The U.S. Bureau of Labor Statistics report shows that the number of quits in October 2021 stayed at 4.2 million. Interestingly, this wave of leaving is not tied to a specific industry or type of job. It is across the board. In August quits increased chiefly in accommodation and food services (+157,000); wholesale trade (+26,000); and state and local government education (+25,000) to the total of 4.3 million. The so-called “Great Resignation” has started. September data supported the trend with 4.4 million quits. And the data from October shows that it continues. Compare this with 3.3 million quits from January 2021.
What is behind this unprecedented wave? It seems that it might be, wait for it, optimism. With various pandemic-related reliefs like the relief checks, student-loan forgiveness, or rent moratorium, even those who live from paycheck to paycheck now got the opportunity to take some risks and switch jobs they disliked for better ones. With low unemployment and companies hiring, it seems that the time is right to get the job you want instead of sticking with the job you hate, only because you are afraid to change.
Rampant entitlement and abuse by customers
Especially in the travel, hospitality, and retail industry, this trend seems to be accelerating by the simple fact that customers behave with greater disrespect than ever before. If you are an employee working for low pay and you are being constantly yelled at by customers, you will at some point decide that enough is enough. The idea that customer is always right gave rise to entitled egoistic customers who don’t care about others but only about their own satisfaction. Many customers frustrated with their lives need to show their superiority and exercise control at least somewhere, and department stores, restaurants, or planes seem to be a good place to show how much better these customers are than the staff that is providing the service.
In healthcare, jobs became even more demanding than before the pandemic, especially since many patients are becoming increasingly aggressive towards those trying to save their lives.
Bad or downright toxic bosses
For the high-paying roles that allow remote work, the Great Resignation is driven by different reasons. It is not the customers who are the problem but the toxic bosses or the lack of flexibility. Many managers don’t know how to manage in the hybrid or fully remote workplace, and employees realize they don’t want to work for incompetent or toxic bosses.
In the pre-pandemic Udemy 2018 Employee Experience Report, 60% of respondents believed managers need to get more training, and 56% said people are being promoted to management too early. 51% of Millennials/GenZ noted they are likely to quit because of a bad manager. This also applies to 43% of older workers.
In June 2021, The Predictive Index ran a survey of 1,906 employees from numerous industries. 48% of respondents said they thought about changing a career within the last 12 months. More importantly, 63% of those who believe they have a terrible manager considered leaving. This is in stark contrast to the 27% of those with good managers planning to leave.
These workers have many opportunities and, therefore, lower willingness to put up with disrespectful behavior within the company. Some may also overreact due to uncertainty of whether the company will allow them to keep working from home. They jump to an organization that has already declared its remote work policy. The chances are good that most companies will be significantly more flexible than before the pandemic, so there is no reason to panic even if the management didn’t set the remove work policy yet.
Compensation and opportunities still matter
The Achievers Engagement and Retention Report that came out in early 2021 showed how Covid-19 impacted employee habits. 52% of respondents planned to look for a new job in 2021. The top three drivers were the desire for better compensation and benefits (36%), better work-life balance (25%), and the need for more recognition for the work (16%). 46% of respondents felt less connected to their company since the pandemic, and 42% noted that the company culture has diminished during forced remote work.
Ian Cook and his team conducted an in-depth analysis of the resignation trends and saw the most significant increase amongst mid-career professionals of ages between 30 to 45, with the 40-45 age group resignations increased by the biggest amount of 27.9%. This trend was visible for both men and women, and it applies even to people in managerial roles. It appears more and more people in their mid-life are reevaluating their priorities and career options. Interestingly, while historically, the biggest number of resignations are amongst those in the 20 to 25 age range, their resignation rates decreased during the pandemic.
Flexibility is the king
In September 2021, McKinsey published results of an employee survey that included 5,774 people and an employer survey of 250 talent managers. 40% of employees indicated that they are at least somewhat likely to leave their job in the next three to six months. This was confirmed by 53% of employers who saw increased voluntary turnover than in previous years. What makes the recent resignation wave different from the past is that many employees are willing to quit even without having a job lined up. 64% of those considering leaving claim they will leave even without securing a new job. In fact, 36% of those who left their job in the last six months didn’t have a new contract in hand. But they didn’t need to worry as the number of job openings in October 2021 in the U.S. was at 11 million.
As McKinsey’s report notes, even those who don’t consider leaving may change their minds if being approached. They may realize that the options available to them may have expanded dramatically with the increased number of jobs that offer remote work. This is well supported by data that indicate that among the employees who are not considering quitting, 65% quoted as the main reason the fact they like where they live, and there are not good opportunities locally. This, combined with 87% of people who took jobs in new cities in the last six months without the requirement of relocation, can increase the pressure on those who are content where they are right now.
Sense of belonging and being valued
It seems that a lot of the attrition is simply driven by a disconnect between what the employees consider important and what their managers and companies see as important. While both sides finally consider work-life balance important, the alignment is missing in other areas. McKinsey’s report highlights that while employees view being valued by the manager and the organization and have a sense of belonging as most important, organizations consider it less important. A bit less extreme but still a visible disconnect is in having caring and trusting teammates, a flexible work schedule, and potential for advancement. These are seen as somewhat important for employees and less important for employers. Many employers still see the relationship with employees as business transactions, while employees look more at the social factors.
Ron Carucci then points to the fact that 54% of employees who are considering leaving the company don’t feel the organization values their work, and 51% don’t feel they have a sense of belonging. Employees need to feel that they belong and that someone cares about them and values their contributions. Without that, even a salary increase is only a stop-gap measure that won’t last too long. The employee will eventually leave anyway. Social connections are what the pandemic and remote work took away. Building a sense of community in a hybrid or fully remote workplace is much more challenging.
Companies are getting desperate
The sudden increase in attrition in 2021 causes many companies to act in desperation. Escalating salaries, special bonuses, and various promises are being handed out to keep people in the company. However, these quick fixes are usually not fixes at all. They are seen by the employees as a transaction, “if I don’t leave right now, I get some money for it.” Yet, they very rarely address the real issues of why the employee wanted to leave in the first place. The net outcome is that the employee stays a bit longer, being a bit less productive as they are not as engaged as in the past. Many employees are tired of the pandemic and tired of the rote of their lives. They are looking for purpose, human connections, and the feeling that someone cares and appreciates them. They want to feel part of something bigger and be recognized and valued for who they are and what they bring.
Strategies to improve retention
The main measures you can take to lower the attrition will most likely be the social ones:
- Ensure employees understand their purpose and see the impact their work has on others. It is unnecessary to present a vision of how the company changes the world. It is much more important to help each employee see their personal impact. For example, it may be as little as showing how the accountant’s work helps everyone be paid on time and how grateful they are for that. Because of the accountant’s good job, the employees can pay their mortgage on time, buy food for their kids, and focus on their job, not worrying whether they get paid.
- Provide personal development and career opportunities. Focus on mastery so employees can feel good about the good job they are doing and they see that they are getting better at something
- Focus on social connections, community, and culture. People need to feel they belong, that others care and that there is a collective, a community they feel good being part of.
- Treat employees as human beings with lives outside of work and be understanding of what they and their families need. Treating others with respect means listening and seeing them as adults who mean well and will always do their best if being treated right.
- Offer flexibility in as many aspects of work as possible. While many people need to understand the guidelines, they don’t necessarily want hard rules. Providing suggestions while leaving the final decision on the employee and making sure they are not penalized for whatever decision they make is the key.
Have “stay conversations”
You can bundle up all these suggestions into what Denise McLain and Iseult Morgan call “stay conversations.” These are proactive and preventive conversations between the employee and their manager and have two primary goals: to discover potential issues and risks of employee leaving; and to build trust and show that you care. If you then take action based on the conversation, you build loyalty and increase commitment and engagement.
Stay conversations are basically coaching one-on-one meetings where you don’t talk about employee performance and productivity but instead focus on their life values, passions, career goals, and anything that will help them discover what they need to be successful in their job. These need to be really deep positive conversations focused on the future. You need to first build trust for the employee to truly open up. These conversations should be a regular occurrence and need to end with a clear set of action items and accountability so the employee can see progress.
Putting it all together
Before you dismiss the attrition at your company as The Great Resignation and that there is nothing you can do about it, consider looking at data specific to your organization and your industry. Don’t try to throw money at the problem but dig into details to truly understand what is going on in your teams and then address the specific root causes. In your analysis, include data like compensation, last increase, the time between promotions, tenure, development opportunities, performance, and how it differs between socio-economic groups or teams. Is it a particular manager that drives people away, a culture that doesn’t cater to a specific group, a lack of flexibility of the company policies, or a transactional culture where people don’t care about each other?
Stay conversations, and career coaching should be part of the leader’s repertoire. The main goal is to help the employee be successful. Not necessarily help the company to keep the employee at whatever costs. It may well happen that after a couple of sessions, the employee realizes that they are in the wrong job or the wrong company. And that is fine. However, more likely is that they realize what they need to do to enjoy their job more and that they work for someone who cares and will help them. That they belong. These are the best reasons to stay.
What is your take on the topic? Is The Great Resignation a thing? Do you think it will pass over, or is it a new normal? What do you consider a reasonable tenure with one company? Did you have a new contract already signed when you left your last job? What do you believe the main reasons for The Great Resignation are?
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