They call it the “Great Resignation,” but the numbers speak for themselves: 4.3 million people quit their jobs in January, according to the US Department of Labor's JOLTS report, with 11.3 million jobs going unfilled. In 2019, employee turnover reportedly cost businesses over $600 billion in 2018, according to the Work Institute Retention Report. And the trends aren’t slowing: the same survey found that one in three workers will quit in 2023, potentially costing you and your company millions more.
Data, such as that found in Gallup’s 2021 State of the Workplace Survey, illustrate that this is more than a salary problem and more than a problem with specific roles. In fact, it cuts across multiple fields and industries. As an HR professional, naturally you’re concerned. Your goals are recruitment, productivity, and retention. In the old days, an attractive salary and good benefits were enough to do the trick. A little later on, perks like games, free snacks and drinks, or gym memberships were often enough to accomplish all three. As HR, in order to attract, maintain and motivate workers, it’s your role to ensure that employees feel a sense of meaning and shared values. Here are three areas to examine:
Surveys show the highest quit rate by far is among workers who don’t feel engaged with their jobs. In fact, Gallup found that low-engagement teams typically endure turnover rates that are 18 percent to 43 percent higher than highly engaged teams. Furthermore, it takes more than a 20 percent pay raise to lure most employees away from a manager who engages them. If an employee is disengaged, it takes next to nothing to make them jump ship.
According to the Work Institute survey, 12 out of 100 workers quit for work-life balance issues. It was the second-most cited category in 2019, and it’s a category that has shot up 20 percent since 2013. This is about more than more paid time off or flexible scheduling, or -- especially in the wake of the pandemic -- remote work. Another Gallup report found that employees across various industries who worked remotely 60 to 80 percent of their time had the highest rates of engagement and productivity. This is about more than scheduling. When employees have positive feelings about their workplace, this gives them the time and space to focus on their personal lives.
It’s not all about the salary. Big companies can always outbid each other on salary, but the most successful ones will offer incentives beyond dollars and cents. A McKinsey survey found that companies can achieve a 55 percent improvement in engagement by offering social recognition, which can be as simple as a public thank-you. Employers can offer benefits for candidate referrals or points programs that employees can redeem for travel perks or gift cards. Profit-sharing, including equity plans, are another important way to allow employees to share in the company’s success. In the past, employees often saw equity plans as a gamble — what if the company doesn’t succeed? Newer and more effective stock compensation plans like Upstock offer equity through restricted stock units. These use a quick, low-cost infrastructure and defer compensation so that workers receive their stock once certain milestones are met. So workers don’t have to pay taxes on them out of their own pockets. As HR, it’s important to ensure your equity plan is easy, affordable, and less risky. Furthermore, equity encourages a “founder mindset” in employees and creates confidence that the company shares the same goals and concerns they do. When you win, your employees win. And in HR, that’s your goal.
To learn more about restricted stock units and why you may want them at your company, check out our article: Restricted Stock Units (RSUs) are the best worker equity.