The pandemic brought about a labor shortage that continues to be felt everywhere from the food service industry all the way up to corporate America. Most analysts believe we are approaching the other side of the hump— that employers will regain the upper hand when it comes to power in labor.
Still, it begs the question— why do people leave their jobs? Why do people stay? What factors contribute to workplace retention? Not only are the answers to that question valuable for employers, but they may also help working Americans think about what they value in their jobs.
In this article, we take a look at what causes low rates of retention in the American workforce.
One of the most obvious concerns that American workers face is pay. In 2019, the minimum wage was around $8 depending on where you lived. That meant that a minimum wage employee could work a 40-hour week and bring in only $320— less after taxes.
When the pandemic hit and these minimum wage jobs suddenly contained the risk of the deadly infection, many people felt it was no longer worthwhile. In response to the labor shortage, the minimum wage has gone up in many parts of the country, and twelve states are currently working on hitting that $15 number.
Even there, however, the figure is just barely livable, even with two working people supporting the household. Ahh, you think. But isn’t minimum wage better than no wage at all?
Of course, it is. During the pandemic, many people blamed stimulus money and a temporarily inflated unemployment payment for de-sensitizing people for work.
Realistically, both factors contributed at least temporarily to the labor shortage. However, we are now two years removed from widespread lockdowns. So why are people still not going back to work?
Greater Rates of Small Business Ownership
People are registering businesses at a record level. In 2021, there were 5.4 million business applications filed. That is up from 3.5 million in 2019. It’s hard to account for exactly why there are so many new businesses being started.
Experts have two good guesses. The first is that many people delayed their small business ambitions until after the pandemic. When the lockdowns finally ended, instead of heading back to their old jobs, they struck off on their own.
The other explanation is that it is now easier than ever to open up a business online. The e-commerce boom allows people to open for business with little startup money, and make deals with people all around the world.
Either way, these factors have made it so that fewer people returned to work.
Poor Working Conditions
Labor statistics begin to look bleak when you examine the emotional experiences American workers are reporting. The average American worker reports that they trust strangers more than they do their own boss. More than half report experiencing anxiety, depression, and stress related to their work. Many also say that they bring work home with them, or work on weekends to keep up with the demands of their job.
It’s not a sustainable dynamic. When people are unhappy at their jobs they will eventually lead them. Now, it is worth noting that the public conversation around labor is slowly beginning to focus more on employee wellness. Businesses all across the country are taking pains to ensure that their workers are happier.
This has come in the form of more flexibility. Remote work options. Flex hours. Four-day work weeks, etc. It has also included improved company culture. Mental resources. Child care. Things that make it easier to be a working person.
Investing in employee wellness is a worthwhile endeavor. For one thing, businesses with high levels of employee satisfaction report greater levels of retention and productivity. They also attract better talent. Job seekers consistently rank company culture above almost any other consideration, including compensation.
It’s a pretty simple dynamic, really. People spend more time at work than they do with their families. They want to feel respected while they are there.
People get antsy when they feel like their careers are stagnating. Businesses that offer little by way of employee advancement are destined to experience high levels of turnover as their staff looks to find employment at a place where they can grow.
Of course, there is only so much a company can do to address this concern. If you don’t have many promotion opportunities, there’s only so much that can be done to fix the issue. Looking for ways to promote from within is a good start. Even if there are only a limited number of opportunities, people will feel better about their chances of getting them if you avoid outside hires for high-level jobs.
Toxic Feedback Cycle
People have complex relationships with their bosses. That cliched dynamic of being uncomfortable around management is actually very accurate according to most employee surveys. Are American bosses simply unkind?
It’s a little more complicated than that. It’s not the boss themselves, but the concept of management that is causing problems. Most workers only speak with their bosses when there is an issue. When all feedback is negative, you naturally establish an unpleasant association with the person giving it to you.
Workers who receive positive recognition consistently report being happier on the job. Not only does this result in higher levels of retention, but it also increases productivity and even growth rates.
Bosses that want to improve morale around their place of work can do so simply by taking the time to chat with all of their employees throughout the week. The conversations don’t always even need to be about work. Believe it or not, people like talking about their families more than they do about spreadsheets.
While there is no surefire solution for high turnover, it seems that many of the most popular solutions simply involve treating employees like people. Most moral issues aren’t the product of insensitive or uncaring bosses. It’s just a logistical problem. Workplaces weren’t conceived with happiness and satisfaction in mind. If these things are to exist at work they need to be deliberately added and nurtured.
Do that, and you’re sure to increase your turnover numbers.