The Great Resignation: Is it Panic or Prosper for Direct Sales?

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It’s impossible to grow into a multi-million dollar direct sales company without an effective recruiting and retention strategy.

After all, distributors and affiliates are why you chose the MLM path in the first place. Your product or service offers a solution to a problem. And direct sales is the best vehicle to get your solution in the hands of the largest number of people, as quickly as possible, without a ton of overhead.

To grow, you must focus on recruiting and retaining the best of the best. You must solve a problem in the market, offer value and purpose to your independent salesforce. And that creates a profit for your sustainable business.

However, the Great Resignation has turned talent acquisition and retention of top its head. How are direct sales companies impacted? Will your current strategy be relevant when so many are leaving the workforce? Is this a problem or an opportunity for direct sales?

In this two part series, we’ll answer these questions and walk you through our strategies to attract and retain top talent while individuals are walking away from everyone else.

The Great Resignation – Part 1 – Content Outline

What is the Great Resignation?
Should Direct Sales Companies Panic or Prosper?
Biggest Contributors to Leaving the Workforce and Why You Should Care
Leaving the Workforce or Quitting Work for Good?
Does the Great Resignation Make Financial Sense for Workers?
Next Steps for Direct Sales Companies

What is the Great Resignation?

Anthony Klotz, professor at Texas A&M’s Mays Business School, coined the term The Great Resignation in 2020. Professor Klotz monitors the psychology around employee behavior, including reasons and timing for resigning. While others became optimistic that employment numbers would return to normal after the vaccine rollout, the professor saw things differently. In an interview with Bloomberg, he suggested we would continue to see higher than average rates of resignation. And that’s when he first used the term “the Great Resignation.” Throughout the rest of 2020, 2021, and first quarter of 2022, we’ve seen Professor Klotz’ ideas materialize in the following sobering stats:

The Office of Bureau and Labor Statistics reports over 47 million people quit their jobs in 2021.
While November 2021 saw record high numbers of 4.3M resignations, monthly numbers continued near record highs into the first quarter of 2022.
In 2020, 74.4 percent of direct sales distributors were women.
As of the end of April 2022 (the latest data released as of this writing), there were 11.4 million job openings. March and April 2022 showcased 20 year record high job opening numbers.

The Great Resignation has affected companies across the US and direct sales companies are not immune.

Read The Top 5 Reasons People Leave Their Direct Sales Companies

Time to Panic or Prosper?

With record numbers of resignations and job openings, should direct sales companies panic? Or is this a strategic opportunity for growth and relevance?

Our direct sales experts believe your company can thrive during the Great Resignation. How? By becoming dream keepers for those who promote your products, services, and business opportunity. You earn and gain loyalty from top talent by getting in touch with their values and then helping them see how their dreams can come true simply by sharing something they’re passionate about..

Let’s get some insight into dream keeping. How do you create value, meaning, and flexibility so your company attracts and keeps the best? It all starts with why women leave the workforce.

Biggest Contributors to Women Leading the Great Resignation

Why are we focusing on women in this article? Because women led the Great Resignation. They accounted for 63% of all jobs lost from 2020 – 2022, according to the National Women’s Law Center. And since they already make up 76% of direct sales distributors, focusing on women means focusing on our majority audience.

If you’re wondering why women have resigned en masse and have not yet returned to the workforce…it’s layered but understandable.

Roles for Women Impacted Most

Women served in the highest impacted vocations. Teachers, nurses, customer service, retail, and cashiers rank among the top 10 occupations for women. Many of these jobs reduced their workforce at the beginning of the pandemic. Others required unending hours and stress. Consequently, women were forced out or burned out.

Childcare Access Reduced

The pandemic reduced access to affordable childcare. The US Chamber of Commerce reports 58% of parents were unable to find childcare in 2021 due to forced closures and reduced hours. Eventually, many childcare centers folded. Now, 26% of parents report an inability to afford childcare.

Pay Rates Deciding Factor

So, if childcare becomes inaccessible or unaffordable, who stays home? On average, women make less money than men. When faced with a choice of who stays home to care for children, the parents typically choose to lose the smaller paycheck.

Money Over People

Other women cite dehumanizing work situations as their reason for leaving. Values of companies became clearer during the pandemic. When literal health and safety were on the line, it was easy to see which companies believed in the value of the person and which ones put the bottom line first. It created a clear picture of those who prized worker input and those who created dictums. In other words, the refining fire of crisis exposed cracks in the “people first” corporate culture. Many women said they would rather quit than continue working in those environments.

Caring for Aging Relatives

Still other women juggle work with caring for older family members. And the mandatory return-to-the-office policies interfered with their ability to provide the care needed.

Care-Giving Roles Without Support

Speaking of care giving, women predominantly fill care-giving roles in the workforce. During the pandemic, we asked care givers to work unreasonable hours. We asked it with little support or flexibility. And we have not offered anything more reasonable to date. Consequently, 1 in 4 women in 2020 reported considering leaving work due to burnout. That number climbed to 1 in 3 women in 2021.

What Does it All Mean?

Perusing the list above, there’s an obvious theme. Women predominanty are the ones taking care of people. It’s no wonder they thrive in direct sales! And they’ve been taking care of people at the expense of their time and priorities, while putting their dreams on hold. They’re often walking away because they lack flexibility, support, and the opportunity to contribute to how things are done.

You can understand why women have left the workforce without returning. And understanding their motivation for leaving helps us see some workforce deal breakers. It also offers a view into incentives we can offer to make direct sales roles irresistible to them. But first, are they leaving or are they leaving?

Gigging for Money

Many women who have left the workforce haven’t completely stopped working. They just stopped working at their full-time job. Resignations may be at an all-time high, but the US unemployment insurance claims continue to decrease through May 2022. So, where are all the women going?

To understand what’s happening with employment numbers, we have to “gig” a little deeper.

What do freelancing, start-ups, part-time work, and independent contracting all have in common? Two things.

Women who have left the workforce, and
a perceived increase in flexibility.

Women are turning to opportunities that let them design the life they want. Enter the growing gig economy.

In a 2022 survey by FlexJobs, 77% of respondents chose remote work and flexibility as the number one benefit an employer could provide. Fifty-six percent of respondents cited flexibility in the workday as the best way a company can support their employees.

Extra! Extra! This is fabulous news for direct sales companies.

All of this is great news for direct sales companies. Many women don’t want to work in traditional employment roles. However, they do want to work! Work provides many women with meaning and a sense of freedom and control in their lives. We’ll discuss all the variety of opportunities for direct sales companies more in part 2.

However, let’s walk through the financials, so we can prepare to offer the right incentives for this gold mine of available talent. Interestingly, dreams sometimes waver as reality sets in. Is there a payoff for building a flexible career that supports the lives of these women dreamers?

Working the Numbers to Make Money and Sense

Inflation is on the move. And Federal Reserve Chair Jerome Powell has worker pay increases and open positions in his sights.

Increasing Interest Rates

The Federal Reserve Chairman and other Fed officials have stated worker pay increases and high numbers of job openings are a driving force behind their recent decisions to increase interest rates. In other words, they’re hoping higher interest rates will keep people working, without increasing their pay, while reducing the number of empty job openings.

An increase in interest rates, along with supply chain issues, has increased prices. That translates into decreased spending power for the same amount of money made just a year ago. The increase in the cost of goods is at the highest level since 1981.

Even if women make the same amount of money in the gig economy as they did in their full-time roles, it’s tougher to cover their expenses.

Making More Money to Cover Price Increases?

Remember, 77% of those leaving traditional jobs were doing it for the flexibility, not the money. As a matter of fact, in a report on data from tens of thousands of loan applications, 85% of gig workers earned less than $500 per month.

That could be by choice. In other words, work more flexible hours, earn less money. Or it could be because 55% of all gig workers maintain a traditional job as well. The effective side hustle. Either way, though, that’s tough. With 45% of gig workers only doing their gig, and 85% of them making less than $500 per month, that doesn’t cover lost wages and price increases. And that definitely doesn’t lead to financial independence and stability.

High Start-up Costs

But what about those brave souls who start a business rather than freelancing? With a typical business, start-up costs are high. Some estimates show entrepreneurs need at least $10,000 – $20,000 to get their business rolling. Physical products cost even more when you factor in manufacturing and product development.

At the same time, access to capital is low…especially for women. Most businesses need equipment and software and tax and insurance professionals. And those all cost money. But access to start-up money is not easy to find. And with increasing interest rates, it’s EXPENSIVE if you can get it.

Forbes reports that banks typically base loans off of current income vs future income. If you’ve quit your job, that takes a bank loan off the table.

Next, the Small Business Administration typically wants a down payment or some kind of collateral to secure a loan. For most people starting a new business, that’s not an option.

So what do experts suggest? Forbes financial experts recommend dipping into savings, using retirement accounts, asking friends and family for a loan, or even crowd funding to get your new business off the ground. The most sound advice they offer is getting pre-orders to get money in the door.

What About Benefits?

If the pandemic has taught us anything, it’s that medical insurance is a non-negotiable. But most gig economy workers don’t get it through their work. So, the trade off to flexibility, includes sourcing and purchasing benefits like medical insurance on your own.

Overall, the numbers for striking out on your own aren’t compelling. Yes, the multi-millionaires do exist, even if just for ads on Instagram and Facebook. But the numbers say the majority of those creating a business for themselves have high costs, less income and less access to capital.

Sounds like the perfect entre for direct sales, doesn’t it?

What Does The Great Resignation Mean for Direct Sales Companies?

To recap, it’s pretty clear. The Great Resignation has set up Direct Sales companies for unprecedented success.

Women are leaving the workplace and are not “returning.” But they want to work. That’s available talent in our ideal target market for distributors and affiliates!
This female talent rejects the traditional way of working. They value flexibility and the opportunity to care for their loved ones. Flexibility is built into our direct sales business opportunities.
Women THRIVE on caring for others. They are drawn to nurturing roles. It’s often why they’re leaving the workplace, to care for others. And they are great at providing support, communication, and praise. Pure gold for distributors and affiliates.
Expenses climb higher for living and for starting a business. Women want financial stability and freedom. They want to contribute to a higher quality of life for their families. And they have a harder time accessing capital to start and run their own businesses. We can provide low capital investment career opportunities that create financial resources for women.
Women crave the opportunity to create purpose from their work. If our products and services solve a problem for those who buy it, women can find deep satisfaction in providing solutions.

So, the Great Resignation. Should direct sales companies panic, or is it our time to shine? We believe the Great Resignation provides an amazing opportunity to grow your salesforce and your direct sales business. In part two of this series, we’ll cover the top strategies you need to attract and retain these ideal available workers.

In the meantime, let’s see the glass half full. We’re entering a bright new era ripe with opportunity for women and for direct sales businesses.