Senior Client Partner, ESG and DE&I Strategist
The Great Resignation: ‘It’s Killing Companies’
Companies run through a basic set of plays during hot job markets. Offer potential recruits more money; give bonuses, promotions, and extra days off to existing workers who get competing offers; and make some sort of commitment to career development for everyone.
But that hasn’t stopped the so-called Great Resignation of workers saying goodbye to their current job. In each of the last six months, there have been at least 2.5 million quits nationwide. The nation had never had more than 2.4 million quits a month since the government started tracking the statistic in 2000. Companies that are used to losing a few employees a year are seeing turnover rates of 20% or even higher. “It’s killing companies,” says Andrés Tapia, Korn Ferry’s global strategist for diversity, equity, and inclusion. “The old strategies to attract and retain workers aren’t working.”
Some forward-thinking firms are considering several unconventional tactics to stem the tide. One idea, so-called skip-level promotions, involves advancing existing employees multiple rungs up the corporate ladder. These multilevel advancements may be a way to appease employees who have been doing an excellent job for years but were held back by corporate rules limiting yearly promotions. “It’s totally untraditional,” says Ayana Parsons, a Korn Ferry senior client partner who leads board and CEO inclusion efforts for the firm. “But if you have someone with great potential, puts points on the board, and is a flight risk, you have to create opportunities for them.”
Another strategy involves reducing the equity vesting periods of stock awards. Instead of an award not being fully vested for four years, some firms are making them fully vested after three or even two years. Over the long run, it shouldn’t cost the company much—they had made a commitment to pay the employee—but experts say it could sway workers who are evaluating other jobs with higher salaries.
However, even these new ideas may not be enough. Millions of parents, a large class of workers, have been working from home, which has allowed them to do their roles without needing childcare. A return to the office may mean these workers have to decide between a job or taking care of their family. “Companies have to step up and do more,” Parsons says.
At the same time, experts say organizations must recognize that the overwhelming number of people who are quitting their jobs aren’t doing it because of the attractiveness of a new job—they’re leaving because they’re dissatisfied with their current employer. That includes low wages or uncompetitive benefits, of course, but it also might involve an unfulfilled promise to become a more inclusive organization, or a lack of commitment to developing that worker’s career. Many employees also want their organization to advance social causes and have a greater purpose than just making profit. “If it’s not, then employees are saying, ‘I’m out of here,’” Tapia says.
Organizations won’t know which of these reasons are most important unless they listen to their employees. Experts suggest leaders do listening tours, town hall meetings, focus groups, and surveys of employees. “Talk ‘with’ your employees, not ‘at’ them,” says Elise Freedman, a Korn Ferry senior client partner and leader of the firm’s Workforce Transformation practice.