Rethinking the Workplace 2022

Employee turnover has surged since the pandemic began in 2020. No sign of slowing. According to the U.S. Bureau of Labor Statistics, resignations totaled roughly 33 million in 2021. A record. The previous 10-year annual average was 23.3 million. That is a 40% jump in a single year.

Alarming, yes. But the data from 2021 and 2022 gives leadership teams enough signal to cut turnover and keep highly qualified employees.

Three reasons drive most of the attrition.

Reason One: Baby Boomer Retirements

The youngest baby boomer just turned 57 at the start of the year. This generation will have largely exited the job market by 2030.

Pew Research began tracking boomer retirements in 2012. The annual average was 2.2 million. In 2020 it topped 3.3 million (Fry, 2020).

But there is an opening here. Many boomers want to keep working through the first few years of social security eligibility. They want flexibility. A part-time role. A reduced workload. Fortune found nearly 80% of boomers favor that arrangement.

Reasons to take this seriously: boomers are institutional historians. They make influential mentors for younger workers (Bove, 2022). Build a real mentorship program. Bridge the gap between semi-retired and younger employees. Use that as a recruiting and retention strength for anyone looking for guidance in their next career phase.

Reason Two: Toxic Cultures and Bad Managers

Toxic cultures and poor-performing managers are the second driver. Researchers at MIT reviewed 34 million employee profiles. Company culture was the determining factor for these resignations (Sull et al., 2022).

They also found an inverse relationship between workplace culture satisfaction and average turnover. Companies with strong reputations saw much lower attrition.

According to their data, fixing toxic cultures (by retraining everyone on professional boundaries or discharging unproductive managers) is 10x more effective than handing raises to the people who stayed. Toxic cultures and bad managers fuel the resignations. Pay does not patch that.

Organizations need to be honest about the damage when employees misbehave and stay on the payroll anyway.

Reason Three: A New Generational Majority

The most compelling reason to rethink talent attraction and retention: the workforce majority is about to shift.

By 2030, 80%+ of the workforce will be Gen Y and Gen Z. Their core values center on diversity, equity, inclusion, and accessibility. Employers must align with the largest generations or watch them leave.

Bain and Company found that highly skilled workers will become scarcer and will demand reconfigured work arrangements to keep them engaged (Harris et al., 2019).

CALL TO ACTION

Bibliography

Bove, T. (2022, January 13). Older workers want more flexible work options. Fortune. https://fortune.com/2022/01/12/baby-boomers-retirement-flexible-hours-savings-covid/

Fry, R. (2020, November 10). The pace of Boomer retirements has accelerated in the past year. Pew Research Center. https://www.pewresearch.org/fact-tank/2020/11/09/the-pace-of-boomer-retirements-has-accelerated-in-the-past-year/

Harris, K., Kimson, A., and Schwedel, A. (2019, March 28). Labor 2030: The collision of demographics, automation and inequality. Bain. https://www.bain.com/insights/labor-2030-the-collision-of-demographics-automation-and-inequality/

Kelly, J. (2021, December 10). Baby Boomers are leaving the workforce to live their best lives in a Silver Tsunami ‘great retirement’ trend. Forbes. https://www.forbes.com/sites/jackkelly/2021/10/01/baby-boomers-are-leaving-the-workforce-to-live-their-best-lives-in-a-silver-tsunami-great-retirement-trend/?sh=df6aea0260bd

Sull, D., Sull, C., and Zweig, B. (2022, January 11). Toxic culture is driving the great resignation. MIT Sloan Management Review. https://sloanreview.mit.edu/article/toxic-culture-is-driving-the-great-resignation/