Winning the ‘Great Transition’

It is likely that more people will quit their jobs – and find new ones – in the next 100 days than at any other time in the history of the planet. This should matter to every company, organization and government. How they respond to this historic change will ultimately determine their success or failure, not just this year but for the next decade.

While the immediate response to the “Great Resignation” has focused on offering people greater compensation, the more lasting solution is likely to be a cultural one: offering people a genuine sense of purpose. This is how we move from the Great Resignation to the “Great Transition.”

It is understandable why a manager’s response to the Great Resignation is, initially, shock and then to throw money at the problem. The numbers are daunting — and accelerating. The latest data from the U.S. Department of Labor reveal that 4.53 million workers quit their jobs in November, the largest monthly total in 20 years. If the trend continues, more than 43 million workers – a quarter of the American workforce – will have quit their jobs in 2021.

This trend is not unique to America. A March 2021 Microsoft Work Trend Index, a survey of 31,000 full-time workers around the globe, found that 40 percent of workers were likely to consider leaving their current employer during 2021. According to British recruiting service CV-Library, 76 percent of UK professionals intend to look for a new job in 2022.

Nor is it isolated to a few sectors. While much attention has been focused on the hospitality industry, U.S. manufacturing saw a similar 40 percent increase in turnover rates between February 2020 and October 2021. Even C-suite resignations have become more common: a review of 1,095 leading companies around the world found that CEO departures doubled in the first six months of 2021 compared to the latter half of 2020.

All indications are that these trends will continue and accelerate. With so much competition for talent, why not enter the bidding war?

Here’s why: because viewing these developments as the Great Resignation is only looking at half the story. The whole story includes the Great Transition, with people of varying backgrounds, places and circumstances looking for something different than what they have now. Those who are quitting are finding new jobs they perceive as more attractive. Where they go and what they do will change the economic, political and cultural future of companies and countries for a generation. 

Every trend related to workers’ desire for a better work-life balance and purpose-driven work that was obvious before the pandemic has accelerated. This Great Transition is a key attribute of the New Dynamic, an environment defined and shaped by constant and rapidly increasing change.

And yet, a recent multi-region McKinsey survey of managers and workers reveals that there is a significant disconnect between how management and employees view this new dynamic. Managers perceive workers’ desire for more money, recruiting by competitors, greater development opportunities, health complications and the desire to work remotely all as more important factors in the decision to change jobs than workers do. Workers say their departures are more influenced by whether they are valued by the organization and have a sense of purpose, caring and trusting colleagues, and a flexible schedule at work.

These are different sides of the same coin, but with importance nuances. The employer’s focus on remote work is about company time. The employee’s focus on a flexible schedule is about personal time. 

The employer’s “better job” is one with higher pay, while the employee’s “better job” is one where leaders value their talent and provide a sense of purpose.

While many leaders extol the value of a purpose-driven organization, the real test is whether a sense of purpose is shared by all team members. An August 2020 McKinsey survey revealed that while 85 percent of upper management agree they can live their purpose in their day-to-day work, front-line managers and employees have exactly the opposite experience, with 85 percent unsure or disagreeing that they can do the same. That is the disconnect that will define a generation.

Leaders who cannot recognize this disconnect do so at their peril. Rather than fear the currents of the New Dynamic, they should allow them to drive change. Concerns such as compensation and benefits remain important, but those are just table stakes. Fostering a culture that prizes purpose and values team members is what will help organizations win the war for talent during the Great Transition.

Joe Andrew is the global chairman of Dentons, a multi-national law firm. He is former chairman of the Democratic National Committee.

Finance