You might have heard about it: It’s called “The Great Resignation”.
“With a record number of open positions, people feel more comfortable quitting their jobs”…Mark M. Zandi, Chief Economist of Moody’s Analytics.
The great resignation, the great reshuffling, the great discontent — take your pick; is upon us. We are at a point where the overall demand for talent currently exceeds supply. And when this happens, as we (some of us) learnt from macroeconomics, prices go up. In all of this, companies must embrace the current reality that power has shifted from organisations to the labour market and the sooner, the better. If you are a recruiter in an organisation, a human resource executive, a managing director or senior executive responsible for people, do not fail to see that the employees who are leaving their jobs are doing this simply because they will be better off, they have gotten a better job, or they understand that they can get a better job.
In trying to explain the current reality or make any sense of it, I came up with a couple of questions, some of which have obvious answers. Can it be that the “great emigration” has led to a lot of open roles which have to be filled? Can it be that some employees woke up and told themselves that they don’t have to deal with the horrible bosses who riddle our organisations (you never had to put up with them in the first place)?
A Gallup poll showed that over fifty per cent of employees resigned in order to leave their managers, and in turn, improve their lives. Can it be that the pandemic was a reset button of sorts, and the slowing down of the world forced everyone to have time to rethink and reflect; to see opportunities or career options that never existed? Can it be that we had more time to upskill ourselves and become more competent because of trading commute time for learning time? Can it be that the working population has become largely Marxian and has decided to take on the “big corporate” by throwing away the primordial corporate values which stress longevity and loyalty to a brand (whatever that means)? Can the mass exit and reshuffling be attributed to the easier processes of recruitment, application (think easy apply on LinkedIn) and [virtual] interviews? Can it also be that this has always been our reality and all that has changed is the scale or better still, reportage? If you are in the banking sector like me, bankers (in Nigeria, at least) have largely been professional call-girls, quickly moving to take the next grade(s) somewhere else.
Enough questions, if you want a new/nicer job, you can easily find one. It is easy to find another job that pays a little bit or even outrageously more, in some cases. This is also facilitated what I like to call the “globalisation or internationalisation of talent”. Historic barriers to work have been broken with the rise of remote work and global sourcing for talent and flexible immigration options for professionals. To have a fair grasp of why people leave organisations, we just need to humanize the process by asking ourselves “Why do people leave other people?”. They leave because of the way they are treated.
The American billionaire entrepreneur, Mark Cuban underlined this by stating that treating employees poorly, is unforgivable and that is why people leave. How you treat your employees influences why employees choose to stick to certain employers. If the experience is unpleasant, the plethora of options currently available just makes it easier to leave. This is also the reason why some employee referral programs fail, and others succeed. Employees are naturally more comfortable recommending some employers to people within their network. Again, the thought process is simple, if I do not feel valued, I will not recommend your business to a friend — even if you offer to pay me. The referral bonus is not worth the time I will spend explaining to a friend why I convinced them to take on a crappy job. It is unforgivable!
If you want to slightly improve your odds of retaining your best employees, get your pay and bonus systems in order. And please, this isn’t armchair philosophy. A study published in Harvard Business Review found that when employees believe promotions are managed effectively, turnover rates are half that of their competitors in the same industry. The picture gets prettier; innovation, productivity and growth metrics even outperform the competition. And to crown it all, stock returns are almost three times the market average, for publicly listed companies. Promoting the right employees is important, as this shows that as an organisation, you reward potential and performance. Also, note that money is important — until it isn’t. This is because you cannot always buy great employees, however, you can always earn them. It almost sounds like I am asking for a raise/promotion.
Before now, it was not unusual to spend a career growing within one organisation, espousing the value called loyalty. However, promotions are now one of the most powerful loyalty builders and retention measures. In the war for talent, the best offence is a good defence. Instead of worrying about getting new guys, reward the internal employees first. This does not mean that your rising retention rates which are like a Dogecoin bull run, will dramatically drop. However, you can buy the dip by utilizing this strategy. A lot of organisations say this in theory, but it is usually all noise, in practice, understandably due to flawed decision-making processes built by bureaucracy. This might also stem from poor internal employee development practices, but that is not the purpose of this piece.
You can point out the fact that people still leave even when you spend literal millions on promotions, employee development and support initiatives. Please remember that if you do not promote them, your competitors will and with the collapsing of industry-specific skills due to digitalization (not digitization), employee poaching has gone inter-sectorial. The competition either through LinkedIn or word of mouth (mostly LinkedIn), has a somewhat mystical way of catching the scent of your forgotten, resentful and unpromoted employees who are waiting for a Luke 18:38 moment (recall the blind beggar shouting “Jesus, Son of David, have mercy on me!”). What usually follows is a somewhat rat-like running to provide dying minute, overdue, matching or better offer which is usually too late. Like Ross Seychell, the Chief People Officer at Personio said, “I’m hearing it a lot: ‘I’m going to go somewhere I’m valued”.
If you do not care about longer employee retention, lower attrition and hiring costs, and an energized workforce, please do not pay any attention to anything I have mentioned. You can even try any of these strategies and your attrition numbers might not significantly change; this is simply because it is largely out of your control and the stoic way states that you should only focus on what you can control. Hence, organisations need to focus on what they can control. Focus on your internal processes and systems, ask questions like “What is our employee experience like?”, “How can we make our systems and process easier for new hires to catch on and ensure business continuity?”.
I spoke to the CEO of a Nigerian based information security firm, and he mentioned that organisations can focus on building systems and creating processes that have shallow learning curves to make it easier for new hires to come up to speed especially for urgent hires who have to hit the ground running in response to the massive exits plaguing most sectors.
I have also heard people groan at the idea of returning to the office and the seeming reluctance of primordial business executives to accept the new ways of working and how this might have an impact on choosing to stay or leave an organisation. I shared this view until I had an interesting conversation with the head of corporate transformation at my organisation. He highlighted the difficulty of accepting change by people. I double as a change manager, so this makes a lot of sense to me. These senior executives have spent their whole lives in the physical office model. They thrived and succeeded in systems that were built on showing up and presenteeism, which if you have done your homework, has its benefits. While some of the global corporates were quick to act “progressive” and publicly declare indefinite work from home arrangements for their employees like the dude who is overly excited and yells “drinks on me” in a bar, some of these companies have begun to toy with the idea of bringing employees back. Notable mentions include Netflix and Goldman Sachs. I can also try to make the case for having the workplace and the place of residence as two separate entities, but that is not the purpose of this article.
If I tried to offer reasons why employees are switching jobs, it might be too bold or lazy, as this varies from person to person and preferences change. Personally, I loved working remotely at first, but now I hate it primarily because I now see the importance of “disconnecting” from work and turning off. You can say set work times while at home but some of us do not score high on self-discipline.
As an organisation, do not try to assume why employees are leaving, instead leverage on the power of robust exit interviews. However, with varied reasons and needs for every employee just like their fingerprints, it might be nearly impossible to come up with a “one size fits all” plan. There might be some intersection, and therefore you must always understand that there are things beyond your control. Chief amongst these items are social media, LinkedIn and the share button, which are both friend and foe to organisations, it just depends on where you stand on both sides of the poaching fence.
In an interview in May, a financial executive mentioned his worry about talent loss, “people always leave, and we tend to lose the best people first”. For organisations, it helps to ask, “Who is my at-risk talent?”, “How do we replace these employees if their skill and know-how goes out the door to the neighbours?” These high-value employees are usually impatient to receive their due. This feeling is worse when the organisation is growing, and they cannot match their personal growth with the organisation. Even when they can, they might expect even more. It also helps to ask, “How can we build our hiring pipeline and fine-tune our recruiting workflows”. Now I will not mention any suggestions here as the answers to these questions will vary from one organisation to the other.
Finally, we also have another class of people in this mix — the employees who did not leave/have not left. And I think they are the more interesting class because they have to take more responsibilities while listening to politician-like promises of “We’ll hire more hands!” and I don’t think any organisation has the magic wand to recruitment and employee onboarding. They will also deal with the issue of handing back responsibility that has been accepted and if you have ever been in those shoes, you will understand what I mean — it can be impossible. This in turn leads to burnout and resentment, which in turn leads to the desire for an escape, spending extra hours on LinkedIn and the cycle, as they say, repeats itself. Maybe I am overly pessimistic, but then, what do I know? We might have a Deus ex Machina moment and the expected will happen, who knows?
A modified version of this piece was published in the Wema Economic Quarterly review, Q4 2021. To access the publication, please click here.