You have surely read the articles, watched the videos and seen the posts. You might have even liked and shared some of them. By now, the news about what’s being referred to as “The Great Resignation” has reached all of us in the business sector, one way or another. The gist of it is rather simple: a record number of workers in the U.S. left their jobs throughout 2021.
The latest estimates from the United States Bureau of Labor Statistics put the total amount in the vicinity of 47 million people bidding farewell to their company and position over a period of 12 months. These results even topple the previous record held by 2019, when a little under 39 million people chose to leave their current occupations, with a monthly average of 3.5 million workers.
Needless to say, 2021 wasn’t an easy year for anyone. Even though the arrival of the Covid-19 vaccines gave us a much-anticipated shot of optimism, not everyone was ready to face a whole year of restrictions, the debates over the use of facemasks and the emergence of other variants. In spite of all the challenges, the most recent data from the International Monetary Fund presents a 5.9% annual economic growth worldwide.
A closer look at the salaries in the tech sector, according to Hired’s 2021 State of Tech Salaries report, also shows numbers in the blue, with an average 5% increase in compensation in 2021 over 2020. This was yet another piece of evidence debunking the myth that wage dissatisfaction is the reason behind the Great Resignation. Well, now it’s time to put that idea to bed once and for all and try to understand the implications of what I believe actually motivated the phenomenon: toxic corporate culture.
The Actual Reasons Employees Left
A recent MIT Sloan Management Review article shows that toxic culture was the biggest predictor of employee turnover, 10 times more important than problems with compensation. It also overshadowed by far the second item on the list (job insecurity and reorganization), which scored a mere 3.5. And by toxic culture, the authors of this study mean unethical behavior, employees feeling disrespected and failure to promote diversity, equity and inclusion in the workplace.
So, what exactly does that mean for us in the technology industry? Even though tech wasn’t by far the most affected area of the economy when it comes to the Great Resignation—that title belongs to the leisure and hospitality sector—we didn’t go by unscathed.
An analysis by Gartner indicates that a whopping 31% of IT employees were actively looking for new job opportunities all along the third quarter of 2021. Can you imagine having to replace almost one-third of your software engineers? That’s a lot, and if you ever had to scale up your development teams at a moment’s notice, you know how hard it is to find available talent nowadays.
A very traditional strategy to try and revert this kind of scenario is revisiting salaries and benefits. For instance, the founder of Deutsche Familienversicherung, a Frankfurt-based insurance company, is offering up to 1,500 euros for candidates who attend both the first and second job interviews and 5,000 euros for those who successfully complete a six-month probation period. That’s a considerable cash prize for just showing up.
I can’t help but wonder, though, if throwing money at the problem is really the most suitable approach to dealing with high attrition and poor retention.
Changing Employee Priorities
I cannot overstate the weight of the coronavirus pandemic to the changes in the working landscape as a whole. Not only has the disease itself motivated many of us to reexamine several aspects of our lives, but the almost two-year period spent in different degrees of isolation and working from home also showed us new possibilities we hadn’t necessarily faced yet.
Among the most evident results, there’s a considerable shift in workers’ priorities when it comes to wages and labor conditions. According to the KeyBank 2022 Financial Mobility Survey, 62% of respondents believe work-life balance to be more important than a high-paying salary. Spending time with family and friends is now noted as the number one priority, ahead of growing one’s finances and pursuing one’s passions outside of work.
So how does this relate to toxic culture as the number one reason for workers quitting their jobs? Well, it’s all about creating suitable work environments that take into account and accommodate the needs and preferences of your employees.
Grant Thornton’s State of Work in America survey found that 40% of workers don’t feel that their voices are being heard at work, while 34% believe that interacting with their manager is the most stressful part of the day. Coupled with the fact that 40% declare that they will look for another job if forced to go back to the office full-time, it becomes evident that the keys to improving job satisfaction and talent retention are communication, flexibility and inclusion.
Nothing is more disappointing than someone voicing their concerns to a manager, hearing a positive response and then seeing no changes. In other words, if your company has a policy of listening to its employees, actually listen to what they have to say and act on it however much you can. Discuss their concerns and demands with other managers and, if need be, take them to even higher management. Once your staff sees changes arising, they’ll feel their voices are heard.
Managers must also make time for one-on-one calls so the teams know where they’re standing, especially if they work fully remote or as part of a hybrid team. This makes it possible to foster a corporate culture where employees feel respected, work with flexibility while still maintaining productivity, and, most of all, don’t feel so disappointed that they start looking around for better opportunities at every stop.
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