It is a personnel challenge that has caught economists and senior executives around the globe completely flat-footed. Why have so many people during the pandemic simply said, “that’s it, I am out of here,” when it comes to their jobs and, in many cases, their careers?
Research from McKinsey & Company shows that more than 19 million workers in the U.S. alone have quit their jobs since April 2021, something the firm described as a record pace that is disrupting businesses everywhere.
Companies are struggling to address the problem, and many will continue to struggle for one simple reason: they don’t really understand why their employees are leaving in the first place.
This is not just a U.S. crisis, economies in Canada, Australia, Singapore, and the U.K. are seeing a similar trend. “If the past 18 months have taught us anything, it’s that employees crave investment in the human aspects of work,” McKinsey notes. “They want a renewed and revised sense of purpose in their work.”
Pay, vacation, insurance, and other benefits are important, but now more than ever, people want to feel that their contributions are valued by the organization and by their managers. As McKinsey notes “The bottom line: The Great Attrition (Resignation) is happening; it’s widespread and likely to persist—if not accelerate—and many companies don’t understand what’s really going on, despite their best efforts.”
A FINANCIAL SAFETY NET
While substantial numbers of people saw their finances negatively impacted during the pandemic, we have also seen a steep rise in both the rate—and the amount—others are saving. Recent data released by Statista revealed that the personal saving rate in the U.S. at the end of 2020 amounted to 13.7%, with more than $2.3 trillion saved by individuals. And for many, this financial safety net has put them in a position to walk away from a job that doesn’t align with their values.
WHOSE ISSUE IS THIS?
An overwhelming percent of the US Federal revenue comes from individual income tax and payroll taxes, and the ‘great workquake’ could further accelerate inflation. With higher inflation percolating, savings will be consumed faster, and I do believe people will return to work, but they will be much more selective about the job they take and the organizations they join.
Money does matter. However, employees will be looking not just for an equitable paycheck, but for a sense of belonging, increased autonomy, and the feeling they are contributing to something meaningful. This, in turn, will force organizations to re-evaluate a growing number of what was considered “business as usual” for hiring and retention practices. Instead, organizations will need to:
- Build a culture of solidarity by facilitating purpose-based interest groups within the company
- Encourage gestures of kindness and support
- Model vulnerability to make it safe for others
These three bullet points alone are proof that the Great Resignation is far more than a Human Resources issue, it percolates across the entire organization and at all levels.
One group that was disproportionately impacted by the pandemic was women, with research showing that one in four women were thinking about reducing or leaving paid work due to the pandemic, citing company inflexibility, caring responsibilities, and stress.
Rather than accepting this—and seeing the rate of women’s participation in the labour force further decline—companies need to embrace the challenge and develop a work environment that can provide the flexibility, work-leisure balance, and career paths that this often under-considered talent pool is looking for.
This means re-imagining and reinventing how we think about pay, compensation, employment structures, location, vacation. In fact, it means reinventing work.
ELIMINATE DEPARTMENTAL SWIM LANES
But it is not all about the tangible.
In the new digital economy, freedom and flexibility are key to helping employees avoid frustration, complacency, or burn out.
But it also means evolving how work is distributed among employees, which will mean eliminating “departmental swim lanes.” For example, if an employee in Marketing has a specific skillset that fits the goals of a project in the Customer Success organization, you should have the flexibility to bring that employee into the project, potentially on a part-time or short-term basis. This is what I like to think of as corporate crowdsourcing of work, ideas, and innovation from within the organization, and it’s something that requires both structural and cultural changes in most companies.
If the work is interesting, the work is challenging, and flexibility is a key piece of corporate culture, employees won’t leave, and new talent will come.
Instead, they will flourish as organizations evolve into their own unique, free-living, and buzzing galaxies.
Kristina Lengyel is the executive vice president of customer solutions at OpenText. Follow her on LinkedIn.