Thriving amidst the Great Resignation: Why Company-Culture is Vital for Improving Employee Retention
Regardless of what corner of the internet you inhabit, you must have come across the term ‘The Great Resignation’ in the past few months. If you happen to be an employer, maybe you felt the effects of the same yourself.
While the masses disagree on what to name this phenomenon, with descriptions ranging from being as dramatic as ‘The Exodus’ to a mere ‘Reshuffling,’ only a rare few organizations (and employees) understand the undercurrents fueling these shifts.
Despite all the debate and disagreements surrounding the topic, the one thing that cannot be denied is that resignations across the world are at an all-time high. Millions of people are reconsidering their jobs. And the point of contention isn’t if any of this is true or not; but rather the reason behind the resignations.
Amidst all the reshuffling, the chaos, and the confusion, it might be worth asking what this great resignation is all about. Why are employees quitting in droves, and how can businesses (especially software and app development companies) deal with this sudden imbalance in power?
What is The Great Resignation?
Let’s first talk numbers. In five months, from June to Oct last year, around 20 million people quit their jobs. And that’s just in the U.S.
This was enough to make media outlets proclaim that the great exodus was upon us. But simply assuming these numbers indicate a global crisis is somewhat unfounded. Sure, millions of workers are quitting their jobs, but that doesn’t necessarily imply that there isn’t anyone to fill these roles.
So let’s break down these figures.
Most of the resignations mentioned above come from two major categories in my opinion.
First are the sectors heavily hit by the pandemic, like healthcare. 1 out of 5 healthcare workers have left their jobs since the pandemic began, and that is reasonable since most of them must be burnt out by now. Therefore, it should not be a surprise if resignations within the healthcare sector inflate the overall statistics.
The second major group here is minimum or low-wage earners. This is another hard-hit group since your average minimum wage job doesn’t really offer the same flexibility or financial stability that most white-collar jobs enjoy. Low pay and risky working conditions coupled with pandemic-induced stress and anxiety are forcing many low-wage workers to skill up and look for better jobs since, for many, that’s the only way to survive.
The point is that certain groups are inflating the attrition rates. That is not to say that resignation rates haven’t risen above long-term averages, they certainly have. But when we look at the average resignation rate across all industries, the numbers might appear slightly larger, and the problem slightly worse than what it really is.
But Aren’t Software Developers Quitting in Big Numbers Too?
Yes and no. According to a LinkedIn Survey, the employee churn rate in IT was around 13% in 2018. That is higher than any other industry on average.
Gartner stated that around 31% of IT workers were actively seeking new jobs in 2021’s third quarter. That is more than double the rate from three years ago, which clearly implies that the resignation wave has hit the tech world as well.
Although, as morningstar and many others have pointed out, the use of the term ‘resignation’ is mostly a misnomer. Since workers aren’t entirely quitting the economy, but merely migrating towards better jobs.
Essentially, the IT world has enjoyed massive growth since the pandemic which has created enormous opportunities for workers. A booming industry along with a pandemic-induced shift in priorities has left countless workers considering a job hop.
One minor detail worth pointing out here is that despite the industry being rife with opportunities of all shapes and sizes, the playing field isn’t leveled. Entry and junior level devs do not have it as easy as mid or senior level developers. And that is because young talent often needs significantly more training and attention from organisations that hire them, something that becomes especially difficult to offer on a remote or hybrid work basis.
But apart from these minor differences, the overall general trend seems to indicate that employees are quitting in growing numbers which, inevitably, has created a worker shortage increasing available opportunities for everyone.
With job openings and attrition rates at an historic all time high, tech employees and software and app developers, both in the US and worldwide, seem to be on the receiving end of the deal here.
What is Driving The Great Resignation in Tech?
At first, it’s easier to assume that employees are on the lookout for jobs that offer greater growth and better pay. While that is true, it isn’t the complete picture.
The pandemic has significantly shifted employee priorities and expectations. As a result, we see Tech employees preferring certain jobs that offer specific perks and benefits over those that don’t.
Pay is no longer a top priority, at least not for senior employees who already enjoy decent pay; instead, other needs have taken the driving seat.
Now that developers and employees are open to a lot more options, they can prioritize jobs that offer certain benifts that weren't availabe before.
These trends aren’t something new, people have always preferred jobs that offer these, but the pandemic certainly accelerated their adoption. Now that the economy is recovering and demand for talent is at an all time high, employees find themselves with the power to negotiate for these terms.
What Can Companies Do to Retain Skilled Employees?
If you are on the employer side of the resignation wave, you might find yourself struggling to retain your most skilled employees. Understanding what employees want can help your organization retain existing staff and attract new talent.
Immediate Steps to Defend Against the Great Resignation
These are steps your organization needs to take immediately in the face of high attrition rates.
Assess the Damage
Step one for defending against employee churn is to gather enough data on the situation and your organization. HBR suggests a three-step data-driven approach of quantifying, identifying, and resolving the effects of the attrition crisis. They recommend you assess the severity of the situation and understand its root cause to address it better.
Assess the Impacts of Handing out Benefits
Organizations need to treat employees like customers. Once you know what is causing them to leave, it’s time to understand if it’s feasible to offer the benefits your employees want. Offering permanent remote work or reducing the amount of time employees need to be working may seem like radical ideas. Still, their implementation may not be as damaging to your company as you might have initially imagined. Take the time to consider the effects of handing over employee-preferred benefits, and try to judge if the advantages of doing so outweigh the costs.
Automate What is Possible
Most organizations fail to recognize that a significant chunk of their workflow can be automated using software. While investing in software tools may seem expensive, software is cheaper than people in the long run. Identifying what area of your workflow can be automated can help your organization save time and resources while allowing you to employ your workforce in more productive ways.
Repurpose Existing Talent
And finally, when in a crunch, repurposing and even promoting existing talent for better roles can be a great way to combat the challenges posed by the resignation wave in the short run. After all, these are employees who have decided to stick with you despite the options they might have; rewarding their choice to do so can be a great way to maximize employee retention and loyalty.
Steps to Boost Employee Retention in the Long Run
Employers therefore, will have to adapt to this change by upgrading their policies and work conditions if they wish to retain and attract talent. In a way, employees have collectively raised the standards for what is expected of their employers and software companies are left with no choice but to comply.
Below are a few steps your organization can take to better acquire and retain talent in the long run:
Adapt by Changing your Recruitment Style
The central driving force behind the great resignation is this idea that employees deserve better working conditions, sometimes even at the expense of common perks and benefits. Therefore, organizations need to clearly communicate that they value employee security and happiness in their recruitment calls themselves.
The balance of power has tipped on the other side, and companies need to adapt to this shift by changing their recruitment style. Gone are the days when lucrative salaries and corporate perks were the only key traits that made a job attractive. To stay competitive, companies now need to identify what their potential employees want and embody this change in their recruitment process.
Offer Long Term Growth Opportunities
A survey recently featured on Business Insider revealed that around 4 in 10 IT employees considered quitting their job over lack of career and growth opportunities. A GoodFirms research recognized a similar trend highlighting that
- 21.1% Employees were not satisfied with their salaries
- 25.9% Employees were not satisfied with their increment and promotion
- And 21.1% were not content with career development opportunities at their organization
The bottom line here is that these numbers indicate a clear trend that is all about employees being dissatisfied with the growth opportunities their companies offer.
But companies need not restructure entire hierarchies to meet this challenge; the solution can sometimes be very simple.
Growth opportunities need not always be institutional; they could be as simple as allowing employees to work on bigger projects and experimenting with newer technologies. It is less about big roles and titles and more about engendering a sense of challenge and learning within your workforce. The point here is that employers need to allow flexible job roles that encourage and support employee growth, both in terms of skills and position.
Build Culture and Connection
Employees at the end of the day, are people. And people need a sense of connection and belonging to be cooperative and productive. Organizations need to be conscious of this need and help foster connection and culture within their workforce.
Building connections, especially in times when the majority of the workforce is expected to work under a hybrid model, can be challenging to say the least. Managers and those higher up the chain of command need to recognize their role in cultivating a sense of connection among their team.
Organizing both virtual and social events and meetups can be a good strategy to mimic spontaneous cafeteria/water-cooler meetings. While adopting a top-down approach to taking care of employee needs and wellbeing can go a long way when cultivating company culture.
What is worth remembering is that employees need something more than just schedules and instructions; they also need connection and purpose, and being sensitive to these needs is a guaranteed way of attracting and retaining talent.
Initiating a Cultural Shift
I’ve written at length above about a shift in employee expectations and the need for organizations to adapt to this change. But here is something worth asking that is often missed while discussing issues like these:
What if the great resignation is a mere symptom of something much bigger?
By taking these practical steps, corporations can certainly cushion the damage, but they’d only be treating the symptom, not the cause. All across the world, workers have rallied for better pay and even more strongly for better work-life balance and safer work conditions.
What I’m trying to get at is that perhaps these demands themselves aren’t the cause but a mere by-product, a symptom, if you may, of a larger shift in the worker mindset that is taking over the economy.
And this isn’t mere speculation; as per Gartner, around 65% of workers are rethinking the place work holds in their lives. Come to think of it, these reconsiderations are obvious.
The pandemic gave people enough time to disconnect from their hectic lives and reevaluate (perhaps even discover) their priorities. Some managed to connect with their families like never before; others might have discovered a long-lost personal calling.
That is why there is no tried and tested strategy for times like these. Incentives like hybrid and flexible work schedules, and better pay are certainly good, but they’ll never be enough. And that is because when companies approach employee loyalty as yet another corporate challenge or task, they end up treating their employees as liabilities and not assets. We dehumanize our workers in trying to understand and ‘hack’ their psychology.
Going all-in with employing ‘retention tactics’ is thus counterproductive since it makes us act against the very values that employees find attractive.
The only real solution to this problem is a cultural shift from the very ground up that incentivizes an employee-friendly attitude within the organization.
How to Build a Better Culture Within your Organisation?
As a brilliant article from HBR pointed out, employee retention comes down to four key aspects: value, purpose, certainty, and belonging. They point out certain common remedies to attrition like offering growth opportunities and embracing flexibility, but also some radically uncommon advice like taking good care of your employees and even their families.
In the end, company culture is best reflected in company policies. Everything you believe in as an organization is best reflected in how you organize your people and resources.
Embracing a flexible work schedule isn’t just work policy; it’s an indicator that your organization cares about your employee’s work-life balance. Allowing employees to have a say in projects isn’t just a trivial choice but reflective of the fact that you trust your workforce.
The bottom line is that any major change to employee-facing policy needs to be inspired by a deeper shift in company culture rather than as a knee-jerk, panic-driven response to change in employee expectations.
GoodFirms Grab’ N’ Go Gist
The great resignation is here (in software as well as everywhere else), and if trendlines count as evidence, we can safely assume it is here to stay. For employees, it’s arguably the greatest opportunity of their careers; for employers, it’s nothing less than a full-fledged crisis. And the tension between the two is radically transforming what we think about the nature of work.
Rising employee expectations have led to a snowball effect. Essentially as more and more employers give into employee demands, this rise in expectations is further validated, encouraging more workers to expect the same. It’s a positive feedback loop that’ll perhaps only stop at a complete overhaul of our approach to work.
For now, employers seem to have got the shorter end of the deal here. Organizations need to accommodate changing employee needs if they wish to have any chance to retain staff in the long run. Speaking of fixing the issue in the long run, an industry-wide shift in corporate culture that is friendlier towards worker needs seems to be the only way out. And such a shift isn’t as big of a leap as what it may sound like; the employees have already got there; companies just need to catch up.
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