What Caused the Great Resignation (and How Can Employers Can Fix It)?

What Caused the Great Resignation (and How Can Employers Can Fix It)?

Determining how to attract and retain the stellar talent that powers your business is an ongoing endeavor for any company, and is even more critical as employers continue to weather the fallout from the so-called “Great Resignation.” In the period between April and September 2021 alone, a record-breaking 24 million workers quit their jobs. A recent study by the MIT Sloan Management Review investigated the root causes of the Great Resignation and managers and business owners would do well to heed the results.

To understand why employees quit, MIT evaluated millions of employees’ online profiles to estimate company-level attrition rates for the mostly for-profit employers (that employ approximately one-quarter of US workers), as well as millions of Glassdoor.com reviews for those companies, evaluating how positively the reviewers discussed 172 particular topics. The employees included both white- and blue-collar workers in a variety of industries.

The results were astoundingly clear (and confirmed what we employment attorneys already know very well): a toxic workplace culture was the greatest force driving employee departures. Though many think tanks and media commentators attributed attrition to low pay, MIT’s report found that a toxic culture was 10.4 times more likely to cause resignation than even an employee’s dissatisfaction with compensation. Apparently, employees are content to cope with a multitude of issues in their work lives—mediocre pay, an overly-bureaucratic workplace, or feeling siloed, for example—but none provokes as strong and consistent a reaction as a toxic work environment.

These findings are not unique. One in five respondents to a 2019 Society for Human Resource Management survey reported leaving jobs altogether due to toxic workplace environments. Another 49% of respondents considered leaving a job due to a negative culture. More than anything else, the Great Resignation seems to have been a culture crisis. Employees have spoken: a positive workplace environment is integral for workers—and it must also be integral for the organization employing them, too.

What are the hallmarks of a toxic workplace culture? In the words of employees’ reviews, a toxic company culture is characterized by what MIT has dubbed “The Toxic Five”:

  • Disrespectfulness and being treated with a lack of dignity
  • Unethical behavior and a lack of integrity in the workplace
  • Managers who treat employees abusively
  • An employer’s failure to promote equity, diversity, and inclusion
  • A feeling of extreme competition with and being undermined by co-workers

The significance of workplace culture was impressed upon me early in my career as an attorney litigating employment-related claims. A constant theme in these cases was the culture: nearly without exception, defendants permitted dysfunctional environments. Work culture was an afterthought or simply forgotten, allowing rampant gossip, backbiting, and a kill-or-be-killed mentality to thrive. The correlation between a positive culture and company performance was also apparent. Even if an organization with a toxic culture happened to be successful (many were not), the shadow of the greatness that the organization could have achieved with a functional culture was ever present. I realized that within the cocoon of these negative work cultures, harassment, discrimination, and retaliation—and a myriad of other employment law claims—were wholly inevitable. The question was not if these bad acts would occur, but only when.

Negative workplace cultures result in a revolving-door type environment, which is extremely costly to a business (SHRM estimates that culture-related employee turnover cost employers approximately $220 billion over a 5-year period). But the greatest and most regrettable cost of negative work cultures is human. Left in the wake of toxic workplaces were unhealthy and often broken employees, some with lifelong scars due to damage inflicted in the workplace. These experiences helped inspire my devotion to helping employers form workplace cultures where employees can thrive and business can prosper.

Since then, as part of my work advising employers, I frequently recommend and conduct workplace trainings to help employers cultivate positive workplace cultures. The process of preparing for these trainings encourages managers to engage in critical thinking about culture and can be a catalyst for change itself. Leaders are charged with identifying areas where transformation is necessary and are tasked with translating their ideal culture, usually an unspoken and implied phenomenon, into a tangible framework that will yield positivity, can be communicated to stakeholders, and will result in buy-in among employees. Culture training can provide an opportunity for leaders to obtain feedback (which should be encouraged) about organizational policies. What works? What does not and why? A successful culture training should look much less like a traditional “training,” which can sometimes feel stodgy and remedial, and more like a dialogue among peers with a common goal: to make the culture in which they spend most of their waking hours a positive, supportive environment.

Once the employer conducts a training that sets the baseline for operation of its culture, factors that detract from a positive workplace culture, such as backbiting, retaliation, and other harmful behaviors, are more easily identified and rectified. With ongoing reaffirmation through continued training and dialogue, a positive workplace culture will become firmly established, and employers will be better positioned to retain their most valuable asset—employees.

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