Request demo

What is the Great Resignation 2021? Why should you care about it as a sales manager?

7 minutes read

We have witnessed over two years of the COVID-19 pandemic which has irreversibly changed the way people think about their careers. Now as the pandemic recedes, millions of workers are saying “I Quit”. And we are just starting to realize the effects of those words

As life gets back to normal, people are rethinking their work situation and seeking to have

  • Work and personal life balance
  • Flexibility in their daily work schedule
  • Work satisfaction
  • More money
  • And the ability to learn more and grow

For organizations that aren’t adopting this trend fast enough, it’s leading to a dramatic increase in resignations, which the media is now referring to as The Great Resignation.


Definition Time

“The Great Resignation” is exactly what it sounds like– people are choosing to leave their jobs in unprecedented numbers. At the onset of the health crisis, people were holding onto their jobs for dear life (even when hours and conditions were terrible) for fear of not being able to find other, perhaps more fulfilling employment as the world shut down.

Now, over a year later, people are simultaneously more confident in their ability to find work and more concerned about their quality of life. They are hitting the job market and looking for roles that make them feel fulfilled.

Consider these statistics:

  • According to the U.S. Bureau of Labor Statistics, a record of 4 million Americans quit their jobs each month in April, May, June, and July of this year (source).
  • Additionally, a recent Microsoft survey shows 40% of the global workforce is considering leaving their jobs this year (source).
  • According to HubSpot, the average sales turnover rate is 35%, compared to an average turnover rate of 13% for all industries. That’s nearly triple the average turnover rate (source).

This shows that while no industry is immune to the Great Resignation, the salespeople may be particularly susceptible to the phenomenon.


A detailed study of this workforce shift called the great resignation

Labor and workplace experts have predicted this post-pandemic resignation boom long back. A lot of reputed organizations like visier and limeade have also conducted various studies with over nine million employee records from more than 4,000 companies to understand this shift better.

Below are some findings from their studies

Some highlights from the studies:

  • 40% of employees cited burnout as a top reason for leaving.
  • Employees were so dissatisfied with their situation that more than one-quarter (28%) of all respondents left their jobs without another job lined up.
  • Employees were primarily attracted to their current job based on the ability to work remotely (40%) and other forms of flexibility.
  • An additional 24% reported not being restricted to complete job responsibilities during set working hours as a top attraction.
  • Job changers are generally happy they made the switch to a new role.
  • On average, respondents reported a 22% boost in feeling cared for as an individual by their new employer and a 22% improvement in comfort regarding disclosing a mental health condition compared with how they felt at their previous employer.


Top reasons why employees have quit

  1. Burnout: 40%
  2. Their company going through organizational changes: 34%
  3. Lack of flexibility: 20%
  4. Instances of discrimination: 20%
  5. Contributions and ideas not being valued: 20%
  6. Insufficient benefits: 19%
  7. Personal well-being not supported by the employer: 16%


What did the job switchers seek out in a new job?

  1. Ability to work remotely according to personal preference: 40%
  2. Better compensation: 37%
  3. Better management: 31%
  4. Better company reputation: 29%
  5. Better work-life balance: 26%
  6. Flexible work schedule: ​​24%


  • Resignations are rising most frequently among mid-career workers: While resignations across all the age groups saw an increase between August 2019 and August 2020, the age group of 20-25 actually saw a decrease in resignation by 20.3%.
    • Employees between the ages of 30-35 saw an increase in resignation by 21.5%
    • Employees between 35-40 years of age saw an increase in resignation by 19.6%
    • And employees between 40-45 saw the largest increases in resignations by 27.9%
    This data signals that workers more established in their careers have continued to shift jobs.
  • Manager resignation rates have increased during the pandemic: As of December 2020, the resignation rate for managers was nearly 11.8% higher than the previous year. While increased responsibilities and burnout likely played a major role, gender differences were also a factor. Female managers were more likely to leave the workplace altogether to take care of their families during Covid-19. And male managers were more likely to jump ship to another role.

    Well, this one comes as no big surprise because previously various workplace studies uncovered that one in three female managers were considering exiting the workforce altogether.

  • The healthcare and high-tech industries are seeing the most resignations: Resignations in the tech field have increased 4.5% between March 2020 and March 2021. The healthcare industry also saw resignation rates rise by 3.61% in the same time frame. There is a significant cause for concern that healthcare workers, facing increased job stress and burnout, are at high risk of turnover this summer.


What is the impact of this great resignation on Sales?

For sales leaders, the Great Resignation is not so great. Moreover, this might be their biggest obstacle to meeting their goals. Though many sales leaders recognize this risk, they haven’t calculated the magnitude of its impact. Here we are going to explore the explicit and hidden costs of sellers leaving.


Explicit costs of Sales Turnover

According to Gartner’s research, the average cost of a departing employee is nearly $19k. While this isn’t specific to sales, it should give you an idea of the magnitude of the direct impact of the great resignation on your organization. Hypothetically, if you have a salesforce of 100 sellers with an 18% turnover, that’s a $335k consequence.

For sales organizations, this math gets much trickier when you factor in hidden costs.


Hidden Costs of Sales Turnover

Hidden costs are those dollars at risk before you even recognize you have an issue. The stunning reality is that the loss of even one sales rep causes a hidden effect of buried costs that directly slams the bottom-line profits. But at most organizations, hardly anyone will notice this.

While companies spend most of their time worrying about small expenditures at the office, they fail to realize that losing one $75,000-a-year employee could quietly cost them up to $150,000.

Consider just a few of the wide-ranging, hidden costs that contribute to this astounding number:

  • Damage to team morale and performance
  • Lost prospects and customers
  • Potential lawsuits
  • Lost company and product knowledge
  • Overworking of remaining employees
  • Lost connections and experience
  • Diminished work productivity
  • Distraction from key business priorities
  • Recruitment of employee replacements
  • New-hire training and onboarding
  • Management time diverted to new hires

These hidden and opportunistic costs are difficult to calculate as they vary by an individual’s performance, role, and business model. Instead, it may be easier to calculate these costs in terms of months.

Let’s call it Turnover-Related Risk in Seller Productivity Months. To calculate this metric, consider the following:

  • The average turnover
  • The estimated productivity lost due to disengaged sellers
  • The number of months it takes to backfill
  • The onboarding of sellers


For calculating Turnover related risk in seller productivity months, let’s again take the example of 100 sellers and a turnover of 18%. And let’s consider the following assumptions:

  • Pre-turnover distraction = 2 months per seller
  • Pre-turnover productivity loss = 25%
  • Time-to-backfill = 2 months
  • Seller onboarding = 8 months with the following productivity build:
    • 0% productive for 0-3 months
    • 50% productive for 3-6 months
    • 75% productive for 6-8 months

Based on these assumptions, the turnover-related risk in seller productivity months is 7 ½ months per turnover. This means that every seller leaving costs the sales leader 7.5 months of productivity. When compared in the aggregate, 7.5 months across 18% turnover equals 135 months. This is 11% of the total months. Therefore, in this case, the sales leader has an 11% risk due to voluntary turnover. That’s significant.

Sales leaders must not be a victim to this circumstance. Seller turnover is bound to happen but it can be mitigated, especially for strong performers. In our next blog, we are going to discuss the measures that sales leaders can take to mitigate this great resignation. Sales leaders must not be defensive and reactive. They must turn offensive and proactive.


Learn how to reduce work-from-home fatigue and improve your sales reps productivity

Work-from-home fatigue and ways to increase your sales reps’ productivity


Want to make working from home interesting for your employees? Get ideas from the below blog on how to gamify the work-from-home activities for your reps

‘Work from Home Warriors’: Sales Training Game for Remote Sales Teams


Learn how you can use gamification to improve employee engagement at your organization

Improve Employee Engagement of your Remote Teams with Gamification

Published on Mon Nov 15 2021

Ready to double your sales numbers?

Schedule a demo with our team to see how SmartWinnr can drive sales productivity in your organization. Or talk to us about your challenges and if SmartWinnr can help.

Request demo Free Consultation