The Great Resignation – Rethinking culture and leadership
Updated: Nov 2, 2021
Written by Alexander Bucevschi, October 2021
“The Great Resignation”[i], Following COVID lockdowns, hybrid working environments, mass layoffs[ii] and government benefit packages across several countries, especially Israel and the EU, has led the entire job market into turmoil. While high turnover used to be common in high-demand low-availability tech sectors, people are leaving jobs across industries:hospitality, logistics, transportation, etc (Figure 1). Paradoxically, despite the high unemployment rates throughout the world – we are in an employee’s market[iii]. Organizations are scrambling[iv] to handle the turnover crisis and its costs. However, the response to this challenge might be making things worse[v]. This paper explores the root cause for the job market failure and offers an alternative based on organizational climate and culture.
Figure 1. What is the Looming Crisis? From COVID to the Great Resignation
The instrumental approach
As organizations attempt to manage “The Great Resignation” aftermath they seem to adhere to a certain kind of logic, one based on instrumental relationships.
1. Instrumentality – The Retention Arms Race
The pandemic and ensuing financial consequences have led most businesses to engage in higher instrumental relationships with their employees. On the one hand, sectors negatively affected had to lay off employees despite narratives of “family”[i] and engaged cultures. On the other hand, companies which saw large-scale growth (particularly in the health and tech sectors), have quickly led to employee burnout[ii]. While these two reactions seem different, in fact they have the same consequence: treating employees as resources, expendable or critical depending on the company's needs. Layoffs and high intensity burnout both lead to heightened instrumental relationships from both employers and employees. And so, we find that the majority of retention solutions proposed by organizations focus on benefit packages or higher salaries. Sadly, this approach yields the opposite effect[iii] with a byproduct of a zero-sum game and an elevation in costs that some firms find hard to overcome.
2. Shifting Power structure
The shift to a more instrumental based relationships between organizations and employees led employees to be more rational, guided by cost-benefit calculations. In a climate of low trust exacerbated by the pandemic[iv] employees are likely to be less willing to trust their employers and perceive them as having their best interests at heart (understandable following layoffs and burnout). Employers often feel betrayed and offended by their departing employees leading to a vicious cycle: a growing mistrust between organizations and employees (anyone curious should turn to the recent Reddit channel r/antiwork[v] to see evidence of employee dissatisfaction with close to a million participants).
Blame games or power struggles between employees and managers show signs of a growing disconnect. In a recent McKinsey & Company report[vi] suggests managers are generally wrong when estimating what employee’s value most (see Figure 2). Managers and organizations seem to be unable to change their attitude, preserving irrelevant paradigms, making poor sense of the power shift in the relationship between organization and employee and rely on what worked in the past even when it does not.
Looking at the process of hyper instrumentation of the job market unfold, it seems a different approach might be warranted. Organizations need to pivot away from the disappointment inherent in the Great Resignation, learn and explore what members really want and need, accept the shift in power and adapt through changes in their organizational climate and culture. Only by embracing a culture of partnership can the instrumental arms race be disarmed.
Figure 2. adopted from McKinsey & Company – The Managerial Disconnect
Creating a climate and culture of partnership
So how should you, a manager, or HR leader create a climate and culture of partnership? What does it even mean? Long term – it means engaging in activities that redefine your organizational culture: changing behaviors, activities and core values within your organization that will facilitate a sense of partnership between members of the organization. Such a culture requires capturing employees' social and value laden needs, avoiding blame games and being vulnerable. It also means avoiding instrumentality traps, preferring the emotional side of partnerships. Remember, leaving your workplace is first and foremost an emotional choice.
For managers this might mean adopting new leadership styles (such as “servant leadership”[i] approaches) and new well-being approaches, as well as building their skill set to manage different sets of needs simultaneously. But most crucially – these changes must be authentic thus created and supported by organizational climate and culture.
Every change must start somewhere and, as leaders shape and transform the organization they are members of, here are five points leaders need to implement to facilitate the culture of partnership in their domains.
1. Own the challenge, don't hang it on your team
Recent studies suggest that employees simply want organizations to be fair, and to take care of their needs[ii]. Toxic leaders, burnout and “token” symbols cannot work anymore. Moreover, blaming employees for the decision to leave a “great working place” might signal that it was in fact the right choice. Instead, as a leader, ask yourself if you are really taking ownership of your team's working conditions. Are you thinking short term and trying to get the most out of your team members or are you looking for their wellbeing in the long run. Radically cutting workloads, working hard at creating a sense of belonging, and allowing employees a feeling of shared ownership [iii] is key to creating a sense of partnership. Ask yourself:
Do you consider your team members partners?
To you talk and listen to your team members? do you feel you understand what really bothers them?
Do you feel they trust you enough to reveal core issues?
Are you willing to change and heed to their needs?
2. Be vulnerable and authentic
Authenticity is a crucial element in the changing practices between employers and employees. As a recent study by Explorance[iv] has shown, employees are often disappointed that when they try to suggest changes in the organization, these are often ignored. This is an example of how employers are not allowing themselves to be criticized and improve themselves thanks to their employees. And even if you do respond, are you authentic in you implementation of changes or just making empty promises? Did you promise to maintain work-life balance? Great, then don’t call your employees at 9pm. Ask yourself:
Are you allowing yourself to be vulnerable to criticism?
Are you making authentic promises and then walking the talk?
3. Grow a healthy workplace
There is no doubt that one of the core outcomes of the COVID pandemic and consequent response is a lack in critical issues affecting employees. Loneliness and a need for social connections in a safe environment remain necessary even as lockdowns are a thing of the past. Remote work still has its challenges [v] and it is likely that newer employees are being left behind while companies focus on retaining older talents and trusted workers. Creating a healthy workplace means going beyond work-life balance and understanding in-depth the individual and cross organizational needs of your employees and providing for them creatively: psychological safety, physical fitness, assisting employees in financial fitness and most importantly maintaining a healthy work culture[vi]. Keeping healthy boundaries in hybrid work, while continuously fostering strong relationships is a key part of keeping employees feel part of something greater. Ask yourself:
How healthy is the workstyle in your team or organization? What is harming healthy living (going beyond the corporate responsibility – such as traffic, living conditions etc.)
What are you doing to support employees' mental, financial, and physical health?
4. Recognize differential needs and stay flexible
While the engagement and learning race has been going on for some time now and will continue to grow as a challenge in the future [vii], understanding individual motivators in regards to work has never been so important. This is a tricky thing to do because the pandemic really has shaken people up – and some employees might really want to shift careers as they have discovered other interests. While some employees might tend towards all or nothing thinking (as well as employers), finding flexible working engagements with lower working hours, part time, and project oriented work, might be the way to go as a recent Deloitte study found[viii]. Staying flexible and allowing your employees to find out what it is they want (without trying to control their decision making) can actually keep them engaged and supportive of you as an employer. For managers, this requires applying different leadership styles: from charismatic to transformative. This is part of being a partner in the employees’ journey through life – a partnership of co creation and discovery of their interests for their own well-being, and not only your own[ix]. Ask yourself:
Do employees discovering new interests threaten you? How do you react when it happens?
Are you seeking to create a mutual gain, flexible model to maintain relationships with employees as motivations and engagement factors change?
Are your managers able to bring forth different leadership styles and engage with different follower types (e.g. bringing charisma to motivate younger employees, while adopting a transformative approach with more experienced team members)?
5. Engage in Shared Leadership rather than Top-down Instrumentality
Finally, a major step in adapting to the current power balance is changing leadership practices. Functional and instrumental leadership has never been a positive force, but in many contexts it might have been enough to get the job done[x]. Leaders still need to deliver, but the old leadership skills are not cutting it anymore. Transformative and servant leadership are growing in importance, particularly with the recent discovery of humility as a key component of effective leadership[xi]. Being a leader focused on enabling your employees to be their best, is much harder to do than demanding that employees do their best for you but is also more effective and retains them for longer periods.
Leaders need to internalize that its not about delivery or people, it is delivery through and thanks to people. Leaders need to adopt a view of their team members as equals, co-creating and facing challenges together. Ask yourself:
Do you motivate your employees with humility?
Are you supporting your managers with the right tools, skills and training to become servant leaders?
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