This article initially appeared in Forbes.
Three Lessons For Thriving During The Great Resignation
Andrew Weinberg Forbes Contributor
I write about family-owned businesses, private equity and telecom.
Resignation. businessmen holding boxes for personal belongings and resignation letters. Quitting a GETTY
As if companies didn’t have a hard enough time dealing with the impact of COVID-19 – from a shift to remote workplaces, to vaccination policies, to broken links in the supply chain – now comes the so-called “Great Resignation.” Organizations of all sizes, in every sector, face a monumental exodus of talent. The resulting impact on a company’s workforce and culture represents one of the most daunting challenges businesses have faced in decades.
Recent numbers from the Labor Department highlight the new reality. In the 6 months ending in September, nearly 15% of the U.S. workforce quit their jobs. Job openings stubbornly remain around 10 million (more than 6% of the workforce), more than 60% above their recent historic averages. Moreover, a recent McKinsey study not only confirmed these figures, but also noted that some 40% of employees across industries and countries are thinking of quitting in the next 6 months.
Source: U.S. Bureau of Labor Statistics, seasonally adjusted data BRIGHTSTAR CAPITAL PARTNERS
While some commentators believe the trend is predominantly found in certain industries that have been most disrupted by the pandemic, like hospitality and healthcare, I believe this perceived conventional wisdom leads to the wrong conclusions. Furthermore, while ‘fickle millennials’ may get the blame, a recent Harvard Business Review article found that mid-career employees, often key to an organization’s performance, show the highest resignation rates.
In my experience, the “Great Resignation” is a phenomenon that bridges sectors and employee groups, requiring organizations of all sizes to take an honest look at their cultures and how they treat their employees. At my firm, we work closely with enterprises that are led by families, founders and entrepreneurs, which coupled with objective research such as the aforementioned McKinsey study, has shaped a large part of my personal views on strengthening employee retention.
Find out what your employees want, not what you think they want
In a sample of nearly 6,000 workers and 250 employers that assessed 23 factors– employees were asked “which factors were important in your decision to leave your last job” and employers were asked “which factors do you think make employees leave their job.” Employees and employers agreed on the relative importance of some, like work-life balance, access to technology and workload. But there is a staggering discrepancy on some human factors, as the following chart shows, clearly indicating that while employees systematically emphasize the aspects of their jobs that focus on human interaction, far too many employers systematically think of their employees as transactional.
Source: McKinsey, ‘Great Attrition’ or ‘Great Attraction’?, September 2021 BRIGHTSTAR CAPITAL PARTNERS
Top Quartile of Factors with Largest Disagreement Between Employers and Employees
Fixing this disconnect relies on communication, as “feeling valued” is about more than the value of a paycheck. In order to meaningfully align with employees, company leaders need to try to genuinely understand them in the first place. Leaders and managers should engage with workers on an individual basis, asking questions before offering prescriptions, and recognizing that focusing on culture can’t be optional. Along these lines, employers must understand that each employee belongs to a mosaic of diverse groups, meaning that Diversity, Equity and Inclusion efforts are absolutely crucial. Rather than only superficially address DE&I, managers at all levels need to buy in and prove their commitment and understanding of these efforts every day.
Offer recognition, belonging and purpose, not just a job
This lesson follows directly from the research previously mentioned and is clearly borne out in what I see daily across our portfolio companies. Whether it’s organizing quarterly townhalls to give all employees an understanding of the current state of the company, acknowledging the contributions of an organization’s veterans on Veteran’s Day, or handwriting birthday or holiday cards to employees, the simple things matter. Employees who feel appreciated and purposeful will go the extra mile when required. This basic point often gets forgotten in the quest for quarterly numbers, especially in my industry, private equity. Yet it is crucial to remember that a motivated workforce at all levels will ultimately generate the customer service and business needed to reach organizational and financial goals.
Adopt a flexible operating model that aligns interests and needs for all
There is a battle raging about returning to the office. Strong-willed leaders demand their employees return. Many employees, sensing a shift in their bargaining power, resist. Some companies promise working from home, forever, for all.
I believe that in-person collaboration is critical to success in our industry, and it’s possible to work in an office environment while embracing employee needs. Our employees told us they enjoy the office camaraderie but worry about being in close quarters while COVID is still in circulation. So, in addition to adapting our offices to follow all requirements, we’ve covered the cost of COVID tests for all employees at our firm. And as certain regions see seasonal spikes in COVID cases, we support employees who want to work from a different office for a period of time. This allows them to feel safer and us to operate effectively in a deal-driven environment that requires short communication flows.
The context for our urban employees is different, for example, from that of the workforce of mobile truck mechanics at one of our portfolio companies, who work mostly outside and often alone. Pairing them up gives a sense of camaraderie and a more enjoyable workday.
“The point is, there is not a “one size fits all” solution. Organizations must recognize the realities facing their employees, adopt an operating model that fits and be ready to evolve it when circumstances change, as they inevitably will for both them and their employees.”
The ‘Great Resignation’, in my view, need not be scary. If it nudges both employers and employees to honestly share their needs, and design models that can accommodate both, it is a wonderful opportunity. The pandemic has been a terrible drain on our emotions and wellbeing, but it has also shown that we can be productive without dogmatically clinging to working habits shaped some 100 years ago.
Let’s grab the opportunity to create new models of working, with deeper understanding of what both employers and employees need from each other. We owe it to each other, given the time and importance of work – second only to our families and loved ones!