A new 2022 report published by McKinsey & Company found that more than 4 million people in the U.S. have quit their jobs so far this year, and experts see no sign of this record-breaking trend ending anytime soon. The same report found that 40% of people currently in the workforce are still unhappy in their roles and are actively looking for new opportunities. A perfect storm of the coronavirus pandemic, concerns around inadequate working conditions, and widespread cultural shifts have led to what economists and labor experts are calling “The Great Resignation.” In 2021 alone, 47.8 million workers quit their jobs, averaging 4 million per month.
Companies across industries are struggling to fill essential roles, and business is hurting because of it. Productivity suffers, supply chains are strained, and employee engagement and morale is at an all-time low. Additionally, due to the highly technical and collaborative nature of a lot of roles, the cost of replacing an employee is continuing to rise. According to research from Gallup, the cost of replacing an individual employee can cost a company up to two times the employee’s annual salary—and that’s a conservative estimate.
The problem falls in that rather than invest the time and resources to find out the true causes of high turnover, companies are resigning themselves to well-intentioned quick fixes that they have always fallen back on, like offering one-time bonuses. But the result is that employees feel as if their place in the company is simply transactional. While fair and competitive compensation is clearly a priority for workers, the past two years have shown us that many employees are craving more investment in the human aspect of work. Much to the surprise of many, the McKinsey report found that the top reason employees are leaving their jobs is the lack of career development and advancement opportunities. Some employees even expressed willingness to accept lower compensation from a different company that was willing to heavily invest in their career development.
In addition to lack of career development and advancement, several other “human” elements of work made the list for top reasons people are quitting their jobs. 34% cited uncaring and uninspiring leaders, 31% said their role lacked “meaningful” work, 26% expressed feeling as if they were surrounded by unreliable and unsupportive people at work, 26% cited a lack of support for health and well-being, and 14% reported feeling like their work environment was non-inclusive or un-welcoming. Of the 12 top reasons for quitting previous jobs listed in the McKinsey report, only one was related to financial incentive.
This new challenge requires business leaders to consider new solutions, and blindly throwing money at the problem won’t be enough. Combatting the high turnover rate is going to require a proactive approach to ensuring employees are feeling appreciated and engaged in their roles. While investing in employee development and career advancement is an ongoing journey that doesn’t have a quick-fix solution, there are things you can start doing today to better support your team members and prevent turnover. To start, in your next one-on-one try asking these questions: What can our company do to make you feel better supported at work? And, What are your advancement goals in the company and how can we help you get there?
In short, the solution to high turnover is not finding more “committed” or “loyal” team members; it is improving your company’s efforts to show commitment and loyalty to your existing team members.