Last week, MIT/Sloan Management Review published the results of a massive research effort by the university and its partners studying the root causes of the so-called “Great Resignation of 2021,” which we at the Center for Respectful Leadership call the “Great Reconsideration.”
To us, the #1 reason people quit their jobs last year – a “Toxic Culture” – is no surprise. For nearly two decades, we’ve been beating the drum as hard as we could about the significant costs of toxic, disrespectful work cultures.
But you’ll recall last month I reported on a recent CEO conference I attended where a top economist implied that the primary reasons people were quitting their jobs during the pandemic, and not seeking re-employment, was their reliance on unemployment insurance, federal pandemic assistance, and the ban on evictions due to unpaid rent. I was troubled by this conclusion then, and after reviewing MIT’s recent data, I am now thoroughly convinced that he was fundamentally incorrect.
MIT’s study was beyond exhaustive: between April and September of 2021 they examined 34 million online employee profiles to identify U.S. workers who were no longer employed for any reason including quitting, retiring, or being laid off. Cross-referencing these with “The Culture500,” (a list of companies that employ nearly ¼ of the entire US private-sector workforce and are evaluated by experts and their employees as having outstanding corporate cultures), they were able to estimate attrition rates across a wide range of industries. From there, using 1.4 million reviews from Glassdoor and other rating sites they measured the frequency of topics mentioned by those who had resigned, therein identifying the top reasons why people quit during the period while matching them against a given industry’s attrition rate. The results are clear.
While many of the media stories about the Great Reconsideration over the past few months have erroneously focused on wages as a key driver of this unprecedented wave of resignations, according to the study, compensation ranks 16th among all topics in terms of predicting employee turnover – 16th! So no, people aren’t quitting their jobs over pay or because they got too much government aid.
The #1 reason people quit is “A Toxic Culture,” which we and the study authors define as, “an organization with a culture that fails to promote diversity, equity, and inclusion; where workers feel disrespected; and which engages in unethical behavior.” According to the study, a toxic culture is 10.4 times more likely to contribute to attrition than compensation.
It would be obnoxious if we were to shout, “We told you so!” But many of the millions of workers who quit toxic work cultures every year wouldn’t blame us if we did. Nevertheless, this new data prompts us to ask once again…
What will it take for organizational leadership to accept the fact that treating people with respect is the most effective way to retain their best and brightest, keep turnover and conflicts to a minimum, and drive outstanding business results?
Maybe this new data will finally help us get through to them…maybe.
