Why is it that between 2020 and 2021 American businesses added an unprecedented 3.8 million jobs, but 2.2 million Americans left the labor force entirely? Massive employee turnover and a relentless struggle to fill positions and work crews has plagued our country over the past two years. The pandemic-era economic phenomenon known as the "Great Resignation", a wave of employees quitting their jobs for a myriad of reasons, has made a sizable impact on the economy. Unfortunately, it has also caused a mountain of headaches for business owners and managers. There are many effective ways to combat this trend, but first it is important to learn why so many workers decided to quit their jobs.
What Caused Worker Shortages?
As of November 2021, 53% of Americans who had quit or became unemployed during the COVID pandemic said that they were “only somewhat active, or not very active at all, in looking for work.” Also, nearly two-thirds (65%) of those who lost their jobs and were still unemployed did not believe that they would be employed full-time by the start of Q2 2022 (Ferguson, 2022).
Some key reasons for these sustained staff shortages are as follows:
- The need to stay at home to care for others.
- Health concerns and/or continuing concern about contracting COVID.
- Reliance upon unemployment benefits as a means of income.
- Belief that there is a lack of quality jobs available in their industries of interest.
- Dissatisfaction with job duties, management, work environment, and/or pay.
- Desire to change jobs or industries to try something new.
- Focus on acquiring more education and skills to re-enter job market.
I Hate My Job!
Of the reasons listed above, one of the most concerning causes for widespread job shortages is the growing sense of dissatisfaction among employees in their jobs. It is important look into psychological reasons for turnover, because they are an often-overlooked source of the problem of staff turnover. Unfortunately, a worker’s discontent can stem from a lack of resilience in the workplace. Workplace resilience is, simply put, when an employee experiences stability, security, and the confidence to successfully handle the challenges of a position. This includes interpersonal interactions, daily stresses, and organizational changes. When an individual lacks resilience, he or she is highly likely to quit.
Those who endured and were able to work through the tough times were able to realize that they could only control their own reactions to situations and could get past negativity and failure. An effective employer will do his or her best to support members of the company in any way they can to succeed. Here are some important practices that will proactively help build workplace resilience and protect against employee turnover and shortages.
8 Ways to Reduce Turnover and Avoid Staff Shortages:
1. Provide new hires with thorough onboarding, orientation, and training.
This includes proper introductions to key team members with whom they will be actively working. If your employees are properly prepared to fulfill their roles, they will hopefully develop the confidence needed to tackle problems on their own before asking for help. They also need to know that it is OK to ask questions without feeling like they are a nuisance or incapable of doing their job.
2. Acknowledge and celebrate individuals’ achievements and show genuine interest in their personal lives.
By celebrating milestones, successes, and engaging in workers’ lives in an authentic way, your staff will feel a sense that they are seen, heard, and valued. This will also help develop a sense of community and, in turn, strengthen the company as a whole.
3. Consider hiring within your organization before posting the job externally.
It has become insanely difficult for employers to find qualified candidates to fill open positions. Before searching outside of your organization, considering individuals’ potential for promotion within the company. You may be happily surprised to discover the next great department manager among your staff. Other reasons to hire within your company is that your employees are already familiar with the company culture and core values, and thus, require less time for onboarding and orientation. Finally, depending upon the type of
business, the practice of hiring in-house can be an extremely cost-effective practice.
4. Practice honest and positive communication with staff members.
Choose words carefully and practice kindness. Remember, that you have the power to deliver any type of message needed. It is HOW you deliver it that matters most. Also, maintain a positive, non-toxic working environment by rooting out and dealing with negative attitudes early on. Toxicity in the workplace can spread like wildfire!
5. Develop a solid company structure and communicate a clear vision for the company’s future.
Employees appreciate being in the loop regarding company setbacks, successes, and goals. By sharing your vision for the company, you are inviting them to be a part of a team and they will feel proud of being an important factor in its growth. It is also crucial to run your company in an organized fashion and make sure your staff understand and follow its organized structure.
6. Offer competitive pay and benefits.
Even among our youngest citizens entering the workforce at the age of sixteen, compensation matters and attracts candidates. Especially with today's widespread rising inflation and resultant increased prices of most products and services, your employees need to be able to earn a fair wage or salary.
7. Develop programs for wellness and social involvement.
Whether your employees like to catch a baseball game, go for mid-day walks, or happy hour, make sure to offer opportunities for colleagues to socialize outside of work. Also, contests, health incentives, and structured wellness programs communicate the importance of self-care and maintaining work-life balance.
8. Conduct timely and regular performance reviews.
Performance reviews serve as a crucial time to evaluate how your employees are progressing in their roles at your company. Conduct them at least every year (on time) and make sure to address the key areas of their growth and need for improvement. Also, make space for them to share their feelings about their own performance, goals, and any workplace concerns.
Effective leadership is paramount to the success of all businesses, and your staff are your most valuable assets. You have the capability to encourage workplace resilience, and in return, you will reap the benefit of employee retention and a stronger company.
- Ferguson, Stephanie. “Understanding America's Labor Shortage.” U.S. Chamber of Commerce, U.S. Chamber of Commerce, 3 June 2022, https://www.uschamber.com/workforce/understanding-americas-labor-shortage.
- Maddi, S., & Khoshaba, D. (2005). Resilience at work: How to succeed no matter what life throws at you. NewYork: American Management Association.
- “Resilience in the Workplace: How to Be More Resilient at Work.” PositivePsychology.com, 23 May 2022, https://positivepsychology.com/resilience-in-the-workplace/.