December 2021 | 

Slowing the Great Resignation: Management for Retention

Slowing the Great Resignation: Management for Retention

It’s more than a now-common headline — the Great Resignation is real. Workers are leaving their jobs at record pace, leaving employers scrambling to keep their doors open and burning out those who remain. From hourly wage earners to knowledge workers, it cuts across industries and creates similar issues for leaders of tech companies and grocery store chains, advertising agencies and restaurants. We asked Wharton leadership experts for their best advice on how to put the brakes on mass attrition.

It Isn’t (All) About the Money

“When people have more options, some of the offensive ways that they can be managed will drive them away,” says Wharton management professor Matthew Bidwell. “We tend to think that wages play a part in retention, but it’s not as big a part as you might expect.”

Bidwell, a leading expert in human resource management and co-director of People Analytics: HR Transformation through Data, says the number of people leaving their jobs is the highest we’ve seen in at least 20 years — and it’s a situation we could have seen coming. “Most of the increase in attrition is hourly, lower-paid workers. A lot of those jobs have never been that good. Today it’s easier to get one because lower-paid workers are in more demand than ever before, so why wouldn't they quit to find something better?”

Add to high demand a power shift over the past few years that was supercharged by the pandemic. “The Walmarts and McDonald's of the world were already starting to offer significantly higher wages before the pandemic,” explains Bidwell. “I think there was already a sense that what had been a buyer's market for lower-paid workers was a buyer's market no longer. It was a sign of a gradual and much needed shift towards slightly more bargaining power at the lowest-paid end of the labor market.”

But higher wages weren’t enough to make many hourly positions appealing. “It's been surprisingly hard for the workforce to get it through management's head that they deserve to be treated better. When you see your workforce as a commodity, you manage them for your convenience rather than theirs,” says Bidwell. “Scheduling them to work tiny shifts to serve a peak period may work for management, but it doesn't work for employees. Add to schedule uncertainty the health and safety issues during COVID and you get a better picture of how workers have not been managed with a lot of care.”

Managing for Retention

Bidwell says getting hourly workers to stay means listening and figuring out what's really upsetting them. “What are the things that they need from you, and how can you provide some of it at a reasonable cost? Often, that means giving them some autonomy, treating them with dignity and respect, maintaining a safe workplace, and providing reasonable goals that don’t lead to burnout. As people have more options, those sorts of things really matter.”

The other part of the problem, he notes, is the incentives set for supervisors. “If we set a lot of short-term goals around staffing and productivity, we often force managers to treat people badly in ways that then contribute to attrition and loss of productivity further down the line. So, better incentives have to be a part of the solution,” says Bidwell. It’s a subject he examines in depth with participants of a number of programs, including Business Essentials for Executives.

See the Real Picture

Leaders who are serious about solving the attrition problem must also look beyond the workplace, says management professor Maurice Schweitzer. Yes, you can (and should) offer higher pay, better schedules, and safer work environments. But understanding why it’s been so hard for workers to get their message “through management’s head,” as Bidwell described, is also an important step toward improving retention. Powerful cognitive biases can get in the way of seeing and addressing the real reasons you’re losing workers.

As director of the Effective Decision Making: Thinking Critically and Rationally program, Schweitzer helps participants uncover and address the biases that cloud judgment and interfere with critical thinking. “A baseline challenge is that we all suffer from some degree of myopia,” he says. “It’s hard to take others’ perspectives and think beyond our own needs. Now, though, we have a second challenge: when things are not going well for us, it becomes particularly hard to think about other people. In times of difficulty, our focus is on our own short-term interests.”

What happens when leaders fail to take biases like myopia into account? One result is that they overlook the tremendous stress and changed circumstances faced by their workforce. With worldwide COVID-19 deaths exceeding five million, managers must expect that their employees have dealt directly with illness and death and/or have been living with a constant, higher-than-normal level of stress. Schweitzer says rebuilding a sense of loyalty and community in the workplace requires an acknowledgment of this fact.

“You can’t separate what is happening at home from what is happening at work. It was true before, but it is particularly important now,” he says. That includes not only psychological distress, but often additional care of parents and children. Managers need to acknowledge these changed circumstances as they impact what people can take on in terms of extra assignments and travel.

Acknowledge Changed Priorities

Another, more positive, result of the pandemic is a “seize the moment” mentality that arose from reflection on what really matters. Less time spent commuting and traveling for business, and daily reminders of the fragility of life, have caused a reconsideration of priorities. That needs to be acknowledged as well: retaining workers who have a deeper appreciation for life lived outside the office need good reasons to keep coming back — and that means going well beyond team Zoom events.

“It’s more important now in such a competitive environment that work be meaningful and rewarding,” Schweitzer explains. Echoing a new survey of knowledge workers, business leaders, and HR leaders — half of whom said they would leave their jobs if their company didn’t align with their values — he adds, “I have thought for a long time that workers need to feel they are doing meaningful work and that the companies they work for are good. That’s consistent with rising corporate activism, as companies like Apple and Dick’s Sporting Goods weigh in and take a stand on social and political issues. Starbucks is another example: their commitment to hire refugees is consistent with people wanting to feel that their employer shares their values.”

Schweitzer says managers must also recognize that another reason their employees kept coming to work was relationships. “Now that we’re not catching up in the break room or going out to lunch or for a drink after work, it’s harder to build a sense of community. Leaders have to work harder to create it when people are not physically interacting. That’s going to take work. We have to think beyond virtual happy hours to build and strengthen relationships.”