Associate Client Partner, Leadership Development, Executive Coaching, Diversity, Equity & Inclusion
Sitting, Not Quitting
Only two years ago, nearly every leader was begging for strategies to stem the tide of employees quitting. Now they’re learning an interesting lesson: a decrease in employee quits might mean an increase in employee disengagement.
The quit rate for people in private-sector jobs has essentially returned to pre-pandemic levels, according to the latest government data. This means that companies are no longer desperately trying to fill open spots. But it also may mean that they’re carrying unmotivated workers who would otherwise have left on their own. According to a recent survey, employee engagement has reached its lowest level since 2015.
About 3.9 million people, or 2.7% of private-sector workers, quit their jobs in March, the lowest rate since the depths of the pandemic in 2020 and just slightly above the 2.6% rate reported in January of that year, when COVID-19 was just starting to become a global health emergency. Since April 2022, when it peaked at 3.3%, the nation’s quit rate has been steadily declining. During many individual months in both 2021 and 2022, the number of quits exceeded 4.5 million.
Companies that were used to losing only a few employees a year were seeing turnover rates of 20% or even higher. To stem their losses, leaders tried big salary raises, improving benefits packages, skip-level promotions, reducing vesting periods of stock awards, flexible work hours, and a slew of other incentives.
None of this stopped the quitting as much as the slowing economy over the last few months has. “People are now thinking twice about jumping,” says Flo Falayi, a Korn Ferry associate client partner and leadership coach.
Dissatisfied employees who would have quit a year ago, confident of quickly finding a better alternative, now will quit only if they really hate their job, agrees Juan Pablo Gonzàlez, a Korn Ferry senior client partner and sector leader for the firm’s Professional Services practice.
The decline in quitting comes at a time when many executives, believing their firms' profits aren’t growing enough, are trimming expenses. Experts say managers will be tasked with doing a better job of motivating their employees, often with fewer resources. But that’s a challenge in an age of greatly reduced quitting, because some firms may not be able to quickly assess who is unengaged, unproductive, or both.
During the pandemic, many firms suspended performance reviews. Plenty of reasons justified taking that action at the time, among them the need to devote management focus to navigating remote work. But without some kind of review process, managers may be missing two years’ worth of employee-performance data. In other words, it’s possible that performance and engagement really have declined, but without the data, employers can’t be certain. “It’s your problem now, maybe it’s time to get back to it,” says Kristi Drew, Korn Ferry’s global account leader for its Financial Services practice.
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