It’s not just money. This is what’s still driving the Great Resignation

It is rather staggering that nearly 69 million people quit their jobs in America last year—and the common assumption is that everyone who resigned found a new employer willing to give them a meaningful bump in pay. Aligned to this thinking, of course, companies could effectively end the Great Resignation, and stop the hemorrhaging, by beefing up their employee compensation and benefit plans. But if this really were the cure-all, shouldn’t we have seen a significant decline in turnover in recent months, rather than a record number of people packing up their boxes and heading elsewhere? 

I recently asked Gallup’s longtime chief research scientist, Jim Harter, to apply his data to what’s occurring in our workplaces and to help us pin down the causes and remedies of what’s become business’s biggest problem.

The biggest problem

Spoiler alert: Pay and benefits clearly matter: 64% of job seekers say the desire to earn more money is an important driver of the job search. But we must look well beyond the easy answer to fully understand why so many people have grown so disheartened by their current work experiences.

“Pay is important, and it must be fair,” Harter says, “but two-thirds of the reasons people actually left jobs in 2021 were due to issues related to their engagement and their overall well-being.”

Gallup’s research shows that 42% of the reasons people are quitting are tied to how they feel about their bosses and organizational cultures. And low engagement is specifically experienced when workers conclude they aren’t growing, appreciated, or treated with care and respect. Another 21% boils down to well-being, employees’ feelings about their work-life balance, work schedules, and their ability to work remotely some of the time.

“The whole intersection of work and life is a major influence over why people are attracted to a new employer and choosing to leave another,” Harter says. “Something organizations need to become more mindful about is how work and personal life now blend, and the role employers must play in supporting the whole person, not just the worker.“

To that end, Gallup’s well-being survey asks people to grade themselves on a scale of 0 to 10 in five key areas of their lives: their career, social life, financial stability, physical health, and connection with others. Anyone giving themselves an average score of seven or above is deemed to be “thriving,” and those with an average score of four or lower are seen to be “suffering.” Everyone in between is perceived to be “struggling.”

“What we’ve found,” says Harter, “is that employees who are struggling or suffering in life have over two times the amount of turnover.”

Consequently, the goal for all organizations must be to create a “net-thriving culture” where they maximize the percentage of workers who are thriving and reduce the percentage who are struggling or suffering.

The well-being litmus test

Perhaps the most important question Gallup asks workers in its engagement survey is whether they feel their organization cares about their personal well-being. Pre-COVID, the percentage of people who strongly believed their company cared about them was only in the low 20% range. But in the early months of COVID, when employee responses were heavily correlated to how their manager communicated with them and stayed connected on a regular basis, it jumped to nearly 50%—a huge shift. But since then, it’s already declined to 35%.

“Leaders need a realization that building a culture that improves lives will be required to attract and retain great people,” Harter says. “There’s a huge gap today between knowing this and getting it done.”

The remote-work factor

The past two years of the COVID-19 pandemic have provided a long period of self-reflection for all of us. And a major realization many people have experienced is that not having a commute to work every day profoundly enriches their lives. In fact, the number one reason people want to work remotely full-time or on a hybrid schedule is to avoid commuting and to put their saved time into better use—including into their work.

“Rather than call it the Great Resignation, it would be better to call it the Great Disruption, because of how the COVID era has permanently disrupted our workplaces,” Harter says. “What many managers don’t realize is that the most desired perk prior to COVID was having a flexible work schedule. But now, that desire has been turbo-charged, and we must meet the moment by giving employees greater flexibility on where and when they work as long as they get their work done.”

Coincidentally, Gallup employees have had flexible work schedules since 1969, and Harter was in his home office on the day of our discussion.

In a recent survey of 10,000 people working in the finance, technology, and energy sectors, 84% of participants said they want to work remotely two or more days per week. And Gallup believes a hybrid schedule like that can not only work well for most organizations, it gives people greater autonomy, which leads to thriving.

Managers should assist employees in setting their individual schedules and can best accomplish this by asking them three key questions:

• How is your work done most effectively?
• What leads to our best culture and team collaboration?
• How can you best meet the needs of our customers?

People have a new realization that they needn’t be in the office every day to be productive, Harter insists. “And if leaders don’t recognize that, they’re going to be in jeopardy,” he says. “And, when there’s a big difference between how people are currently working and what they prefer, we see higher rates of turnover, lower engagement and well-being—and more burnout.”

The management issue

One of Harter’s most emphatic conclusions is that many workplace managers lack the ability to perform their jobs effectively, especially when employees no longer work in the same place most days: “We’ve seen engagement improve steadily over the last decade in the U.S. and globally. But it’s dropped off in the second half of 2021, and we know from our work that 70% of a person’s engagement at work is attributable to the effectiveness of their manager.”

Gallup has defined a manager’s most essential skills and they include helping employees to set clear goals, being effective at having meaningful conversations, knowing what’s important to every person, and connecting with them individually once a week. They must be very secure in holding people accountable, generous in praising achievement, and be highly effective coaches. “The best managers are great coaches,” Harter says, “mostly because in order to coach someone you have to really care about them and want the best for them in all aspects of their life.”

Any manager reading this likely won’t be surprised to learn that, outside of healthcare workers, where the stress of the COVID pandemic has taken an enormous toll, workplace managers are suffering from burnout more than any other job type. The challenge to organizations then is to think more holistically about the workloads of managers and to ensure they are afforded sufficient time to perform the critical and most impactful tasks of their job.

When I asked Harter when the Great Resignation might end, he said that unless a recession suddenly appears, economists don’t see things changing in the near term. “People see this moment as an opportunity to choose what they want from work and are taking advantage of it,” he says. But workplace leaders can truly stem the tide here by intentionally and consistently caring more about the happiness and well-being of their people. When an employee has low engagement at work, Gallup has found they’ll jump at just about any job offer that pays them more money. “But when people feel engaged and supported, they’ll need about a 20% increase in pay to motivate them to leave.”

Mark C. Crowley is a bestselling author and a global speaker on employee engagement.