic market, readdressing the fundamentals of being a good, reliable employer will help create a more committed and loyal team, and drive your employee retention. By getting to the core of your workforce’s collective and individual needs, you have a clear roadmap for how to prevent January resignations, and protect your business’ performance year-round.

For more insights, download our Talent Landscape 2022: the State of the Market to help you understand up-to-date hiring trends across all areas of marketing and communications.