Recent data suggests that the great resignation has become the “great talent re-shuffle.” While 4.4 million Americans quit their jobs in February, 2022 more than half of the workers who quit are switching their occupation or field of work, rather than leaving the labor force altogether.
What happened to workers who left their jobs in record numbers and why? Four research studies suggest what is contributing to this great talent re-shuffling.
1. MIT Sloan Management Review research based on data drawn from an analysis of 34 million US workers who left their jobs for any reason finds workers are quitting because of broader issues related to the culture of the company, the decision-making or priorities of management, and the unpredictability of worker schedules.
The MIT Sloan Management Review research finds that high quit rates are most pronounced among front-line customer facing industries, such as apparel retail, fast food, and specialty retail. See Figure 1.
2. Microsoft’s research study, the 2022 Microsoft Work Trend Index, examining why front-line workers are leaving their jobs in record numbers finds that what people want from work and what they’re willing to give in return has fundamentally changed, and this is what Microsoft calls The Employee Worth It Equation. This study shows that 47% of respondents say they are more likely to put family and personal life over work than they were before the pandemic. In addition, 53%—particularly parents (55%) and women (56%)—say they’re more likely to prioritize their health and wellbeing over work than before the pandemic. It’s no wonder the apparel retail sector has experienced the highest attrition rate since the pandemic. These retail workers are dealing with long checkout lines, closing fitting rooms, and the continued threat of bringing covid-19 home to their families
3. Third, a research study from Oliver Wyman finds more than a tenth of American workers who quit their jobs in warehouses, manufacturing, hospitality, and other hourly positions between August 2020 and March 2022 changed their occupation and completed training for new jobs. Some of these new jobs were in software and tech-related roles in logistics, finance, and healthcare. For many workers, the pandemic was not just a once-in-a-lifetime anomaly but an opportunity to change their occupations from pre-pandemic blue-collar work to what is being called “new collar work.” These workers who changed occupations obtained advanced training and certifications hoping to find to better, more flexible, and higher paid jobs.
4. Finally, a fourth research study conducted by Paychex and Executive Networks uncovered several reasons why full time and hourly workers are not satisfied with their current employment. This research study found:
- 3 in 10 employees currently feel that their work scheduling is unpredictable.
- 85% of employees report unpredictable work scheduling affects their overall well-being.
- Part-time workers (comprising 48% of this sample) reported greater financial distress due to working more unpredictable schedules than full time workers.
- Nearly 40% of the sample admitted to feeling burned out because of unpredictable work schedules, causing greater emotional and financial distress, with Gen Z and Millennials reporting the highest levels of burnout.
What Can Employers Do To Minimize Employee Turnover?
1. Make training & development part of the employee value proposition for all workers both full time and part time.
Increasingly front-line workers and hourly workers see employer funded training & development as the best way to advance themselves. Seeking career growth out of unstable job roles is particularly important for younger workers. Paychex and Executive Network research found this was especially important to younger workers. 28% of Gen Z and 24% of Millennials report not being able to take advantage of career development and advanced training because of their unpredictable work schedules. This is an opportunity for organizations to double down on training investments as a retention strategy and make training and internal talent mobility easily available for employees.
2. Understand the impact of unpredictable work schedules on employee well-being, especially for younger workers.
The Paychex and Executive Networks research shows employee well-being is being impacted by schedule unpredictability. Gen X, Millennials, and Gen Z (26%, 29%, and 24% respectively) were significantly more likely than Boomers (14%) to report struggling with personal mental health and financial issues because of work schedule unpredictability. A study of 28 Gap stores where employees received their work schedules two weeks in advance, and managers couldn’t cancel their shifts at the last minute, enabled Gap stores to minimize turnover and employee uncertainty regarding their work schedules.
3. Apply data to examine the root cause of your company’s turnover rate.
How much of an organization’s turnover is coming from voluntary resignations versus layoffs or firings? Companies should routinely conduct pulse surveys to uncover what is causing turnover. Research from MIT Sloan Management Review found a toxic corporate culture is the strongest predictor of turnover: 10 times more powerful than compensation! Toxicity is characterized by disrespect, unethical behavior, and the failure to promote diversity, equity, and inclusion. Conversely, this research finds companies with a healthy culture experienced lower-than-average turnover during the first six months of the Great Resignation.
4. Train leaders to lead with empathy.
Leaders need to better understand how the pandemic has impacted the workforce. The Microsoft 2022 Work Trend Index found that sixty-one percent of leaders say they are “thriving” right now — 23 percentage points higher than those without decision-making authority. Workers in this research are feeling the leader/worker disconnect daily.
Employers must realize workers are creating their own “Worth It Equation,” and constantly evaluating their current job role and what it will take to move into either a new role in the same organization or switch careers entirely. All four research studies present data on the need for employers to invest in training & development, make training easily available, offer more predictable work schedules and create an inclusive workplace culture.