This brilliant article from McKinsey follows on from our recent article on re-recruiting your staff. It highlights the ongoing (and worrying) trend that a record number of employees are quitting or thinking about doing so.
More than 19 million US workers—and counting—have quit their jobs since April 2021, a record pace disrupting businesses everywhere.
The full article is well worth reading, especially since UK attrition is heading the same direction as in the US, but for the sake of condensing what is a fairly lengthy article – I’ve noted some of the important points and possible solutions below.
What are businesses doing wrong when it comes to dealing with attrition?
Rather than take the time to investigate the true causes of attrition (which refers to a gradual but deliberate reduction in staff numbers occurring as employees retire or resign and are not replaced) many companies are jumping to well-intentioned quick fixes that fall flat: for example, they’re bumping up pay or financial perks, like offering “thank you” bonuses without making any effort to strengthen the relational ties people have with their colleagues and their employers. The result? Rather than sensing appreciation, employees sense a transaction. This transactional relationship reminds them that their real needs aren’t being met.
If the past 18 months have taught us anything, it’s that employees crave investment in the human aspects of work. Employees are tired, and many are grieving. They want a renewed and revised sense of purpose in their work. They want social and interpersonal connections with their colleagues and managers. They want to feel a sense of shared identity.
Yes, they want pay, benefits, and perks, but more than that they want to feel valued by their organisations and managers. They want meaningful—though not necessarily in-person—interactions, not just transactions.
Here are some useful things to think about and ask yourself when it comes to tackling attrition:
Do we shelter toxic leaders?
Executives who don’t make their people feel valued can drive them from companies, with or without a new job in hand. If you don’t have leaders who motivate and inspire their teams and lead with compassion, you need them—desperately.
Do we have the right people in the right places (especially managers)?
Many employers in our survey reported having the right people but not necessarily in the right places. When it comes to managers, this problem can be particularly damaging, especially in hybrid environments, where new leadership skills are required. Training and capability building will be crucial for managers and executives who didn’t come from hybrid or virtual environments—in other words, for everyone from the C-suite to the front line.
How strong was our culture before the pandemic?
If you’re like many executives we know, you see a return to the office as a way to address lingering culture and connectivity concerns. Or you prefer a full return to the office because you miss it yourself (a case of “absence makes the heart grow fonder”). You should remember that although the needs of your employees have changed, your culture may not have kept up, and any prior organisational weaknesses are now magnified. Employees will have little tolerance for a return to a status quo they didn’t like before.
Is our work environment transactional?
If your only response to attrition is to raise compensation, you’re unwittingly telling your people that your relationship with them is transactional and that their only reason to stay with you is a pay check. Your very best people will always have a better cash offer somewhere else. You want to solve the problems of the whole person (not just their bank accounts) as well as the whole organization.
Are our benefits aligned with employee priorities?
Free parking or entertainment-related perks are probably not top of mind for employees right now. Among survey respondents who had left their jobs, 45 percent cited the need to take care of family as an influential factor in their decision. A similar proportion of people who are thinking of quitting cited the demands of family care. Expanding childcare, nursing services, or other home- and family-focused benefits could help keep such employees from leaving and show that you value them as whole people. Patagonia, long the standard-bearer for progressive workplace policies, retains nearly 100 percent of its new mums with on-site childcare and other benefits for parents.
Employees want career paths and development opportunities. Can we provide it? Employees are looking for jobs with better, stronger career trajectories. They desire both recognition and development. Smart companies find ways to reward people by promoting them not only into new roles but also into additional levels within their existing ones. This is one way companies can more quickly reward and recognise people for good work.
How are we building a sense of community?
Remote work is no panacea, but neither is a full on-site return. In-person connectivity continues to have massive benefits for your organisation. But it will require considerable management attention to get right as health and safety concerns continue to evolve, particularly because employees’ needs, and expectations have changed. For example, employees with unvaccinated young children may feel unsafe at large in-person gatherings. One organisation took an inclusive approach by sending out themed “staycation” packages: a movie night with popcorn and a gift card; a game night with family-oriented games, chips, and salsa; and a “virtual spa day” complete with face masks, tea, and chocolate. The company created a Slack channel for posting photos and stories, encouraging employees to share these experiences. Another organisation encouraged connectivity among employees by offering coffee gift cards to those who signed up to participate in one-on-one “coffee chats” with employees they didn’t know—a perk that improved connectivity and helped people expand their networks.
The bottom line: the Great Attrition is happening, it’s widespread and likely to persist—if not accelerate—and many companies don’t understand what’s really going on, despite their best efforts. These companies are making ineffective moves based on faulty assumptions.
If you would like to unpick staff attrition further or want a sounding board for ideas you’re considering to retain your teams, then I would love to chat. Every Wednesday I book out an hour to hold a FREE agency leaders surgery. I’d be very happy to lend an ear. You can help yourself to my calendar, here. Speaking to a diverse group of agency leaders helps me stay current and contextualise the issues I’m seeing with my clients. So please see this conversation as a genuine collaboration where we both hope to learn something new.
Andy.