The Great Resignation along with its possible causes was one of the key topics of discussion at the Spring Policy Forum hosted recently by the Employee Benefit Research Institute (EBRI).
During the first session of the forum, several panelists addressed a topic of interest to many in the audience: What is Driving the Great Recession/Retirement—and What the Future Holds for the Labor Force.
Unprecedented Number of Workers Quit
The trend by an unprecedented number of workers to quit in recent years is often referred to as The Great Resignation. This is an ongoing economic trend in which employees have voluntarily resigned from their jobs en masse, beginning in early 2021. Possible causes include the pandemic, wage stagnation amid rising cost of living, long-lasting job dissatisfaction and the desire to work for companies with better remote-working policies.
One of these panelists was Ragan Decker, senior researcher, strategic researcher initiatives, SHRM. According to Decker, the SHRM Research Institute found that 30% of U.S. workers who quit their jobs in 2021 did not have a new job lined up when they quit.
The top five reasons employees gave for quitting are:
- Better compensation
- Better work/life balance
- Better benefits
- Lack of empathy by their organization’s leadership
- Workplace culture or politics
“In the first of two really interesting findings, we found that 21% of those who quit a job within the last nine months did so because their organization’s leadership lacked empathy toward employees,” Decker said. “It is one of the most important aspects of leadership. Empathy is about being able to put yourself in the shoes of the people you lead and making a real effort to understand how people are feeling at the core. This is just about treating employees like people.”
The other surprising reason employees quit is because of a negative workplace culture, she added. “This just highlights the importance of focusing on building a strong culture,” she said.
Attracting and Retaining Workers
Business leaders are taking various steps to combat this exodus of workers, Decker said. Many are offering higher starting salaries/wages than they did in the past. For example, as of Dec. 2021, 68% of employers reported that they offered higher starting salaries to their employees.
To reduce turnover and attract new employees, Decker added, organizations are also offering employees the opportunity to work remotely, others are offering new or additional merit increases, some are giving spot bonuses, and others are increasing their employee-referral bonuses. Twenty-five percent are providing training and career-development opportunities, and 22% are investing in team-building activities.
Employers are also using “stay interviews” to retain current workers, Decker added. “Stay interviews are conducted to help managers understand why employees stay and what might cause them to leave,” she explained. During an effective stay interview, a manager would ask standard and structured questions in a conversational manner. This is one way for companies to be proactive instead of reactive, and try to implement changes before an employee quits.
To attract and retain employees, employers can also:
- Hire “boomerang” employees–those employees who have returned to the jobs they left. Eighty-one percent of organizations said they are willing to re-hire employees who quit their jobs.
- Leverage untapped talent pools like recent college graduates, former employees who quit, and veterans.
To further enhance their retention strategies, employers can also foster a sense of belonging in the workplace. “When workers feel a strong sense of belonging, they are less likely to quit,” Decker said.
In addition, employers can train managers to interact better with their workers. According to the SHRM survey, over 2 in 5 workers who quit said they left because their managers were micromanaging them.
Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at amseka@INNfeedback.com.
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