Companies’ most frequent response to “The Great Resignation” is to raise pay. In fact, average increases rose from 2.6% to 3% during 2021 and are scheduled to raise to 4% during 2022. Let’s consult other data though, to better understand why all of this cash is having so little impact on the number of employees who are quitting their jobs.
MIT researchers shared a new study that presents a different perspective regarding why employees are quitting their jobs in droves, and the number one reason is “toxic corporate culture”. “Toxic corporate culture” is comprised of three distinct categories and the MIT research tells us “toxic corporate culture” is…wait for it…10 times more important than compensation in predicting turnover.
We are now firmly in the midst of “The Great Resignation”, and the number of monthly quits have consistently exceeded their all-time highs. This gloomy picture would be incomplete, though, without looking beyond today, wondering how long the workforce clouds will stay dark. There are at least 10 reasons that forecast "The Great Resignation" as the new normal.
The first week of January our C-Suite Analytics team reviews how much we helped our clients the previous year. We are tough on ourselves; did we miss an idea along the way? But we also identify our successes with specific obstacles and the solutions that did work to overcome them.
Each of you knows that nothing happens in organizations without accountability…nothing…yet my guess is fewer than 5% of global companies, large and small, actually hold someone accountable for turnover. This is why we always begin with converting turnover to dollars. It’s the turnover accountability wake-up call.
During a recent client discussion, I mentioned my belief that what matters most regarding employee retention and engagement is what employees talk about over dinner. That the feelings we tell ourselves on our way home from work plus any subsequent conversations we have soon after ultimately predicts how long we will stay and how committed we are to our day-to-day work.
I kept searching for clues as to how a poverty-stricken person views work, clinging to the naïve notion that work = money = getting out of poverty, so therefore one would give all to their job as the ticket out. Then I read more about poverty and the big lesson for me is that a poverty-stricken person’s reality is worse than I thought, with a lack of support systems and knowledge of hidden rules.
Last month the Wall Street Journal reported the results of a survey conducted with a large group of economists. Of the 52 economists surveyed, 22 predicted that workforce participation would never return to its pre-pandemic levels. So the challenge of recruiting and retaining in 2019 was cake compared to what’s ahead in 2022, 2023, 2024, and 2025.
With much data circulating about “The Great Resignation”, you may think it’s hard to separate which information really matters. Recently, our Bureau of Labor Statistics, or BLS, reported quits rate by state and the complete report reveals two Americas...and this data matters.
The data doesn’t tell us why people quit, just that they quit. Making this worse, the labor market is still down five million jobs since before the pandemic.