Low pay has been singled out as the big reason why workers have been quitting as part of the Great Resignation, but the reality is more complex.
After a comprehensive study of 34 million online employee profiles, the MIT Sloan Management Review this year found a “toxic work culture” was by far the biggest reason workers were resigning. Job insecurity and a failure by employers to recognize performance also ranked highly.
My university’s own study of 5,000 American workers found that one of every three would leave their jobs tomorrow, without another one waiting in the wings, to escape a workplace that didn’t align with their values, or that did not offer opportunity for skills development.
The good news is that employers have multiple tools and practices to boost their retention and hiring beyond just dangling higher salaries. The challenging part is that this requires an investment of time and resources into new approaches and cultural change that may take a while to pay off.
It seems workers have spoken with their feet. I think it’s time for employers to listen.
As the COO of one of my state’s biggest employers, I feel we avoided the worst of the Great Resignation by focusing on three core areas—building social capital, investing in mentorships and taking a systematic approach to career development.
1. Social capital means helping employees build their professional networks and ensuring that those networks are active in supporting them. Many professional relationships these days are too transactional, which is one big factor contributing to the sense of toxicity in the workplace.
Managers should see it as part of their jobs to form meaningful relationships with their team members, making the effort to genuinely understand their backgrounds, motivations, and ambitions. For their part, organizations should give managers and employees the time and support they need to form deeper bonds. These kinds of relationships need time to take root, but our experience is that it leads to higher engagement and less attrition.
2. Implementing strong mentorship practices is an indispensible branch of social-capital building. Most managers and employees would agree that mentor relationships are important, but too often they are done in a casual, ad-hoc way that lacks a clear direction and which can therefore lead to frustration on both sides.
Mentorships are most effective when both sides go into the relationship with clearly defined expectations and specific goals that are updated every few months.
The toughest part tends to be managing expectations so that the agreed goals are achievable and meaningful. An employee making $30,000 a year, for example, may want to set a goal of earning $100,000, but that’s the kind of ambitious target that is better broken up into bite-sized steps of acquired skills and responsibilities that can be achieved more realistically over a shorter period.
Done right, mentorships can help companies build a powerful sense of community that binds people together, gives them a sense of purpose and trust, and which ultimately results in higher retention and better overall performance.
3. The last key practice is to assess employees’ capabilities and guide their career path in a highly specific, objective way. The traditional year-end performance review falls short in this regard because it tends to be a one-way street and can be highly subjective depending on the manager who’s carrying it out.
Today’s machine learning and data tools allow employers to take a lot of the subjectivity out of assessing employees’ abilities and performance, for example, by keeping track of their training, achievements, and interactions with colleagues.
Technology also makes it easier to compare capabilities and performance across organizations.
With this objective data in hand, managers can move on to hold a well-grounded conversation around what are the right next steps for an individual and how to build on their capabilities.
All three of these practices share a theme—they deepen the employer-employee relationship beyond dollars and cents in a way that benefits the whole.
As highlighted by the MIT Sloan study and our own university study, the vast majority of people value culture and meaning over their next paycheck. They understand that getting a few extra dollars now is not as worthwhile as having a workplace that is committed to helping them develop and acquire the skills to earn much more in the long term.