The Innovation of the Great Resignation

by Sarah Firisen recently spent a few weeks in the UK, which is suffering from a labor shortage post lockdown like the US. Though, unlike the US, some of the UK’s problems are self-inflicted Brexit wounds. The shortages are rippling through every sector, and as in the US, that includes hospitality. Coming out of lockdown, no doubt initiated by hygiene concerns, some restaurants I visited in New York used QR codes instead of handing out menus. Combined with contactless ordering, this seemed to be even more prevalent in the UK. We found QR code menus and contactless ordering in many restaurants and almost every pub we ate in. I loved it. It was quick, efficient, and accurate. We were able to pay immediately and didn’t have to sit around waiting for a check. And of course, as well as the hygiene rewards of contactless ordering, it somewhat mitigates the staffing issues. Having gone down this path, it’s hard to see why restaurants would go back to using only wait staff. 

I experienced the opposite of this innovation on a recent visit to Macy’s in Herald Square in New York. Visiting the largest department store in the world is never for the faint of heart, but during any kind of sale, it’s pretty hellish. And it seems they’ve managed to make this experience even worse post-COVID. It used to be the case in the shoe department that you’d find a style and then wave down a sales associate. They would then disappear into the back and find the right size. Now, I had to wait in the long line at the cash register to ask the harried sales assistant who was also trying to operate the cash register. 

I’m assuming that this is also related to staff shortages. The sales assistant used a mobile app to scan the barcode on the shoe and lookup size availability. Here’s what I don’t understand; Macy’s has a pretty good customer mobile app. You can use it to scan the barcodes on items to do a price check. Why on earth wouldn’t they integrate the shoe stock lookup app that they already have into the customer app? Then customers could request shoe sizes, and an associate could pull them from stock and bring them out. This seems like a missed opportunity to innovate out of the disruption caused by COVID and its aftermath. 

Some industries and businesses have figured this out better than others.

Contactless ordering has enabled restaurants to turn the customer service challenges caused by lack of staff into customer delight at a more efficient way of taking food and drink orders. Some kinks need to be worked out. I had to download a different app at almost every pub and restaurant, a particular challenge when there wasn’t free Wi-Fi. But this was trivial compared to the irritation I felt at Macy’s. I will never shoe shop there in person again. They’ve taken an already unpleasant experience and made it much worse. 

The great resignation has hit every sector. I’ve written and podcasted before about this trend, “COVID lockdown has caused many people to appreciate having more freedom and flexibility in their daily work lives and generally question their relationship to work.” When I wrote that, it wasn’t clear if this was a momentary blip. But in the US alone, “more than 25 million people quit their jobs in the first seven months of this year.” I’ve waited tables many times in my life. It’s hard work. Tiring, underappreciated, not well paid usually.  And post-COVID, there have been too many stories of restaurant workers being abused over mask and vaccine mandates. It’s not surprising people don’t want to go back to those jobs.  

Just under a year ago, I wrote about the innovative business pivots that some companies were undergoing due to COVID and lockdown. At the end of this piece, I quoted a McKinsey study that said, “90 percent of executives said they expect the fallout from COVID-19 to fundamentally change the way they do business over the next five years, with almost as many asserting that the crisis will have a lasting impact on their customers’ needs”. Back then, white-collar companies were focused on enabling remote work. Retailers were focused on new ways to stay in business. The hospitality industry was emerging from the enforced hibernation of the prior six months and hoping that people would want to travel and eat out again soon. At that point, everyone was working on the assumption that, once their employees could come back to work, they would.     

Some industries will be able to innovate themselves out of labor shortages more easily than others. When I was leaving the UK, the entire country went into panic gas buying. This was media-induced hysteria, but with a real issue at its heart, “Of the estimated shortfall of 100,000 truck drivers, about 20,000 are non-British drivers who left the country during the pandemic and have not returned in part because of more stringent, post-Brexit visa requirements to work in the country, which took effect this year.”  Autonomous driving technology and the governance infrastructure we’ll need to have around it isn’t far enough along yet to solve this problem. But it’s not far away. Maybe a shortage of truck drivers will be enough of a spur to make this a reality.                     

That healthcare workers are leading the way in the Great Resignation isn’t a surprise. After two years of burnout during the height of COVID, they’re now seeing ICUs fill up again and are facing abuse from patients. Nothing can replace a compassionate nurse. But there could certainly be more innovation in healthcare that could at least mitigate some of the shortages. For example, RPA, Robotic Process Automation, is one technology that helps with the thousands of detailed, repetitive tasks and processes that happen throughout the healthcare system.  It’s already been embraced by many hospitals, but there are huge opportunities to do more.     

There have been many pieces written about what companies can do to address the Great Resignation.  Many of those focus on managing employee engagement and so retention. And that is certainly a very worthwhile endeavor. But running a parallel track of innovating to manage for a smaller workforce seems to be prudent as well. It wasn’t so long ago that people were worried that automation would put them out of work. Ironically, instead, people chose to quit jobs they hated, and now companies are scrambling to automate to replace them.