Many workers have quit their jobs at a record pace in the past months. In the US alone, more than 20 million since April 2021. There, they call it the “Great Attrition”. But the phenomenon is global and is disrupting businesses almost everywhere, including Portugal.
Companies are struggling to address the problem. Many don’t even understand why their employees are leaving in the first place. Rather than investigating the causes, many are jumping to quick solutions. For example, they offer financial compensation. But, if the only response to attrition is to raise salaries, the very best people will always have a better offer somewhere else. Rather than sensing appreciation, employees sense a transaction. They feel their real needs are not being met. By not understanding what their employees are running away from, company leaders are putting their businesses at risk.
After two years of pandemic, employees are tired. They crave the human aspects of work: interpersonal connections with their colleagues and managers. They want a renewed sense of purpose in their work. More than cash, they want to feel valued by their organizations and managers.
A recent study by McKinsey on the Great Resignation in the US and other countries shows that the top factors employees cited as reasons for quitting are that employees didn’t feel valued by their organizations and their managers, and that they didn’t feel a sense of belonging at work. Thus, many senior executives will have to rethink how they lead. They will have to develop a much deeper empathy for what employees are going through and to pair it with compassion and determination to change. Executives who don’t make their people feel valued may be driving them away from their companies.
And don’t think that employee attrition is subsiding. The McKinsey survey indicates that 40% of the employees are likely to quit in the next three to six months, while 64% of the employers expect the problem to continue over the next six months. Attrition could also get worse because employees are willing to quit even if they do not have a new job. Among the employees in the survey, 36% who had quit in the past six months did so without having a new job in hand.
There is yet another reason for continued attrition given that even satisfied employees may be at risk of quitting. With more companies offering remote work choices, these employees could change their intentions. Among employees who said they were not likely to quit, 65% reported that a primary reason to stay in their job was that they wanted to stay in the city where they live. Yet, among survey respondents who took new jobs in new cities during the past six months, almost 90 percent did not have to relocate because so many more companies are allowing remote work. Thus, having more “location agnostic” positions to choose from could prompt otherwise satisfied employees to start changing their commitment to the companies where they now work, particularly if executives in these companies mishandle the transition to a hybrid-work environment or fail to offer one at all.
Remote work is no panacea, but neither is a full on-site return. In-person connectivity continues to have many benefits for organizations. A study carried out by the real estate consultancy Savills in European countries shows that the traditional workspace is indeed considered very important. In Portugal, 87% of respondents indicate that keeping company's office space is necessary for the proper functioning of the organization. However, companies also recognize the benefits of working from home or the advantages of adopting a hybrid model. The Savils survey indicates that 53% of the Portuguese would like to work from home one or two days a week, whereas 4% indicate that they would like to work full time at home.
As the demand for flexible solutions increases, more companies are adopting new hybrid-work approaches. A study by the consulting company Mercer in Portugal reveals that 75% of the companies plan to implement a hybrid model, and 33% want to provide full-time remote work. And flexibility will be provided not only in space, but also in time. The study shows that 71% of companies plan to offer flexible hours, with 30% opting to offer reduced or part-time hours and 21% will allow the possibility of customizing timetables or having shifts.
In turn, the need for work flexibility is impacting the workspaces themselves, making them more efficient and collaborative. The study indicates that 46% of organizations intend to carry out transformations during the next five years, such as the reduction in the number of spaces, buildings, and individual offices, or the move to open offices and hot desking.
Another study by Hays, the HR consultancy, reveals that workers have a greater interest in “working from anywhere”, rather than simply doing it from home or the office. Thus, policies for attracting and retaining talent should include a hybrid work model, offering greater flexibility for workers. As Alistair Cox, Hays CEO, points out: “Remote working is here to stay and will accelerate as companies become more comfortable with hiring people anywhere in the country (or in the world) and their structures and technology allow it. The potential for accessing global talent pools is enormous.”
Both employers and employees will have to adapt to the long-term implications of structural changes driven by Covid-19. "The Great Resignation" will continue and may get worse before it gets better. Yet the threat also represents a big opportunity. To seize it, companies must take a step back, listen, learn, and make the changes that employees want—starting with the relational aspects of work as well as flexible and hybrid work models. By seizing this opportunity, companies could gain an edge in the race to attract, develop, and retain the talent they need to create a prosperous post-pandemic organization.
This article was originally published in Jornal de Negócios in 19.01.2022
