While the media might exaggerate the topic, ‘The Great Resignation’ is a real trend that’s occurring across the world. Attrition has always existed within all companies and industries, but the current spike in attrition is driven by some unprecedented variables. The combination of the pandemic, the millennial and the Gen Z workforce mentality, and a power shift towards employees rather than employers, are influencing variables which mean people are quitting their jobs in record numbers. In particular, the turn in tide from an employer market to an employee market has made the game for talent more aggressive than ever.
The main triggers for people to quit their jobs are:
- Poor managers and leaders (to understand the scale of this just open up a google search bar and type “my manager is” and see what the most searched topics are to finish that sentence!)
- Toxic company culture
- Lack of career development and recognition
- Lack of a strong sense of purpose and belonging
- Lack of a strong sense of work-life / family balance
- Poor company response and lack of support during COVID-19
Another factor to consider is that the spike in attrition is not uniform across all companies and industries. When referencing “The Great Resignation”, much of the attrition is from industries such as retail, hospitality, fast food, management consulting, and travel. But on that note, the tech industry has certainly been impacted as well.
Whenever we speak about the topic of attrition, a common misconception is an assumption that compensation is the main reason for people to leave, and that using compensation as a “magic bullet” will help to retain people. As mentioned above, research does not support this. In relation to compensation, we recognize that it can be a demotivator if people are not paid fairly, but it’s seldom a motivator, just as it’s not why people start looking for a new job.
As HR professionals, we’d also do well to remember and educate / remind our business leaders on the fact that there is such a thing as healthy attrition. When an employee hits their ceiling and it’s “their time to move on”, but they continue to stay with the company it can easily create latency and toxicity within the organization as well as demotivate teammates around them. Instead, we should encourage those that have hit their ceiling to move on, as it’s best for the employee and company.
At Spotify, we have not been drastically reactive when addressing the hot topic of ‘The Great Resignation’. Instead, we like to think about the opportunity these trends present towards attracting new value-add band members. Here are some of the initiatives that we focus on that we think work in our favor in the game for talent:
- Launch of our Work From Anywhere program. The pandemic has taught us that asynchronous work is the future. Our people have told us that this is the preferred setup for them to work and how they can be their very best, therefore we believe it will be a strong retention factor for us. Providing the flexibility for our employees to work from anywhere has not only been a game changer for our existing band members, but has been a great attraction tool for new hires as well.
- Driving an inclusive, purpose-driven culture. Our company culture, our EVP, our values and the Band Manifesto play a big part in who we are and who we are striving to be, and these factors are becoming increasingly important for an employee’s sense of belonging, and therefore how attractive an employer is. to them.
- Make sure excitement and engagement can take a center stage in our culture through the work of our CommunityX team. This extra sparkle, connectivity, and togetherness go a long way towards attracting new employees. Making room for new band members to join the community and contribute to the ever-evolving culture is key.
- Our People Strategy of putting people first and leading by example with our world-class benefits and policies, such as our global parental leave, IVF, flexible public holidays, Wellness Week, and mental health support (to name a few). After the past two years, focusing on the health and wellbeing of your people has never been more important, and what was once a “nice to have” is now a prerequisite for any company that wants to (retain and) attract a healthy workforce. While many companies see this as a burden or a cost on their P&L, we see these initiatives as important investments in our people.
- Continued coaching and development of Spotify’s people managers to be world class leaders. This is something we have concentrated our efforts on well before the term ‘The Great Resignation’ emerged. There is a well known saying that “people don’t leave bad jobs, they leave bad bosses. ” Therefore, our strategy continues to be laser focused on coaching, developing and training our managers to be the very best leaders they can be, with a spotlight on leading with empathy and vulnerability during these very difficult times.
- Focus on career development and growth. 2022 will be an important year for Echo. Our internal talent marketplace will be one of our most important tools for retention, and therefore becomes a great tool for talent attraction too. Joining a company where there’s proactive work towards offering lateral career opportunities is an invaluable proposition.
- Walking the talk when it comes to our zero-tolerance policy to ensure that we work in an environment free from harassment and discrimination, and take action accordingly and swiftly when an issue arises. Actions speak louder than words and those considering a new employer regardless of what a company says and how that matches with its actions very closely.
On reflection of ‘The Great Resignation’ and what it means for HR teams around the world, if you have done the groundwork with your culture, you might actually find your company is well positioned to reap the benefits rather than be a victim of the trend .
The companies that are being hit the hardest are those companies that refuse to adapt and embrace change within their organization to better understand and support a new generation of workers, in these unprecedented circumstances. Companies with a toxic work culture and low sense of community, belonging and inclusion are being hit the hardest. Companies with mediocre managers, who are more focused on themselves than the well-being of their teams are also losing the game of talent. Companies that do not support or empathize with what their people are going through during this pandemic are the ones standing on the sidelines as more and more of their people quit.
At Spotify, we believe that if we continue to stay the course when it comes to our People Strategy, culture, and values, the risk of us being a victim to this trend the way it is defined in media, articles and by financial institutes, is low. If anything, we believe that for Spotify, it will be ‘The Great Attraction,’ as we continue to embark on yet another big hiring year.