More than 19 million US workers have quit their jobs since April 2021, according to McKinsey. People are migrating to better jobs and 45% of employees now work remotely. Research conducted by Vanson Bourne found that 90% of organizations face challenges with attracting and retaining staff.
When will it end?
Employee attrition will ease, but it won't stop. The flood of resignations was concentrated and heightened by the pandemic because many people sat tight in their jobs amid the uncertainty — only to make the jump when the right moment arrived.
We're now in a candidates' market and it's not just about salary. If organizations fail to offer flexibility, people will continue to move. It's easier for employees because the whole recruitment process is now so much faster, with much of it online, and many people can work from anywhere.
Companies are feeling the pain. Losing great people hits productivity and profit because it's harder to maintain agility, efficiency, and resilience. Even if you hire someone quickly, giving them the training and experience to fill gaps effectively takes time. But it doesn't stop there. Employee attrition has had some other uncomfortable knock-on effects. Three spring to mind immediately:
- Paying higher salaries to attract new staff can create unhappy employees among your existing, loyal workforce. They see the new rates and demand a raise; without one, they could quit, which can create a vicious circle.
- Graduates and rising stars need time in-person with experienced colleagues so they can develop and flourish. But coaching, mentoring, and shadowing is a problem when no-one's in the office — or there's no office. For many, it could feel as if they're simply in the gig economy, dipping in and out of jobs without much to gain or lose.
- Going forward, all types of workers could begin to feel less engaged. It's so much easier to hand in your notice when you've never met your boss in person, been out for drinks with colleagues, or have any good friends at work. Everything becomes transactional.
So where are things going wrong — and how do we fix them?
How to make jobs 'sticky'
The Vanson Bourne research conducted during the pandemic unearthed some curious findings. In many cases, executives at companies that did well at productivity and profitability believed they were doing all the right things. However, this wasn't the view of those we interviewed further down the organizations. And leaders just didn't understand the reasons why people would think of quitting.
Put simply, to retain their workforces, companies must strengthen their workplace culture so people feel emotionally invested. For employees, it's about knowing they're supported by the business, valued by their manager; that the work they do really matters, and they're properly connected with colleagues. These factors create a 'stickiness' to a job that can often mean more to someone than an uplift in salary.
Workplace culture — a top priority
Creating and strengthening a workplace culture that develops this stickiness must have active sponsorship from the top. CEOs should set out their vision and values, communicate these properly, and embed them within strategy. In particular, digital transformation initiatives must have people as their focus.
Clunky systems are a huge, daily frustration for people, eroding business agility and hitting the bottom line too. For example, in my company's 2021 Business Future Index & Maturity Model, 78% of respondents reported challenges with financial management processes — from outdated systems to data access issues and high human error rates.
Instead, people want intuitive tech that handles repetitive, humdrum tasks for them — so their jobs are more about the things they love and where they make a difference. Change can be achieved when data can be trusted, processes are simplified, and artificial intelligence and machine learning can be used to elevate people's jobs.
How to tell if it's working
It's important that digital transformation does more than supply your profit and loss statement with razor-sharp accuracy. If employees are one of an organization’s largest assets and costs, then executives need meaningful data that benchmarks their people, monitors their happiness, understands salaries, and helps them to plan for the future.
So often, the key data required is siloed and out of date. But it needs to be all in one place for a complete view of people and finance data. That way, you can react quickly, build an HR strategy that fits market realities, and check how your workplace culture initiatives are succeeding.
Bespoke hybrid models
In truth, there's not a one-size-fits-all strategy to improve people retention for organizations — or a single approach that will work for every employee. But it's possible to build a hybrid model that's far subtler and more bespoke than simply telling someone they "come into work on Mondays."
Executives must create a 'people experience' that reflects different ages, experience levels, roles, and expectations in ways that build lasting, rewarding relationships. Only then will the workplace feel sticky enough to keep the best people working for you — so you can avoid years of expensive, corrosive, and continuous churn.
Take the Business Future Index Maturity Benchmark and measure your strategic balance between profitability, productivity and people.