As published on Medium.com
How employees are test driving businesses then leaving them on the lot
What do established businesses and new cars have in common? Certainly not the smell and not nearly the size or horsepower. However, dangerous trends are emerging when it comes to consumers testing out what an upgrade feels like. Translated for businesses, new hires are becoming a costly threat.
According to a recent article, “quick quitting” is becoming a major headwind for businesses. According to LinkedIn, America’s “short tenure rate” is up significantly — as much as 10 percent in March — since 2021.
So why the high turnover?
For starters, there are nearly 11 million open jobs and just 6.1 million Americans looking for work. That’s over 1.8 open jobs per prospective worker. With this much opportunity, workers can “job hop” with a reliable safety net. Most can bank on equal or greater opportunities being out there for them if they become dissatisfied with their current situation.
And the math makes sense. In any economy, these numbers favor workers and provide ample opportunity for jobseekers to find employment. But “quick quitting” is a new trend, at least en masse. So, what gives? Why is it so hard for companies to retain employees?
COVID-19 shattered many norms, but possibly the most significant and lasting changes occurred within the workforce. Hybrid and work-from-home models are now mainstream. Side hustles and the multiple income streams mentality have replaced the “company man” mindset — increased flexibility leads to increased time and opportunity. Access to free education, skills acquisition, and other information is more accessible than ever before.
In short, jobseekers are more qualified than they’ve ever been, and they’re willing to wait to find job opportunities that offer the flexibility, opportunities for advancement, and compensation they’ve grown to expect. Unfortunately, this waiting process increasingly involves accepting a job and walking away if expectations aren’t met. Employees don’t accept “dues paying” years anymore. The opportunity cost in this job market simply is too high.
Unfortunately, we know such poor retention numbers are not sustainable — recent data suggests that replacing an employee costs 6 to 9 months of that employee’s salary. However, the onus is on companies to change how they operate, not on workers to change behaviors. As we’ve seen, workers have every reason to spurn the more traditional model in favor of businesses that meet their expectations, not the other way around. The power dynamic has shifted.
For years, employees have been made to feel lucky to be hired and told they must “pay their dues” before climbing the ladder. Additionally, they were promised the best training and opportunities for advancement. Instead, this translated to piles of grunt work and long hours around “more qualified supervisors” — the assumption being that some sort of knowledge osmosis would occur amid the busy work and sink-or-swim atmosphere. For new employees, witnessing “how it’s done” looked more like exploitation and false promises designed to sustain a strong base for the company pyramid. Burnout rates prove it.
New strategies look much different; employees have the power now. They expect training promised to be training delivered. They expect opportunities for advancement to involve participation in new projects and diverse, company-wide exposure, not working tirelessly for years until some unspoken benchmark is met, and they miraculously become eligible for a title change. They expect good work to be acknowledged and rewarded. They aren’t willing to wait around if they believe their contributions deserve more than they currently receive. They believe in finish lines, not starting lines. Tasks complete are tasks complete, and there are multiple paths to accomplishing a goal. Flexibility and work-life balance are essential.
For companies, the central focus of employee retention is now about delivering on promises. Worn out phrases in job postings such as “competitive salary,” “best in class training,” “opportunity for advancement,” “flexible hours,” or “work-life balance” must be delivered upon and communicated authentically. To accomplish this, companies should prioritize employee recognition. Supervisors must recognize high-performing individuals and teams and create the internal incentives necessary to keep them happy.
In this new business climate, loyalty is achieved by establishing work environments supportive of individual development and success. Managers must continue to ask themselves, “How can I better empower my team?” Approached correctly, this will lead to a more efficient, self-sustaining workforce that requires less traditional oversight long term. Short term, labor costs will plummet.
