The Real Culprit That’s Driving the Great Resignation

You’ve probably overheard the mutterings at supermarkets, coffee shops and restaurants: “They really need to find workers.” “Why does everything have to take so long?” “People are just greedy and don’t want to work.” Of course, such attitudes on the behalf of customers and clients are in part fueling what we’ve been calling the Great Resignation. But researchers at MIT have found what they say are the overriding factor in people fleeing their jobs.

Donald Sull, Charles Sull and Ben Zweig have scoured through the data of 34 million online employee profiles from several months last year to get a handle on employee attrition rates. They focused on the “Culture 500,” a roster of large organizations, mostly companies, that employ about 25 percent of private-sector workers across the U.S.

Ascertaining the true reason for a person’s reason to quit a company is difficult to gauge, starting with the fact that what an employee documents during the exit interview versus what they say publicly online or in confidence to friends and family could be entirely different. Nevertheless, the authors of this study say they were able to measure the drivers that have pushed employees to search for what they believe are greener pastures.

So, what is the top predictor of attrition during the Great Resignation by far? A toxic corporate culture is what drove many employees to the breaking point, at a rate three times or even more than other factors such as fears about job security, a highly innovative culture, the failure to recognize an employee’s job performance and a bad response to the COVID-19 pandemic. “Our analysis found that the leading elements contributing to toxic cultures include failure to promote diversity, equity, and inclusion; workers feeling disrespected; and unethical behavior,” the authors said.

But what about that one factor in particular, a highly innovative culture? True, employees love to talk about innovation – it has reached the point that the very word “innovation” has become a buzzword to a level at which it has lost any meaning. Yet a highly innovative environment also means longer work hours, more stress and a more frantic pace, noted the MIT study. At a time when people frequently had to balance kids, parents and home in an oft-isolated world, it’s no wonder many talented employees sought a different change of pace.

One caveat this study has found that companies with the reputation of having a healthier work culture than their peers were able to sustain though the pandemic with low attrition rates. The MIT authors named Southwest Airlines, Johnson & Johnson, Enterprise Rent-A-Car and LinkedIn as companies that experienced low employee turnover rates last year even while the Great Resignation gained momentum.

Nevertheless, many industries witnessed employees leaving in droves. It’s no surprise that the clothing retail and fast food industries ranked as one and five in the industries experiencing the overall highest rates of attrition. But wedged between those two sectors were management consulting, internet and enterprise software companies, suggesting that the Great Resignation boasts the ranks of hourly wage- and high salaried workers alike.

So at a high level, what do employees want, or what can employees to avoid having to post yet another job opening on Indeed or LinkedIn? Based on all those millions of profiles, this MIT crew suggest taking these four steps as a start: offering lateral career opportunities; ensuring remote work is still an option; company-sponsored social events; and in case the retail and food service industries haven’t noticed, more predictable work schedules.

“More fundamentally, we found that corporate culture is more important than burnout or compensation in predicting which companies lost employees at a higher rate than their industries as a whole,” concluded this study’s authors. “A toxic corporate culture is the single best predictor of which companies suffered from high attrition in the first six months of the Great Resignation.”

Image credit: Jackson Simmer via Unsplash