The Great Resignation
“It’s time to see what I can do
to test the limits and breakthrough.”
Queen Elsa “Let It Go!”
Frozen (2013). Disney Studios.
In the Disney movie ‘Frozen,’ the main character, Elsa, has been made Queen. She harbors a hidden secret that she can freeze almost anything she comes in contact with. When she inadvertently puts her country into an endless winter freeze, she escapes to the mountains, where she builds an ice castle, and the above quote is heard in the song ‘Let It Go”. The song reveals her inner struggles and her decision to resign from being the Queen of Arendelle. The song itself reveals her ‘Great Resignation’ on a grand scale.
Last year, I wrote ‘About The Great Resignation,’ the trend in the data from the US Bureau of Labor Statistics, of the sudden increased and sustained trend of people leaving their employment, often with nothing to go to.
Using the revised seasonally adjusted Quit Rate from the US Bureau of Labor Statistics, it can be seen that ‘The Great Resignation’ didn’t just happen; it was a progressive event.
Quits Seasonally Adjusted and Revised 2020 (US Bureau of Labor Statistics)
Quits Seasonally Adjusted and Revised 2021 (US Bureau of Labor Statistics)
What is evident from the ‘Seasonally Adjusted Quit Rates’ from 2020-2022, is that the ‘Quit Rate’ immediately prior to the pandemic being declared (January 2020), was 2.3%. According to the Bureau of Labor Statistics, it had been 2.3% since August 2019, and it had been 2.3% for 9 of the 12 months of 2019.
In the first year of the pandemic (2020), the average dropped from 2.3% to 2.12%. During this time, people may well have thought that the pandemic wouldn’t last long. In 2021, the pandemic appears to have impacted the workforce, with the annual average ‘Quit Rate’ rising to 2.73%. The highest ‘Quit Rate’ was 3.0%, occurring in both November and December 2021. For the 8 months through to August 2022, the average for the ‘Quit Rate’ sits at 2.81%, with the highest rate being 2.9%, not far from the previous high of 3.0% in 2021. This, of course, sits against an unemployment rate of 3.5% for September 2022.
What the data is telling us, of course, is that an ongoing shift in the mindset of workers is occurring and has been coming for some time. Increasingly, with a healthy unemployment rate, workers are looking over the horizon for opportunities they had not previously considered. Changing employer for career advancement is still a feature, but it is hard not to arrive at the conclusion that many are looking to change careers and even pursue their own business opportunities. What the data is also telling us is that whilst the ‘Quit Rate’ appears to have plateaued at 2.8%, that’s only 1.2% off the peak and 0.5% off the pre-pandemic figure. In other words, the higher ‘Quit Rate’ would seem to be the new normal, with people prioritizing what is important to them. Increasingly it is not work! Stephen R. Covey captures this change of sentiment and mindset with a thought-provoking question.
“How many people on their deathbed wish they’d spent more time at the office?”
Covey, Stephen, R., Merrill, A. Roger., Merrill. Rebecca. R. (2015). First Things First (The Interactive Edition)(eBook). Miami: Mango Media. p.9.
For an employer, this really means they need to find ways to engage with their employees, and fundamentally, this means creating a sense of community. If you ask an Anthropologist, they will say that humans are social creatures and, as a result, they have a need to belong. There is much that organizations could learn from indigenous cultures around the world. A key feature of indigenous cultures is their sense of kinship and their sense of belonging to their tribe or village. They often have a spiritual connection to the land that binds themselves and strengthens this sense of community and, as a result, their sense of identity. In this respect, whilst ‘The Great Resignation’ is not just the new norm in the labor market, it has, as I predicted in my last article, ‘About The Great Resignation’, become a social force within the labour market, creating openings that in turn feed a supply shortage.
“As an Anthropologist, I would be inclined to refer to the ‘Great Resignation’, if the trend continues, as the ‘Employee Revolution of Expressive Disengagement and Disenchantment’. Think about it, resignation is as highly disengaged and disenchanted that an employee can get.”
Ivers, David. (5 Nov. 2021). About The Great Resignation.
However, since writing that, another feature has started to surface in the literature around ‘The Great Resignation’ and ‘Employee Engagement’. The ‘Quiet Quit’ notion is now being openly discussed. Simply, it is the notion that an employee can become so disengaged that they simply do the minimum to keep their job but not much more. Often it is simply implementing their Role Description in a very literal manner. At the heart of ‘Employee Engagement’ is trust, pure and simple. According to Stephen M. R. Covey in his excellent book, ‘Smart Trust’, citing the extraordinary work of Neuroscientist Professor Paul Zak, trust is at the heart of retention and economic improvement.
“In teams and organizations, giving trust manifests in greater employee engagement and retention, increased customer loyalty and referrals, and other economic benefits. The Paul Zak study we referenced in chapter three showed that sending intentional signals of trust created reciprocity that resulted in a nearly threefold increase in economic returns.”
Covey, Stephen. M. R., Link, Greg., Merrill. Rebecca. R. (2012). Smart Trust (eBook). London: Simon & Shuster. p192.
The question, of course, is how does one go about establishing and maintaining trust. The reference to the work of Neuroscientist Paul J. Zak, Professor of Economics, Psychology, and Management at Claremont Graduate University, is worth revisiting. According to Professor Zak, there are 8 things that leaders could and should do to create trust in the workplace and, ultimately, high-trust organizations.
- Recognize excellence.
- Induce “challenge stress.”
- Give people discretion in how they do their work.
- Enable job crafting.
- Share information broadly.
- Intentionally build relationships.
- Facilitate whole-person growth.
- Show vulnerability.
Zak, Paul. J. (2017). The Neuroscience of Trust. Harvard Business Review January-February 2017.
Leaders should always be striving for excellence in their team. Implementing these suggestions from Professor Zak will lead to a focus on both team and individual excellence, their ability to thrive and flourish and be highly engaged with stakeholders, including customers, in a positive and meaningful way. Sharing information where appropriate, especially the ‘big picture’ information about the organization, its goals, values, and plans, is part of this trust building. This allows people to see purpose and meaning in what they do. For more information on this, see my article on ‘Leadership and Flourishing.’
Being intentional about positive relationships at work is also an important part of the puzzle. According to Paul J. Zak, there is a lot to gain by focusing on relationships at work.
“The brain network that oxytocin activates is evolutionarily old. This means that the trust and sociality that oxytocin enables are deeply embedded in our nature. Yet, at work, we often get the message that we should focus on completing tasks, not on making friends. Neuroscience experiments by my lab show that when people intentionally build social ties at work, their performance improves. A Google study similarly found that managers who “express interest in and concern for team members’ success and personal well-being” outperform others in the quality and quantity of their work.”
Zak. Paul. J. (2017). The Neuroscience of Trust. Harvard Business Review January-February 2017.
Often a lack of engagement with employees is usually a sure sign that a toxic culture is in place.
‘The Great Resignation’ is not just about people leaving their jobs in large, sustained numbers. As already noted, some of those numbers will be people retiring or taking a promotion in another organization within the same industry. The bulk, though, is leaving for a different industry or opportunity, and many have no idea as to where they will be next. The ‘Working From Home’ movement within the workforce is a real phenomenon and one that has the potential to reengage employees, as it requires the employer to trust people. COVID-19 let the genie out of that bottle, and people know that they do not have to sit in traffic jams or be on a crowded train or bus for a long time just to get to work. You will often hear it said that ‘people don’t leave their jobs; they leave their boss(es).’ In other words, many people resigning in ‘The Great Resignation’, have done so because they have become so disengaged with the organization their work was no longer life-giving. We have reached the point where ‘The Great Resignation’ needs to become ‘The Great Employee Re-Engagement.’ It may well be that being a wonderful boss is merely a good start and that, increasingly, more is being expected. The upshot is it makes the ‘ordinary’ boss look very ‘ordinary.’ Harvard Business School Professor, Amy C. Edmonds, noted how learning, thriving, and intentional teams, when combined, become a real game changer and, hopefully, a ‘new normal.’
“As we have seen, teaming and learning thrive when they are intensely focused on the work that must be done to find, keep, and care for customers…A learning culture emerges as a by-product of practice with a new way of working—one that is more interdependent, more aware of others’ tasks and needs, and more willing to improve—not the other way around. For example, as Simmons employees experienced a new way of working, a new empowered, high-trust culture took shape around them.”
Edmondson, Amy, C. (2012). Teaming: how organizations learn, innovate, and compete in the knowledge economy. San Francisco: Jossey-Bass. Ch 8 (p40 of 47).
Of course, a high trust culture runs contrary to a poor or even toxic culture in the workplace. We need to conceive of workplaces and organizations as a community that is situated within a community and serves a community. Culture and community go together. It is hard to talk about one without the other. A strong, healthy culture will be one where trust is either significant or high within the organization and where ‘Psychological Safety’ is well established. Whilst the high ‘Quit Rate’ will obviously see significant numbers of ‘Job Openings’ occur, anecdotally, there is evidence to suggest that employers are struggling to find quality staff to fill these vacancies. It could, of course, be ‘word of mouth’ advertising at work. What would happen if every disengaged employee that has resigned shared their experiences of a particular employer with six friends, and those six friends passed it on to their six friends and so on? The impact would be phenomenal, especially if they have a similar boss. The double ‘whammy,’ of course, is what happens when your customers discover their favorite employee has resigned. How sure are you that they won’t leave as well? The spiral then doesn’t just become a spiral of attrition but a financial spiral as well. In other words, not seeing, not valuing the people dimension of the organization, and not engaging people so that they flourish threatens the organization’s viability.
“An MIT Sloan study found that toxic workplace cultures were a major reason for 2021’s Great Resignation. It proved toxic cultures were 10.4 times more powerful than pay in predicting a company’s attrition rate…Companies also have a significant financial motivation for promptly elevating humaneness within their cultures: a study by University of California, Irvine professor, Ian O. Williamson, estimates employers will, on average, pay 122% of a departing employee’s annual salary to find and train their replacement.”
Crowley, Mark. C. (2022). Lead From The Heart: Transformational Leadership For The 21st Century (eBook). Carlsbad. California: Hay House, Inc. Ch2 (p19 of 32).
Often a lack of engagement with employees is usually a sure sign that a toxic culture is in place. This often stems from the senior leadership team or perhaps the CEO themselves, reciting the ‘Mission, Vision and Values’ of the organization but are rarely seen carrying through with those details or living it. Likewise, allowing teams, units, branches, etc., to operate without any oversight of minimal checks and balances also provides fertile ground for a toxic culture that most likely disenfranchises staff in other areas of the organization. The problem becomes quite extensive. The solution is fairly self-evident, but the leaders that allowed the toxic culture to occur need to be truly honest with themselves and their teams.
“Worldwide, with virtually no exception, some 50 to 75 percent of employees are “not engaged” in their work. One cause tops the list: bad bosses. Begin—immediately—a deep-dive assessment of your frontline chiefs. No strategic move could be more important than upgrading the quality of your full portfolio of frontline chiefs. Consider launching a formal ‘Frontline Leaders Excellence Program.’ Make it a first-order strategic priority. Right now.”
Peters, Tom. (2021). Excellence Now: Extreme Humanism (eBook). Chicago, IL: Networlding Publishing. pp97-98.
As the world lurches towards the possibility of a recession and ‘The Great Resignation’ continues, organizations that insist on being revisionists will continue to tread water and wonder why they aren’t attracting good employees and loyal customers. Their failure to join the dots, whilst breathtaking, can only end in one of two ways. Either social forces change, or their boards will replace their senior leaders with people who are up to the task at hand.
“And one thought crystallizes like an icy blast
I’m never going back, the past is in the past.”
Queen Elsa “Let It Go!”
Written by: Kristen Anderson-Lopez, Robert Lopez
Lyrics © Walt Disney Music Company