How can leadership training create strategic advantage in the face of the Great Resignation?
The Retention Challenge
While the rate at which employees are leaving their jobs is beginning to wane somewhat in 2022, there’s no question what we’ve seen is a readjustment of the workforce of historic proportion: the U.S. Bureau of Labor Statistics reported that more than 3.98 million workers quit their jobs each month in 2021. (The attrition was not equal across industries, either: in early 2020, departures in financial services increased by 5% while the rate of workers quitting manufacturing jobs spiked by 78%.) Source: SHRM
As this trend continues to drive employee turnover, as recruitment continues to be competitive, and as both create additional cost and risk for businesses, organizations must look at how their decisions to structure the workplace will affect their ability to retain and attract workers.
One of the key structural decisions that continues to cause disruption in workplaces is whether or not pandemic-driven remote work policies will be continued, modified or rescinded entirely.
The Remote vs. Return Debate
Reverting to a fully in-person workplace: Just 3% of white-collar workers want to return to the office full-time (according to survey results published by Fortune), and more than half of respondents in multiple surveys have shown workers will consider leaving their company if forced into full-time in-person workplaces, and many speculate this is a foundational, long-term shift in worker expectations.
Switching to a fully remote workplace: Globally, about 16% of companies are fully remote, and those who have embraced a fully remote workforce are both setting expectations among workers about what the workplace experience should and shouldn’t entail (flexibility, autonomy; savings of cost and time associated with the elimination of the daily commute; lifestyle flexibility to keep their job if they want to relocate to a different city, state or even country).
Supporting a hybrid workforce: This is the model most workers say they want — not to be fully remote full-time, but a position that gives them the flexibility to work remotely when and how they need. The statistics are compelling — in a global survey conducted by Slack, 78% of respondents said they wanted workplace location flexibility, and 95% said they wanted schedule flexibility.
Even if your company is not considering a fully remote workforce, what these companies have learned — in many cases through their own experience — about how to support remote workers, and the implications of remote work to company culture, are a valuable reference to any organization. Zapier, the tech integration and automation software-as-a-service company, has been a fully remote organization since their inception, and their CEO, Wade Foster, has been a regular voice of guidance, sharing Zapier’s learnings on remote workplaces in their “ultimate guide to remote work.”
Building a Company Culture that Meets Workforce Needs
Putting aside the questions about workplace location for a moment, it’s important to consider how your organization is addressing what your workers feel is important — the actual drivers of their job and workplace satisfaction. These are the same factors which will make your organization attractive to new employees, especially in a competitive hiring market, and so they’re worth your time and attention.
Why do people leave a job? A Pew Research Center report found ten major and minor reasons. Perhaps unsurprisingly, dissatisfaction with pay was the top major reason (shown in blue in the graph below). While opportunities for advancement overall equaled pay dissatisfaction (blue and green lines), the second major reason for dissatisfaction was that people felt disrespected at work.
So, in response to these data, what can your organization do to make your workforce feel respected so they want to stay?
Psychological Safety in the Workplace
Workers resoundingly express dissatisfaction with a workplace culture where their voices aren’t heard, blame-placing is rampant, or any one of many toxic elements in an organization’s culture may exist. What they are really talking about is a lack of psychological safety.
First coined by Amy Edmondson in a 1999 journal exploring its relationship to team learning and performance, psychological safety is the ability to speak one’s mind without fear of punishment or embarrassment. At the heart of a psychologically safe environment is a sense of belonging with or being accepted by others. Feeling accepted reduces anxiety associated with interpersonal risk, allowing learning to occur. Learning improves the quality and frequency of contributions, and ultimately leads workers to identify and own productivity and efficiency improvements.
To really understand what psychological safety is also requires a knowledge of what it is not. According to Tim Clark, Ph.D., “Psychological safety is not a shield from accountability. It’s not niceness, coddling, consensus decision making, unearned autonomy, political correctness, or rhetorical reassurance.”
Looking again at the issue of working remotely, surveys also show that worker apprehension and anxiety about their working location and conditions are improved dramatically when their organizational leaders and managers are clear and transparent about the decision-making process, especially when employees are given a voice in the process. Being inclusive creates a sense of belonging.
During the first year of the COVID-19 pandemic period, there was a profound and rapid shift to fully remote working environments. Early concerns that worker productivity would fall off proved largely unfounded, as productivity (and in many cases, profitability) emerged from pandemic lockdowns stronger than expected. It also had an unexpected benefit of leveling the playing field and creating a sense of belonging – everyone was working from their dining room table – and everyone was in it together.
However, as executive leaders emerge from their COVID bubbles, many seek to recreate pre-COVID environments. Especially as leaders apply pressure to have the workforce return to an office, many workers bristle at the implication they can’t be trusted to perform while working remotely. Pressure to return to the office, then, is not just felt as a challenge to the worker’s place of work, it is a challenge to their efficacy. Intentionally or not, a return-to-office mandate often implies that remote staff aren’t doing their jobs — which seriously damages trust. Trust is required for learning and learning is required for valuable contributions and improvements.
While the specific drivers of employee satisfaction vary by the individual, organizations have an opportunity to employ systemic solutions, such as leader development for all levels of their organization, that will enhance and re-form company culture in ways that meaningfully address the emotionally substantive drivers of psychological safety. In the current business environment, a strengthened and attractive company culture is an essential tool to improve your organization’s competitiveness in a tight labor market and reduce the cost and risk associated with employee attrition.
Systemic leader development focusing on consultative and supportive leadership techniques, for staff at all levels, can be a foundation for your organization’s future culture, where a positive and inclusive team climate becomes an important competitive asset.
Want to learn more? Contact us to learn how AXIOM’s team can help you develop and deliver leadership development and culture change at your organization.
This article was written by AXIOM’s Scott Rutherford (Vice President, Marketing) and Susan Franzen (Vice President, Strategy and Leadership).