In August, 4.3 million workers quit their jobs – a record-breaking number fueled by COVID’s uncertainty. It’d be fair to assume that fall’s increased retail needs would push that number down. Not by much. In October, 4.2 million workers quit, keeping what we now know as “The Great Resignation” steady and thriving.
Coined by Texas A&M Professor Anthony Klotz, The Great Resignation was simply a buzzword in early 2021. Now it’s a real, significant event. And those driving it are mid-career employees in their 30s and early 40s – or, the largest chunk of the workforce.
Millennials – currently the largest generation in the workforce – and late Gen X-ers are quitting for a variety of reasons. Now that the power has shifted from employer to employee, workers have more leverage. Workers are also burnt out from having to go about their day, ignoring a pandemic. They also have taken a closer look at what’s most important, with parents driving a decent percentage of resignations. There are even more reasons behind the workplace revolution and they all tie into how employers manage their employees.
Living and working in a pandemic has exhausted the workforce and workers receiving less-than-fair treatment at their jobs are making a change for the better. Those organizations that have well-established cultures, competitive compensation and engaging opportunities will not only retain talent but have their pick of top talent when it comes time to hire.
For those currently facing high turnover, there are ways to Great Resignation-proof an organization. The first step is putting the employees first.
Don’t skimp on compensation
If an organization offers salaries below the industry average, employees will eventually figure it out and leave for a company that pays fair. The same goes with PTO, health insurance, flexibility, professional growth, generous parental leave and so on. Now employers must put the same amount of effort into their employees that their employees give to them. And that effort is a lot.
Employees are more productive than ever and they’re not being recognized for it. If the federal minimum wage had grown with nationwide productivity, the United States’ minimum wage would not be $7.25 an hour – it would be $26 an hour.
This statistic rarely comes to mind when determining employee compensation. According to the Bureau of Labor and Statistics, “the median weekly earnings of the nation’s 115.3 million full-time wage and salary workers were $1,001 in the third quarter of 2021,” which amounts to $48,048 a year. For states like New York, Hawaii and California, the median salary is barely enough to cover the minimum amount a person needs to live independently in those states.
In Payscale’s Fair Pay Impact Report, 51 percent of employees surveyed believe they are underpaid. Only 28 percent of the respondents said they are being paid fairly. Those employees that believe they are underpaid are doing something about it, as they are 49.7 percent more likely to seek out an opportunity with better compensation.
Cutting corners looks attractive on paper but it will cost an organization in the long run.
Understand what employees want
A recent Harvard study involving 302 managers found leaders think they know what employees want but what leaders think isn’t what employees want. And what employees want is simple. They want to feel satisfied and energized with their job and have a commitment to a culture that aligns with their goals and views.
In the same study, Harvard also surveyed 395 employees to gauge the engagement temperature in 2021 and found three things:
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- Leaders must connect employees with work they care about.
- Eighty-six percent of employees said they would prefer to work for a company that prioritizes outcomes over output.
- Leaders must reduce stress through flexibility, autonomy and trust.
- Eighty-eight percent of workers say that when searching for a new position, they will look for one that offers complete flexibility in their hours and location.
- Leaders must respect their employees’ time and consider it as much a reward as financial incentives.
- American workers are desperate for time off. On average, Americans take 10 days off work and 26 percent have never taken two weeks off straight. Compare that with countries like Algeria, Finland and France, that offer their citizens 25-30 federally mandated days.
The simplest place to start is for managers to have regular check-ins with employees. Constructive feedback and coaching on how to apply it can transform the work experience for employees.
“We found that leaders in a supportive environment for feedback had much better performance improvement over time than those in the unsupportive feedback environment,” said Lisa Steelman PhD, a professor of I/O psychology at the Florida Institute of Technology. “This shows that feedback does not happen in a vacuum, and we need to set the stage by creating a growth-oriented environment.”
Managers need to be aware of their employees’ job satisfaction, goals, interests and overall place in the organization. The better managers know their subordinates, the more personalized opportunities they can offer. And as younger generations age into the workforce, organizations will have to adapt to their wants and needs. Currently, Gen Z is pushing the need for direct and frequent communication, clarity on expectations and regular check-ins with their supervisors.
Focus on employee development
Humans are not machines – we don’t come with a general instruction manual. And that’s what has made the workplace complicated. There’s a reason the “cogs in a machine” cliche exists: because our workers are often viewed as disposable. Until a pandemic upended everything.
Now, we are in a seller’s market. The current unemployment rate is a low 3.5 percent, yet the United States is missing four million workers and counting. To prevent their employees from hopping on board the trend, employers are scrambling to figure out how to retain their talent.
Not only is compensation an important part of keeping employees happy at work, professional development is also necessary. People naturally want to be challenged and engaged in their work, however, employers are struggling to meet their needs.
This is where knowing their employee comes into play. Every person has different strengths, weaknesses and working styles, so it would be a failure to hold every worker to the same standard or have them focus on projects that don’t cater to their strengths.
A common talent-management tool that addresses employee diversity is the nine-box methodology, which divides employees into nine groups based on their current performance and potential for growth. The methodology is a simple way to identify highly driven employees and pinpoint key development areas.
Managers first assess performance, followed by potential. When these two areas are analyzed, opportunities for success are more visible. Managers now have the information they need to delegate and communicate successfully. Likewise, the nine-box methodology helps get to the root of why employees score low on performance and potential.
With success and problem areas pinpointed, it is easier for organizational leaders to structure the work experience to an employee’s strengths and preferred working style. The result is a happier, more confident employee, improved performance and increased engagement.