We’ve reached the point where we’re no longer relying on anecdotes alone to assess the impact that the pandemic has had on workplace dynamics. Work Institute’s annual Retention Report has been tracking unemployment trends and causes of turnover for years, and 2020’s data is presented through the lens of Covid-19.
We recommend all leadership at your organization read the full report, as it’s packed with a lot of interesting and relevant data about what’s causing people to stay with their current employer, or leave for greener pastures. Below, we’ll highlight a couple of especially interesting takeaways gleaned from the report.
Bottled-Up Turnover: A Cautionary Tale
The majority of the report focuses on voluntary turnover, since that’s more controllable (and thus preventable, to a certain degree) by employers.
Voluntary turnover (that is, an employee deciding to leave on their own terms) has been on the rise since 2010, and hit a peak of 3.6 million departures in July of 2019. Unsurprisingly, when the pandemic hit eight months later, voluntary turnover went on the decline as it became unclear what the future would hold. Many companies stopped hiring, creating fewer job opportunities on the market for the already-employed to flock to. Those who were not laid off during the pandemic then decided to hold on to their jobs (whether they wanted to or not) as they waited to see how things shook out. By April of 2020, fewer than 1.9 million workers had chosen to leave their jobs, down almost 50% from just three months earlier.
But, as we all know, the story doesn’t end there. By December of 2020, we were back up to 3.4 million voluntary departures again. This has left many wondering if there’s “bottled-up turnover” still sitting around waiting to explode. The pandemic isn’t over, but as the economy improves, job openings increase, and unemployment declines, will voluntary turnover continue to increase? Work Institute, the publisher of the report, predicts that it will.
Chart via Work Institute - 2021 Retention Report
Job Satisfaction, Manager Relationships & Work Environment Issues Continue to Stagnate
Chart via Work Institute - 2021 Retention Report
This chart shows the reasons that people left during each quarter of 2020. Some spikes are to be expected, such as an increase in involuntary reasons (layoff or termination) and health/family reasons in Q2 and Q3 as the effects of the pandemic took hold. What’s surprising, however, is that some categories remained relatively stable throughout the year:
- Job Satisfaction (workload/stress, availability of resources, training, type of work, empowerment)
- Manager Relationships (professional behavior, support, knowledge and skills, communication)
- Work Environment (culture, facilities, mission/values, safety, coworkers, diversity)
This means that these problems will always persist, even in the face of extreme and unusual circumstances like a global pandemic. The good news is that these factors are entirely within your control and can always be improved upon.
How, you ask? By having regular feedback sessions (sometimes called a “stay interview”) with employees to find out if they have what they need to do their job well; by hiring (or promoting) managers who are invested in the success of their individual team members; and by creating a safe working environment with a fun culture that embodies your core values.
Pro tip: Watch our webinar on "The Great Resignation" for more actionable advice on how to uncover and react to these types of problems before they lead to turnover. Watch now →
The Good News: Retention Efforts are Working
The Retention Report classifies the reasons people leave as “more preventable” and “less preventable.” More preventable reasons are factors that employers have some degree of control over—things like career growth, work/life balance, job satisfaction, manager satisfaction, work environment, and compensation. Less preventable reasons include health and family, retirement, relocation and involuntary reasons such as termination or layoff.
The good news is that, despite all the change and uncertainty that came with 2020, the more preventable reasons for leaving were reduced from previous years. Within this category of preventable reasons, employees’ perceptions of their employers and managers continued to increase positively, due in large part to increased internal communications necessitated by the pandemic. Key takeaway: frequent and transparent communication yields great results!
Chart via Work Institute - 2021 Retention Report
Additionally, first-year departures were down substantially compared to previous years, suggesting that onboarding efforts have been effective when paired with hiring that focuses on culture fit, as opposed to skills and experience. The key takeaway here is that getting feedback from employees early in the employment life cycle is critical to ensuring that onboarding efforts work, and that employees are not at risk of jumping ship in the early stages of employment. Generally speaking, if you can keep them for longer than a year, they’ll stay for many more to come.
Career Stage vs. “Generational Differences”
The report makes special effort to highlight the importance of not being influenced by false narratives, such as the idea that millennials leave for work/life balance issues at a higher rate than other cohorts. That type of mindset can lead to labeling of workers (unintentionally or otherwise) that causes them to be treated differently due to their age or generation. And that’s a red flag for just about any employee.
Instead, Work Institute says it’s more about employees being influenced by their career stage, rather than so-called generational differences. Employees in their 20s are early in their career, and therefore more likely to leave for reasons tied to career advancement. Conversely, employees in their 30s and 40s are more mature and have a better sense of what fulfills them personally (whether it’s raising kids or running triathlons) and are therefore more likely to leave for work/life balance reasons. Keep these types of motivations in mind as you evaluate incentives and workplace recognition.
There’s a lot still up in the air, as we’re not out of the pandemic just yet. One thing we can say for sure from the report: environment, work/life balance, relocation and job satisfaction are all expected to increase in the coming year as reasons for leaving. That’s why now is the time to start reconnecting with your employees and gauging their level of satisfaction, before all that bottled-up turnover starts to erupt.
Not sure where to start? Watch the recording of our webinar on “The Great Resignation” to get more ideas for employee retention.
