The “Great Resignation” has companies taking an introspective look at what is causing employees to quit and find other opportunities
Poor communication and overtaxed management are major factors in why many people are leaving their current jobs
Improving both communication and organizational transparency will align the organization, promote employee retention, and increase value growth
Amid millions of people leaving their jobs in what has been coined “The Great Resignation,” it’s necessary for companies to look deeper at what exactly is causing this mass exodus. With the turbulence in the workforce stemming from COVID, a whole new outlook on what employees want in their career has formed and many leaders are lagging behind in understanding this outlook.
With the increasing transparency and accessibility to the inner workings of companies around the world, workers are beginning to see what they might feel are greener pastures. They may hear about better work environments, companies that allow remote work, or even companies that publicly advocate for bilateral communication, transparency, and employee well-being.
But is this why they are leaving?
The Great Resignation
To get a better idea of the actual numbers, 4.3 million (2.9%) of the U.S. workforce quit their jobs in August of 2021, increased from the 3.9 million (1.6%) in April (see graphic below). This has been the highest number in at least the last 20 years and has been steadily increasing as COVID restrictions have receded.
Some evidence to why this quit rate has increased can be found in the PwC US Pulse Survey, where employees ranked pay, benefits, career advancement, and flexibility as the top four reasons they’re looking for a new job.
Other evidence, however, shows that poor management and communication can have just as large of an impact in causing employee turnover. One executive provided an example of a company that hired a technical employee during COVID. Because of quarantine, there was no human bonding and the employee shortly thereafter accepted another opportunity, citing no emotional connectivity as the reason for leaving.
Communication is Key
Communication is important at every level of business, but first and foremost ensuring that the mid-level managers are fully communicating objectives and aligning their teams to the strategy of the business. This is crucial to ensuring they execute associated initiatives as part of their daily work, regardless of environment. It demonstrates effective leadership, engages, and empowers teams and individuals to be part of the solution.
Research by the Predictive Index shows that 63% of employees looking to leave their company in the next year currently have “bad managers.” The same study also uncovers that communication is the number one skill that they feel their managers lack, which wasn’t even in the top five in the previous 2019 poll. The numbers show a disconnect between employees and their managers, but does that necessarily mean that they are “bad managers?” Or are there external factors that are widening the disconnect, e.g. the disruption in the workforce as a result of COVID?
In order to fix this potential disconnect, increasing transparency in the organization can be beneficial.
The Transparency Tango
Transparency can be a tough line to walk—how do you stay open enough to gain employee trust and respect, but protect from the risk of information falling into the wrong hands?
John Mackey, CEO of Whole Foods, mentions in his book Conscious Capitalism that it’s important to practice discretion in transparency (not releasing potentially harming financial information, for example), but a company that plays its cards too close to the chest only promotes fear in the organization.
To relate what Mackey wrote to this time of COVID disruption, increasing transparency allows all employees to see what the current company struggles are, why they are struggles, and what each individual can do to help the company overcome adversity. Improving the relationship and trust with each individual employee can help align everyone, even if they all don’t reap immediate benefits.
The steadily increasing “Great Resignation” can be attributed to a host of factors ranging from wages to the COVID disruption, but ultimately stems from the disconnect in communication and lack of transparency between senior decision makers and their employees. For companies that want to retain employees and continue to grow their business, it’s imperative that they take an introspective look at where the disconnect is happening and what can be done to boost trust and loyalty through increased transparency.
About Pivotal Innovation
Learn more about how Pivotal Innovation can help you improve communication, transparency, and employee retention with the use of our unparalleled Pivotal Innovator™ value-growth SaaS platform combined with acceleration support services. Schedule a meeting with us at https://calendly.com/kevin-fallon/15min to learn more.