Winning in the Great Resignation

Photo by Leon Seibert on Unsplash

We are living through the Great Resignation, the largest voluntary job exodus in our economic history. According to the U.S. Bureau of labor statistics, the month of August 2021 saw 2.9% of the United States workforce quitting their jobs. This on top of previous record-breaking months.
 
It’s not that the economy had a spasm and got all of this out of its system. The Great Resignation continues. Microsoft recently conducted a poll of 30,000 workers and found that 41% are considering quitting, including 54% among Gen Z. Percio’s study shows 38% plan to leave in the next 6 months. Maybe it is self-fulfilling, but Monster found 95% of workers are currently considering changing jobs. 
 
Think of it this way. Overnight, you sent your employees home, told them to try to work outside the office and that you would decide their fate down the road. While working from home, they figured out how to balance their job with their kids’ education. It was hard and stressful, but they got confident in their ability to do their work. They were away from your reinforcement of the benefits of affiliation. And they began to reflect on the work they do, on who they work with and who they work for. This is what Texas A&M psychologist Anthony Klotz calls “pandemic epiphanies.”

What they collectively discovered has upended the relationship between employees and employers. To use a sports analogy, COVID ushered in the era of free agency.
 
In the NBA, NFL or MLB there are generally two reasons why a player moves from one team to another. The dominant reason is pay. But for some superstars who figure their grandchildren’s lives are already assured of comfort, the chance to win takes over.
 
For the rest of us, the reasons to consider a move are more diverse. I believe that some of the usual offered suspects (fear of an unsafe work environment, unemployment benefits that incentivize staying out of the workforce) explain only a small portion of what is going on what is going on, and mainly at the low end of the pay scale. Unlike major league sports, the motivation is less about wanting something new than it is against what they have. Your engagement scores are voting with their feet. Harvard Economist Lawrence Katz said, “I think we’ve really met a once-in-a generation ‘take this job and shove it’ moment.”
 
Employers are scrambling to respond to the Great Resignation. The actions they are taking are unlikely to have a sustainable effect. If you are trying to retain high risk employees by raising salaries, increasing PTO, or offering equity, you are only renting these employees. You are changing the employment value equation by offering the equivalent of a retention bonus without dealing with the underlying problems.

What are those underlying problems?

How Executive springboard is different

Why they are leaving (Part 1)
The number one reason why people quit their jobs is because they don’t like working for their boss. That hasn’t changed during the pandemic. If you’re the boss and you want to understand what’s wrong, start by looking in the mirror. Did it occur to you that your people’s reluctance to go back to the office is because YOU are in the office?
Just maybe they are tired of the bullshit that you impose, which gets in the way of them doing work that they can be proud of. The single most important reason why people leave their jobs is to get away from their boss.
 
Remote work gave them a reprieve from being micromanaged, and the distrust it implies. Going back to the office means a return to the bad old days.
 
Time away from the office has weakened the connections that people have with your organization. Without the daily reinforcements, it might be less obvious why they enjoy working for you.
 
Why they are leaving (Part 2)
As they have reflected on what’s important to them, they are less impressed with a company that defines itself by delivering a profit. If their friends were let go, if they hear considerations of lower pay for hybrid or remote work, you are teaching your employees to do the math.
 
People quit because their work is not fulfilling, they don’t find your mission compelling or there are fundamental conflicts with what you do and their own values. I have a friend who quit her job at 3M after 20 years. It’s an oversimplification to point to a single reason, but I know sustainability is very important to her. After the company paid out $850M to the state of Minnesota for Scotchgard ingredients contaminating ground water a few miles from her home, she told me, “I woke up one morning and realized I worked for a chemical company.”
 
Why they are leaving (Part 2.1)
Karl Marx came up with a corollary of this over 150 years ago… Employees leave because their contribution is disconnected from results that matter to them. Assume they buy into your mission. Do they see the significance of their work? Do they get recognition that what they do has value? Do they have an opportunity to get better at what they do, so their impact can be greater?
 
Why they are leaving (Part 3)
There are additional demographic and economic factors. Boomers are aging out of the job market. This was happening at a rate of almost 10,000 workers per day before COVID. The pandemic has been a catalyst to accelerate the process of Boomer retirements. The accumulation of wealth has allowed people to quit. This works in two ways. At the older end of the labor force, IRAs are fat enough for retirement to become possible. For younger workers, savings have increased to a point where income is not essential, at least for now. 

There is not much an employer can do about the inevitable retirement of Boomers. But others who have quit because they can probably don't have money for the long run. Studies show they have a 6-9 month comfort cushion, long enough to leave their current company without a new job and feel like they can find a new position that checks the boxes for them. 
 
What can you as a leader in your organization do about all of this? Let’s start with what NOT to do, and I recognize there may be very good reasons to disregard my recommendation.
 
Don't mandate a 100% return to the office, unless you are willing to lose a lot of your workers. We are all impatient to get people back together. We may view a return to full-time in the office as a habit to be relearned, painful for some for 6-8 weeks before they get over it. But, as work-from-home was an enormous social experiment that led to pandemic epiphanies, that 6-8 week period of acclimating to the old normal will be the spark for those considering a move to act.

Don’t make jump-step increases in compensation to retain people. You are only renting them, buying their retention temporarily without addressing loyalty. You are potentially creating pay equity problems with employees who don’t threaten to leave. And you are creating a cost that will either be hard to recoup or, if repeated across the economy, will become inflationary.
 
Don’t expect a foosball game in the break room or free breakfasts to excite your employees. They are past that. Young associates are smart enough to recognize that these goodies can't replace leaders who show they care about them and their careers.

Having provided some "don'ts," here are some "do's:"

Executive Springboard process

Most importantly, listen to your people. What do they want? What is important to them? How do you have to improve? What are their concerns? Their hopes and dreams? Conduct a series of one-on-one interviews. Let them do the talking. Take in their feedback without judgement. Reflect on it. Act on their feedback where you can. And let them know how their input led to steps you are going to take. At the very least, they will feel heard and valued. It's likely they will feel a sense of agency and influence. If your people see a return on their investment, they are more engaged and more likely to stay.

Take steps to develop the management team. Development gives people the tools to do their job better and to provide a greater sense of self-worth. They recognize that this investment makes them more marketable outside of your company, but your willingness to place a bet on them encourages their retention. Unlike increasing compensation, leadership development returns a benefit to the company. Better managers mean happier workers and fewer resignations. Better managers means better results in the marketplace.

Connect employees to your mission, vision and values. I worked with a leadership team last year that was struggling to identify their competitive advantage. As an artisanal bakery with manufacturing in Florida, they could not compete outside of their region because of freight disadvantages. Our discussion turned to what they believed in, what causes they could support or what they could stand for. The VP of Marketing came up with causes the organization could rally behind: sustainability, food insecurity, financial literacy. All could have underpinned differentiation in the marketplace and a significant cultural initiative. But the CEO was unable to see the business beyond its ability to provide a return for his European owners. These potential foundations for a mission were relegated to an underfunded "cause marketing" initiative. Workers took pride in local efforts with a local food bank, but a bigger opportunity for relevance with customers, community and employees has yet to be realized.
 
If you want to get everybody to work together in the office full-time, consider going hybrid first. Get people used to working with colleagues face-to-face again. When they recognize the benefits of collaboration, relationship building and a sense of community, they may be more open to the being full-time eventually.When you turn on the spigot instead of flipping the switch, you might find that your best work solution is something less than "all in." Perhaps you are best served by a four-day work week. 

If you choose a hybrid model, don’t put 10 pounds of employees in a 5-pound bag. If you require everybody in the office Tuesday through Thursday, you might end up with people on top of each other, returning them to an open office that feels uncomfortable. Instead, stagger the interaction. Team A may be expected in the office Monday and Tuesday, Team B Tuesday and Wednesday, Team C Wednesday and Thursday. Ad hoc meetings between A and C can be on Monday or Friday. 

Rather than providing a bump in salary or equity, you can offer employees benefits strategically and judiciously. Maybe addressing their child care concerns is critical. Perhaps people who were hired to work remotely need relocation help as the office reopens. To make this work, you have to have done the initial work of listening to your people and understanding their needs.

The Great Resignation poses a threat to many businesses. Yet, a few actions can mitigate the risk of employee flight and create an opportunity to make your company an attractive destination for A players from other organizations.