By now you have probably heard of the “Great Resignation” that is occurring across the U.S. This blog post will explain what has created this upheaval in employment practices. The mass number of resignations is a signal of a shift in the way that employers need to think about talent retention. “
The Great Resignation” is a movement that has put the balance of power back in the hands of employees, who are saying that they want something different from the psychological contract of employment. How can organizations respond in a way that shows you’re an employer where people not only want to work, but give their best? Here are a few reasons that people are leaving their jobs.
Cost of Losing Employees
The
US Bureau of Labor Statistics recently reported 4.4 million “quits” (a measure of the number of people who leave a job voluntarily, rather than through a layoff, redundancy, or discharge) in September 2021. As of November 2021, the total number of job openings in the US was 10.4 million.
The cost of hiring is a reason enough to focus on retaining your people, with a new hire in the US costing an
average of $4,000, according to research by Bersin by Deloitte. The costs could be even greater when you take into account the lost productivity and time it takes to get a new employee fully up-to-speed in the role.
Employers need to pay attention to retaining and taking care of their talent because simply stated, it negatively impacts the bottom line.
Covid Reinforced Priorities
Many employees were forced to work remote and spent more time at home during the pandemic. This increased time at home allowed employees some physical separation from their co workers and office culture. In turn this separation allowed many employees to take a step back and consider how out of whack their work- life balance had become. Living through a pandemic has created a situation where many people have realized how fleeting life is and subsequently how their job was not fulfilling a higher altruistic need. Many employees quickly realized that their personal lives had been overcome by their professional responsibilities.
It’s not About the Pay
The Great Resignation isn’t mainly about pay. A report found they were quitting for more altruistic reasons. What were employees complaining about at companies that were losing the most workers during the current tsunami of resignations? It wasn’t mainly pay. “Much of the media discussion about the Great Resignation has focused on employee dissatisfaction with wages. How frequently and positively employees mentioned compensation, however, ranks 16th among all topics in terms of predicting employee turnover.”
The real reason most people are changing careers is for the following reasons:
- Toxic culture.“A toxic corporate culture is by far the strongest predictor of industry-adjusted attrition and is 10 times more important than compensation in predicting turnover,” report the authors.
- Job insecurity and reorganization.It’s probably no shock that feeling like you could lose your job at any moment makes you start thinking about getting another job. Research indicates that employees’ negative assessments of their company’s future is a strong predictor of attrition
- Failure to recognize performance. “Employees are more likely to leave companies that fail to distinguish between high performers and laggards when it comes to recognition and rewards,” write the authors. This isn’t about compensation. It’s about feeling seen and valued when you do excellent work.
Understanding how employees are feeling about their work is vital to keeping the quit rate under control. It’s important to have channels open that give managers information about your people. Employers should ask themselves the following questions so they can mitigate losing employees during the Great Resignation:
- How well do you know what employees think and feel about your organization as a workplace? What do they appreciate? What do they find challenging?
- If you have systems in place to gauge this, how do you know that employees feel safe to share?
- How do you create psychological safety in teams so that people can be open and honest?
- What opportunities do your senior leaders get to hear from individual contributors — who often hold valuable information about the customer experience, and who have plenty of ideas about how things could be better?
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