The ‘Hidden Resignation’: Employees are checked out [Full Article]

A friend of mine recently turned down a job promotion that included...
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ECONOMY

Employers are failing to address the new realities of work — and it's sparking a 'Hidden Resignation' of burned-out employees

By Krister Ungerböck


A friend of mine recently turned down a job promotion that included a raise of $100,000 a year. He has some financial flexibility to turn down the offer, since he's already a mid-level executive at a Fortune 1000 company and makes about $300,000 annually. He said he determined "it just wasn't worth it" since the promotion called for more travel and more time away from family.

The promotion was also less attractive because he was already committed to something else: a business idea he planned to do on the side. He was undeterred by the prospect that it might fail. The risks of time and money lost seemed worth it to him, whereas devoting even more attention to his salaried position held far less of a draw for him. He said the reason was that his company didn't value the kind of healthy work-life balance he was seeking.

My friend's attitude underscores the degree to which companies are failing to understand the full scope of what we're calling the Great Resignation. Workers aren't just quitting their jobs — many employees, disillusioned with the way their companies are mishandling the new realities of work, no longer feel able or motivated to devote themselves to their jobs the way they did before the pandemic. Call it the Hidden Resignation.

Divided attention

There are, of course, plenty of Americans who are actually leaving their jobs. In November, 4.5 million people quit, once again breaking the record and causing bosses everywhere to scramble to figure out why their workers are leaving. What these leaders don't grasp is that their turnover problem goes beyond employees finding new opportunities. Companies are actively driving their white-collar workers away by presuming that employees are still thinking the way they did before the pandemic: that their jobs are the most important things in their lives.

But in the face of novel challenges stemming from the pandemic — everything from the shift to remote work to closures of schools and daycare centers — many workers began to question the validity of their career as an identity. While most people aren't looking to withdraw from the workforce entirely — though opting out certainly has its proponents — they are increasingly ready to explore options that give them the meaning and control they find lacking in their current employment circumstances.

In a survey by McKinsey published in September, 40% of employees indicated they were at least considering resigning within the next three to six months. But even this statistic is just the tip of the resignation iceberg. Though the unemployment rate has stabilized from the uncertainty of the pandemic, Gallup found that employee engagement dropped in 2021 for the first time in a decade. Only about a third of employees reported being actively engaged in their work. The percentage of employees who have reported being actively disengaged has gone up since 2019.

This hidden resignation underscores why so many businesses are failing to keep their best and brightest from eyeing the exits. In the rush to offer workers pay bumps and similarly transactional perks — all of which are important — many employers are overlooking fundamental shortcomings of their business cultures.

Yes, better pay and benefits are essential for retention. But when employers focus on these things without also working to ensure that their people feel connected and fulfilled, they ignore what employees themselves say is driving them to reassess their relationship — or lack thereof — with their employers.

Why employees are disengaging

Employees who felt more or less content with their jobs before the pandemic have for more than a year now seen their employers' shortcomings brought into sharp relief. The radical upheaval of people's lives during the pandemic has left many workers questioning the longstanding presumption, at least in the US, that a life centered on devotion to the job is one worth living. In many cases, this realization has come about because of employers' poor responses to the shifts caused by the pandemic. In fact, a Wall Street Journal survey last year found that bosses' attitudes toward the pandemic had a significant effect on worker engagement.

A 2020 Stanford study showed that many companies responded to COVID-19 with layoffs and pay cuts. Even companies that didn't make such decisions showed a lack of understanding of and sympathy for their workforce. For example, many employers began holding mandatory videoconferences every day, sometimes more than once per day. Such regular disruptions to the workday harm worker productivity and increase the risk of burnout. Researchers even came up with a term for the exhaustion with video calls: "Zoom fatigue."

While top talent will always have better-paying offers to consider, employees are looking for more than a raise. A lack of career counseling and time spent helping workers chart a clear career-advancement path can prove particularly problematic when it comes to maintaining millennial employee engagement.

With a new outlook on their work and a desire to reorient their lives, many workers have found a new boss who gives them autonomy and flexibility: themselves. During the pandemic, fear of redundancy due to shutdowns drove a lot of talented people to start side hustles. Census Bureau data shows that Americans filed paperwork to start 5.4 million businesses in 2021 — far exceeding the record of 4.4 million set in 2020. While some budding entrepreneurs ultimately quit their day jobs, far more do not. They simply shift time and creative energy away from their salaried positions — a more under-the-radar sort of brain drain on companies.

In a Zapier survey of Americans conducted in December 2020, 34% said they had side hustles, while 24% indicated they were planning to start a side hustle in 2021. A survey from Dollar Sprout, a platform for people looking to start side hustles, asked people who indicated they had a side hustle how much time they spent on them; it found that the average time spent on those second gigs trended upward in 2021 and that the percentage of people surveyed who said they were spending over 15 hours a week on their side hustle had more than doubled from 2020, to 27% from 12%.

How can employers re-engage their workers?

As a former tech CEO, I believe that while fair pay and good benefits are the backbone of ensuring employees remain at a company, employers who want their employees to stay engaged need to focus more on listening and responding to workers' evolving needs.

More than a decade of ​​research by Brooks C. Holtom and his colleagues at Georgetown University's McDonough School of Business has found that "embeddedness" — the combination of an employee's feelings of belonging at work, their positive workplace relationships, and the sense that they would lose many valuable things if they resigned — is key for retention.

There are a few strategies that businesses can employ to foster a sense of embeddedness and make employees feel better about their jobs.

Employers need to help employees find mentors and build personal connections with other people at the company. Bosses should promote from within when possible and prioritize career development, which younger workers prize. For example, Wegmans Food Markets supplements initial training with job-specific training, such as trips to French and Italian vineyards for wine merchandisers, and offers financial assistance to employees pursuing college degrees. Thanks to efforts like these, Wegmans ranked fourth on Fortune's 2021 list of the 100 best places to work — and it has made the list every year since the company was founded. Such investments demonstrate to employees that the company values them and sees them as an important part of its future.

Managers should look for opportunities to grant capable employees more flexibility and autonomy. A 2017 study by the University of Birmingham found that employees with higher levels of autonomy over their work tasks and schedules reported greater job satisfaction and well-being.

People crave affirmation. In a 2016 survey, fewer than 20% of workers said they felt adequately appreciated for their good work, and 40% said that more frequent recognition — even if it's just a simple "thank you" — would prompt them to put more effort and energy into their work. Managers looking to keep their people engaged should make it a point to give encouragement and offer praise for individual team members, even if a project fails to meet its goals. If something in the process needs improvement, try asking employees how they would approach it; asking for their thoughts demonstrates confidence in your employees' capabilities.

Another way to foster embeddedness is to show employees how their professional efforts have positive effects on their communities. Alessandra Cavalluzzi notes in her book, "A Million Dollars in Change," that socially responsible companies that actively support their communities enjoy higher levels of employee engagement.

The shoe company Toms, for example, started by pledging to donate a pair of shoes for every pair it sold. In 2020, the company said it donates $1 for every $3 it makes to grassroots campaigns that matter to its employees. Companies like Toms that do this can help their employees feel like they are a part of something bigger and more meaningful than just bolstering their employers' bottom lines.

Finally, leaders need to demonstrate their personal commitment to building a more empathetic and purpose-driven corporate culture. Don't presume you already know your employees' concerns and priorities; ask for feedback and then take action to alleviate work and life stressors. The outdoor clothing and gear company Patagonia has provided on-site childcare for workers for nearly 40 years — because of this policy, in 2019 it said it had retained almost 100% of its new mothers over the previous six years.

Employees are moving away from "living to work" as their guiding ethos and embracing "working to live." They want to feel connected at work and valued by their organizations in ways that transcend salary. Like my friend, these workers want employers that encourage greater balance between their jobs and their home lives, not ones that try to entice them to sacrifice the latter for a bigger payday. More workers are feeling empowered to leave, whether in body or in spirit, if companies are unwilling to meet those needs.

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