There have been endless think pieces written in the past few months about what exactly is driving the so-called Great Resignation. Is it people leaving to start their own independent thing? Is it fed-up low-wage workers using a tiny bit of new leverage to demand less awful treatment? Or is it more about professionals who can afford to be choosy searching for jobs that better align with their values and aspirations?
There are certainly plenty of individual cases in which each of these scenarios apply, but if you want a less anecdotal and more data-driven explanation of the Great Resignation I suggest a recent MIT Sloan Management Review article by Donald Sull, Charles Sull, and Ben Zweig, who are an MIT professor, a founder, and a CEO, respectively.
The Great Resignation isn't mainly about pay
Together the authors recently conducted a massive analysis of both workplace data from Revelio Labs (where Ben Zweig is CEO) and more than a million Glassdoor reviews. All this information allowed the team not only to see which companies have been struggling with higher rates of attrition during the Great Resignation than their industry averages, but also what employees were saying about those companies (via the Glassdoor reviews).
What were employees complaining about at companies that were losing the most workers during the current tsunami of resignations? It wasn't mainly pay.
"Much of the media discussion about the Great Resignation has focused on employee dissatisfaction with wages. How frequently and positively employees mentioned compensation, however, ranks 16th among all topics in terms of predicting employee turnover," the authors report.
Why employees actually leave
Instead, the biggest predictor of employee resignations was a toxic culture. But other unexpected factors also seemed important. Here are the top five predictors of high rates of attrition the research uncovered.
Toxic culture. "A toxic corporate culture is by far the strongest predictor of industry-adjusted attrition and is 10 times more important than compensation in predicting turnover," report the authors. What does toxic mean exactly? The authors explain the main elements include "failure to promote diversity, equity, and inclusion; workers feeling disrespected; and unethical behavior."
Job insecurity and reorganization. It's probably no shock that feeling like you could lose your job at any moment makes you start thinking about getting another job. "Previous research has found that employees' negative assessments of their company's future outlook is a strong predictor of attrition," the authors point out.
High levels of innovation. This one is less intuitive, but the authors found "that the more positively employees talked about innovation at their company, the more likely they were to quit." They suspect that's because innovation is hard -- and hard on workers. Innovation may be interesting and inspiring but it can also burn people out.
Failure to recognize performance. "Employees are more likely to leave companies that fail to distinguish between high performers and laggards when it comes to recognition and rewards," write the authors. This isn't about compensation. It's about feeling seen and valued when you do excellent work.
Poor response to Covid-19. Again no shocker here, but companies bungling their way through the pandemic get a stark reminder of the consequences of their incompetence in the article: "Employees who mentioned Covid-19 more frequently in their reviews or talked about their company's response to the pandemic in negative terms were more likely to quit."
The article goes into detail about the study methodology and also offers advice to bosses looking to head off resignations (offering career development, which other experts have also stressed, and more flexibility top the list), so check it out if you're interested in a fascinating deep dive on the subject.
But the headline takeaway is that most analyses of the Great Resignation are getting the most important drivers of the whole phenomenon wrong. No one likes to be underpaid. But it turns out people like disrespect and insecurity even less.