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A record 4 million Americans have quit their jobs in April 2021. Here's the ultimate guide on what managers need to know and what to do about it.
Everyone’s talking about “The Great Resignation.” Foreboding articles about the summer’s record-breaking talent exodus have taken over every social media stream and news outlet from Fast Company to Forbes. But what does The Great Resignation mean for managers? And more importantly, how can you protect your team?
Here’s what we cover in this guide:
Coined by Texas A&M Professor, Anthony Klotz, The Great Resignation (also known as The Great Talent Reshuffle, The Turnover Tsunami, or The Big Shift) refers to the surge in resignations from April 2021 on. As the pandemic reaches its end and companies return to the office, many employees have opted for a major life change instead of job security.
The trend has been flagged as record-breaking and unusual. Those resigning aren’t only younger, hungry job hoppers. They span various industries, backgrounds, and reasons. In the last few months, many tenured employees at the top of their field have submitted their two-week notice.
Stories behind people’s resignations have taken over social media. They’re deeply personal, adding nuance and color to the statistics we see all over the news. For many, the pandemic brought about some serious self-reflection and a reassessment of priorities. The biggest trend we noticed: those that take the leap feel excited and self-actualized.
LinkedIn is using the hashtag #TheBigShift to capture stories and experiences behind these resignations:
Folks are also announcing their resignations on Reddit:
It seems counterintuitive to leave a stable position now, especially during a global pandemic. Vaccinations may have kicked off our new normal, but the future is far from clear. In similar periods of economic uncertainty, starting a business or diving into a new career in these conditions would be too large of a risk.
However, the pandemic has rewired our tolerance for risk. Microsoft’s latest report on global workforce trends shared, “With so much change upending people over the past year, employees are reevaluating priorities, home bases, and their entire lives. So, whether it’s due to fewer networking or career advancement opportunities, a new calling, pent-up demand, or a host of pandemic-related struggles, more people are considering their next move.”
Over 41% of the 31,000 workers surveyed by Microsoft expressed that they were thinking of leaving their jobs. So what exactly pushes a brief thought into a letter of resignation?
This reason shines through a lot of the testimonials seen in the stories above. Though “priorities” means something different for everyone, most have shared the epiphany that work doesn’t have to dictate where they live and who they spend most of their time with. Like many experiences with grief, processing our lost normal forced many to reassess what they value. If companies don’t align with these values, they won’t stay a priority for long.
After a year of layoffs and unemployment surge, our current talent shortage feels mistaken. However, a positive turn in the economy has supercharged demand for workers. There’s a 3 million person gap between job offerings and fulfilled positions as of May 2021. With the safety net of unemployment benefits and the increased demand for skilled workers, job seekers have a lot more leverage for negotiation and compensation packages. This window can make it opportunistic to leave before The Great Resignation dies down.
Described by The New York Times, the YOLO (You Only Live Once) economy covers the generation of type-A millennial workers leaving their positions to chase their dreams. The article covering this phenomenon says, “Their bank accounts, fattened by a year of stay-at-home savings and soaring asset prices, have increased their risk appetites.” Millennials, in particular, are sick of languishing and that fear of wasting their 20s and 30s. A fortunate few have sought creative fulfillment and challenging new ventures to correct this.
A recent Prudential survey of 2,000 adults showed that 87% want the option to continue working from home after the risk of the coronavirus subsides. For many, a remote lifestyle allows for more time with family, less stress from traffic, and cheaper real estate markets. The pandemic proved that location has little to do with productivity and mandated return-to-office commutes feel like a waste of time. These inflexible office policies have forced employees to choose between work and life. For most frustrated employees reassessing their needs, the latter wins.
Resignations rarely happen overnight. For many, frustrations with company leadership have been simmering for months. Our 2021 Remote Manager Reports showed that workers have suffered from record levels of burnout and isolation. When these issues are dismissed by those at top or made worse by toxic cultures, people lose faith in their organizations. Professor Klotz, who’s studied thousands of employee exits, shared, “When there’s uncertainty, people tend to stay put, so there are pent-up resignations that didn’t happen over the past year.” Now that the pandemic is coming to an end, we’re seeing overdue frustrations boil over into mass resignations.
Based on the stories we’ve seen, every teammate is vulnerable. This trend goes beyond generational and industry divides; the most profitable positions, diverse suite of employee benefits, and company tenure have been bypassed when people make the switch. Even Glassdoor’s Best Places to Work are doubling down, instructing managers to keep a closer eye on their teams.
At the end of the day, losing talent hurts more than the company. For executive and senior leadership positions, attrition can cost companies 213% of the lost person’s annual salary. By some accounts, the projected turnover could cost businesses $23 billion. For managers, the cost goes beyond money. Losing a key player on a team can make a hefty dent in team morale, potentially triggering a waterfall effect. In addition, tenured employees take their experience, mentorship, and ideas with them. Filling the gap during a hiring shortage will take much more resources than usual, delaying team processes by weeks if not months.
Managers sit at the frontlines when it comes to protecting their teams. They have the best insight on how teammates are feeling and they can be the first to intervene. Here’s how remote leaders can get ahead of The Great Resignation:
The extremes of the pandemic brought out the best and worst in company leadership. We’ve interviewed fantastic remote leaders that have encouraged vulnerability and team support, prioritized transparency, and gone above and beyond to show up for their people. We’ve also heard horror stories of toxic cultures, armored leadership, and fundamentally broken processes.
What’s jarring is that both camps advertise their company values and the need for high psychological safety. The key difference is how well they act on these claims.
This year alone we’ve seen major turnover. Amazon, Basecamp, Medium, CloudKitchens, Goldman Sach’s Marcus have appeared in the news for mass resignations of senior leadership, engineers, and tenured staff. Ex-employees almost always cite something wrong with the company’s culture or leadership. For some, the last straw was a simple memo to staff. It only takes a letter’s patronizing tone or extreme announcement to affirm years of suspicions and culture frustrations.
Here are a few examples where leadership policies went wrong:
Last month Basecamp’s CEO, Jason Fried, announced a policy banning “societal and political discussions” at work. Though this strategy had also been implemented at Coinbase, Basecamp saw a third of its people leave after the memo’s release. The issue was the memo’s context: Fried had released the policy in response to controversy around a racist names list. Management had known about this list, but left it to employees to address it.
When the time came to start tough conversations about the company’s culture and where it needed to improve, Fried sent out a statement to the public instead of addressing his employees. Employees were left to catch up over an internal all-hands, but discussions quickly got heated. At one point, Fried defended a senior leader’s denial of White supremacy and caused outrage among the staff. As The Verge describes, “[Employees] have recoiled at what appear to be transparent efforts to prevent their workplaces from becoming more diverse, equitable, and inclusive.”
Companies' return-to-office policies will begin triggering resignations. In June, Morgan Stanley CEO, James Gorman, released a controversial statement to staff, “If you can go into a restaurant in New York City, you can come into the office.” He expressed his “dim view” of remote employees and expected everyone back at their office by Labor Day. This adds to the recent policy changes made at JPMorgan, where a 10% permanent remote policy was changed to fully-in person by July. Gorman’s memo sparked discussions on Twitter and questions about blunt and uncaring leadership. Many families are still caring for sick loved ones or children at home. With surveys showing nearly half of employees would look for a new job if hybrid isn’t offered and the frequency of burnout for Wall Street juniors, there will likely be major turnover into the summer.
CloudKitchen is a unicorn startup run by ex-Uber CEO, Travis Kalanick. In April, over 300 employees left CloudKitchen in a mass resignation. Many who left cited secrecy and a “bro-culture” as inhibiting their employee success. From NDAs for phone screen interviews to limited visibility on colleagues activities, numerous walls created hurdles for the stealth startup. Entire teams were kept in the dark from one another, refusing processes that could scale better for a company of their size. Eventually, growth pressures and a lack of visibility led leadership to hide invoices and not install necessary heating units in restaurant properties. Without many perks and with many leaders leaving in frustration, entire teams have followed suit.
These extreme cases of resignations came from the very top. However, that doesn’t mean that managers can’t get directly involved. More nuanced problems can be addressed as soon as they’re noticed. As senior employees, managers can advocate for their employees and contest against tone-deaf policies. They can choose to uphold toxic policies and behaviors or to protect their employee’s needs.
When it comes to retaining the talent of your team, success comes from putting them first. Teammates can feel this, and they’ll believe in their work because of that care.
We’ve written articles about how transparency drives remote teams to success. The best remote teams rely on open lines of communication to break down silos and create alignment despite the distance.
This is necessary for both strategy and change management. In Dare to Lead, Brené Brown shares the statement, “Clear is kind.” This policy leads teams through uncomfortable conversations and allows them to be vulnerable with one another. When managers armor up and refuse to give teammates information, teammates resort to back talking and rumors. Addressing issues with clarity allow teams to co-create next steps.
The second-biggest reason for turnovers are a lack of acknowledgement by direct managers. Unfortunately, many managers worry that celebrating too often will distract teammates from their goals and milestones. Instead, gratitude can both bring teams together and be a massive tool for fighting against poor mental health and burnout. By acknowledging employee efforts, teammates feel valued and seen. Teams can bond over their shared wins and celebrate one another, instead of always scrambling to keep up with manager expectations.
However, acknowledgement doesn’t end with a celebration emoji or announcement on Slack. It’s about little moments and fostering a culture that prioritizes gratitude. We’ve written an entire article on where managers can start.
In a Personio survey, employees cited career progression as their biggest driver for looking elsewhere. To make matters worse, HR and senior leadership often drastically underestimate the impact of culture and growth opportunities on employee attrition. The end result is limited opportunities for learning and career progression. When teammates are faced with the big decision to leave, this immobility is often the final straw.
Managers are directly responsible for growing their teammates. This happens in all employee interactions, from encouragement during a meeting to thoughtful feedback during a 1:1. They also listen and honor everyone's seat at the table. The best remote managers act as coaches and set their teammates up with opportunities to improve themselves.
With Bloomberg citing that 9 out of 10 people never want to work in an office again full-time, it can be tempting to throw options for hybrid work. However, hybrid remote models can fall into disarray if they’re not intentional and thought-through. The key issues we saw in remote work––relationship building, miscommunication, and misalignment––get underscored when teams are separated into in-office and remote camps.
That’s why remote managers need processes, tooling, and curiosity for iteration to make hybrid remote work succeed. With the pandemic’s end around the corner, the time to start preparing is now. Here’s GitLab’s guide to getting started.
Managers need to have a pulse on their teammates to offer timely support. However, knowing how teammates are feeling, who needs extra care, who’s ready to jump ship is a major challenge when you’re not meeting face to face.
Employee engagement is much more nuanced than people think. With growth and burnout affecting team morale, measuring overall success goes beyond NPS surveys and attrition numbers. Some of these metrics are clear cut, others are more ambiguous:
A surprise resignation is a manager’s worst nightmare. Articles will often tell leaders to look for the classic signs of disengagement: withdrawal, poor communication, apathy, absenteeism, and decline in work quality. However, these signs become even more nuanced while remote. Unlike an office, you can’t look for slumped shoulders or Tetris on computer screens. Even with these manager best practices in place, it’s difficult to know whether efforts are actually helping.
To make matters worse, most employee pulse surveys are flawed and can put extra stress on burned-out employees. So how do managers take responsibility for their team’s health data?
That’s where Kona comes in. With daily team check-ins on mood and personal context, Kona goes beyond engagement surveys to create opportunities for bonding and vulnerability on teams. This not only allows managers to intervene with issues in real-time but also encourages teammates to rally their support. Teams get closer with Kona and managers get wider trends on exactly how teammates are feeling.
When an employee resigns, there’s not much you can do. However, there are ways a manager’s reaction can make a bad situation worse. In the worst-case scenario, the loss of a top performer can actually trigger other resignations on the team.
That’s why Harvard Business Review shares a few tips for dealing with a resignation you don’t see coming:
A significant ratio of workers are leaving their positions for better opportunities. As a manager, you sit at the front lines. Companies retain talent by prioritizing team needs and putting people first.
Corine is co-founder of Kona. They write regularly on emotional intelligence and people-first leadership. Their work has been featured by Fortune, Yahoo, TechCrunch, Entrepreneur, Harvard Business School, Forbes, and more. They've spoken at remote work conferences like GitLab Commit 2021 and advised Fortune 10 companies on remote strategy.