Why are all those people resigning — and where are they going?

We all know workers are fleeing their jobs, but exactly why are they leaving and where are they going anyway? Here are some answers.

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In 2021, the US Bureau of Labor Statistics reported that an average of over 3.98 million workers quit their jobs every month. Never before had so many Americans left work, and the numbers haven't improved any in 2022. Indeed, in the most recent reported month, February, almost 4.4 million more people joined the exodus from work.

In the words of David Allan Coe and Johnny Paycheck, more workers than ever are saying, "Take this job and shove it!"

We know why people leave work. While poor pay is an important reason, it's far from the only reason. According to the MIT Sloan Business Review, the biggest single predictor for companies losing workers by a big margin was a toxic work culture. How big? A toxic corporate culture is 10 times more important than compensation in predicting turnover. Other reasons that ranked higher than wages were job insecurity/reorganization; high levels of innovation; failure to recognize employee performance; and poor COVID-19 response.

What is a "toxic work culture?" People have been arguing over this ever since we had honest-to-goodness water coolers to have conversations around. But the authors of the MIT Sloan Business Review study took a more academic approach and analyzed 1.3 million Glassdoor reviews.

In the study, they found the “toxic five“ — workplaces that are disrespectful, non-inclusive, unethical, cutthroat, and abusive. If your employees feel like they're not being respected, you’ll lose them. The same is true if they're gay, a woman, black, too old, and they feel like they're getting the short end of the stick. A related problem is when  your people believe they need to be in a particular clique or be a boss's favorite to get ahead.

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There are other work killers. When your people believe you're lying to them whether it's about raises, promotions, or how their employees are like families, they will leave. Or, as someone once told me at a business I was happy to leave, "It was a family business, a very dysfunctional family business." If your people feel that they're fighting for a raise or the right to get a cup of coffee (as the classic dysfunctional workplace in Glengarry Glen Ross put it, "Coffee's for closers.") they will quit. Finally, yelling at your employees or talking down to them is a sure way to get them to walk out.

So, where do your ex-employees go when they leave? In the past, they went right back into the workplace. Not this time.

True story: yesterday I went out to get my haircut at my favorite barbershop. It was closed for the day. No one was available to work, so they shut their doors. This is not an isolated occurrence; it's become the new normal for many small businesses.

According to a new Adobe Document Cloud survey of managers and employees across large enterprises and small-to-medium businesses (SMBs), people are going back to work. They're just not going back to work for you. Specifically:

  • One in five (21%) enterprise managers applied for a new job, 26% received a new job offer, and 6% started a new job.
  • Slightly fewer enterprise employees (18%) applied for a new job, 17% received a new job offer, and 9% started a new job.
  • Those that left their job switched to a new industry (42%), started their own business (16%), or became a freelancer (10%).

That 25% leaving to set up their own business strikes me as significant. Based on everything I've seen, I believe most of those people are doing this so they can keep working from home and have more control over their time and work schedule. Adobe also found that two out of three SMB leaders say that now, more than ever, every minute counts for their success. Atthe same time, three out of five employees feel that pressure and want to have more control of their time. This leads to burnout and it's a real driver for people leaving. Anything you can do to relax that tension will improve your business's long-term health.

Another reason Adobe doesn't address involves Baby Boomers who are simply aging out of the workforce. Goldman Sachs estimated that more than half of those who left during the Great Resignation were over 55. They are not coming back. Not yet anyway. Another problem for another day is that generally speaking, Baby Boomers haven't saved anything like enough money for retirement. In the meantime, don't expect to see Michael and Mary — 1956's most popular names — coming back through the door.

So, what can you do to encourage people to stay? According to the Adobe survey, the reason people elect to continue with their current jobs are:

  • Proper company recognition.
  • Pay raises.
  • In-person and remote flexibility.
  • Improved listening.
  • Hours and schedule flexibility.

Personally, I'd put remote work and time flexibility higher. But, regardless of how you rank them, if you want to keep your people you need to face these issues. If you don't, well, it's been nice knowing your business. Best of luck with your next endeavor.

Copyright © 2022 IDG Communications, Inc.

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