There’s no doubt that the pandemic was a bombshell, throwing the world as we knew it into chaos. It introduced the reality of social separation, shutdowns, remote working, almost zero travel, and wearing masks both indoors and out — along with the extra burden of organizing our kids’ home education. Businesses faced turmoil as offices emptied fast under a wave of fear. It was hard not to notice restaurants, bars, sports events, hotels, bus operators, airlines, and gyms entering a full-blown economic and social crisis under strict crowd mandates.
The employee experience (EX) that lies at the heart of every company’s profitability also took a hit. One of the most crucial management responsibilities is holding on to your talent by building employee loyalty throughout the ranks. Failure to do so triggers a devastating trend called employee churn (the opposite of employee retention). The latter, together with its close cousin customer retention, is a pillar of a healthy ROI. Common sense tells us that the recruitment process and integrating a new employee into the team is a massive strain on company time and financial resources. Indeed, the cost of replacing staff, conservatively speaking, is at least 150 percent of their annual salary, and probably more than double. In cases where employees are moving in and out over short periods, the cost may run hundreds of thousands of dollars — and for enterprise-scale operations, somewhere in the millions.
Tracking EX through the pandemic and beyond
Before March 2020 and the shutdown, high employee turnover was a real problem in general but dropped to a nine-year low between then and when vaccinations began to pick up. Indeed, it looks like the COVID-19 disruption was “the quiet before the storm.” According to a reliable survey, the U.S. is facing a flood of employee resignations throughout 2021. Consider this:
- More than 50 percent of the respondents said they were on the hunt for a new job.
- In a separate study, 25 percent indicated they would outright quit without a fallback as soon as COVID-19 fades from the scene. These respondents underlined that they were confident recruiting efforts would accelerate, giving them new employment opportunities.
Danny Nelms, president of The Work Institute, a research and consulting firm, believes there’s pent-up employee turnover ready to explode. He thinks it will take the monthly number of employees resigning their jobs from 1.9 million (in April 2020) to a monthly number above three million throughout 2021.
Reasons for employee churn in pandemic times
As one would think, traditional motivations like ambition (i.e., rising in the professional hierarchy) or looking for a raise would be the primary drivers. An interesting research study by the Achievers Workforce Institute — a Toronto-based employee recognition SaaS company — confirms that the single most significant churn influence was a need for better compensation and benefits (35 percent). Improvement in work/life balance (25 percent) was a close second.
The study dug even deeper, exposing some underlying discontent:
- Nearly half the 2,000 respondents declared disconnection from the company.
- Over 40 percent felt their employer’s culture was slipping under pandemic pressures.
- Only 21 percent had an affinity to their company and a compulsion to stay engaged.
- The government relief with unemployment checks available month after month added fuel to the employee churn fire, encouraging the job-hopping trend.
In November, Eagle Hill Consulting, a Washington, D.C.-based management consulting firm, ran a poll across 1,000 employees, with some groundbreaking insights. Respondents cited disengagement and burnout as serious demotivators (57 percent). This is simply frightening from every employers’ viewpoint. The trauma of adjusting to COVID-19 and surviving to fight another day has created a significant loss of employee loyalty.
At the root of it all lies an inability to show performance appreciation (i.e., recognition) and execute an effective employee feedback program. While it has been a resilient stop-gap, remote working fails to embrace the needs of employees working in isolation. The challenge is how to make people part of the corporate family when the human-to-human touch isn’t possible.
Undoubtedly, remote work leads to more flexibility. Still, the data shows employees are working more — starting earlier and finishing later to cover family issues in between. The strain is too much. All the social restrictions and family stresses rolling out over the past 12 months blurred the lines between work time and family-time. In other words, the transition to remote work, even if it was organized and supportive, lost much of its natural attraction amid isolation from family and friends.
What can employers do about it?
Backfilling with the same-old, same-old isn’t going to resolve what’s turning out to be a full-blown HR crisis. Companies that accept the notion of strategic planning must look ahead by defining the talent, skills, and roles for employee retention outside of COVID-19. With remote working in the mix, all of the former rules go out the window. Instead, new work challenges call for a different approach — one that considers the best way to schedule working hours and keep employees connected. Upskilling, reskilling, and filling in the gaps with freelancers are critical considerations that can make all the difference.
Rethink your path forward using the following guidelines:
- Identify and focus particular attention on your top-performing employees by going the extra mile to engage them. These individuals are more likely to burn out sooner, generally reflecting a higher ambition. This involves developing a program of well-thought-out training, with greater transparency around career progression and compensation.
- Don’t lose a single chance to recognize your employees. The Achievers report referenced above discovered that close to 75 percent of the high achievers rated recognition as an indispensable work requisite. Rewarding employees in meaningful ways extends to elevating their image in the eyes of peers, family, and customers. When they’re not working in-office, the task appears daunting, but there are solutions. For example, learn the art of conferencing in teams (using all the latest available digital resources) to announce exceptional performances and achievements.
- Listening to employees has never been more critical than now. Hear what they have to say on everything that impacts their lifestyle and remote work. In times of parabolic change, feedback is an invaluable commodity. A range of EX surveys will move things along to expose employee thinking and emotional well-being.
Frank focus discussions (remotely or in-person), career counseling, and mentorship options also bolster employee support and maintain employee engagement. Interviews with employees who are considering leaving — or have given notice — under the guidance of EX specialists are worth their weight in gold, and may lead some departing employees to reconsider and stay with your organization. In short, it’s imperative for companies to consider all options when it comes to slowing down employee churn.