Are Your Employees Quitting Or Disengaged? Look In The Mirror For Answers!

The last couple years introduced us to a bunch of new concepts in the post-COVID workforce. The first was the Great Resignation, with an estimated 20% of workers planning to quit their jobs in 2022. And more recently, Quiet Quitting, where workers don’t actually quit their jobs, but instead, put in the bare minimum of work required to keep their employers happy, without putting in a minute of extra effort. To me, these are both problems with the employers, not the employees. Because if employees were actually happy, respected and engaged in their jobs, they wouldn’t feel the need to quit their jobs, either outright or in mindset while still employed. This post will help us diagnose if you have any problems that need fixing in your business, to help stem this tide.

A Couple Unhappy Workforces as a Case Study

Let’s look at a couple industries where quitting seems to be at an all-time high: K-12 education and restaurants. These are two industries I know well, with my wife a 2^nd grade teacher and me owning a business serving the restaurant industry. In both of these industries, it is pretty clear to me why people are quitting; they are being asked to work their tails off with very little reward, where it is so much easier for them to switch industries and make materially more money elsewhere. Not to mention how dysfunctional these types of businesses can be, without a lot of ways for their new ideas to be heard or acted upon, where businesses are being mismanaged, oftentimes with a lot of bureaucracy. Why would anyone want to work in that environment? Anyone that does is because they feel they have no other options based on their skillsets or because it is simply their passion project giving back to their communities, without making compensation or job satisfaction their ultimate drivers. Which is not a great position to be in, for the employee or the employer.

Reality Check

So, how do we fix this? We start with common sense that 20% of workers are not resigning the workforce overall, they are resigning YOU!! There must be something you are doing that they are unhappy with that needs to be resolved. That could be something like low compensation levels, their mundane day-to-day tasks, your company culture, lack of upward career mobility, a bad boss, lack of job flexibility or whatever. So, if you are experiencing high levels of employee turnover or engagement, it is time to look in the mirror and start auditing everything you are doing, with a post-COVID mindset of what employees are looking for. Let’s dig into that a little bit deeper.

Study Compensation Levels

Going back to our case study above, can restaurant workers really make a living wage at $15 per hour? That is only $30,000 per year, in a world where inflation is off the charts. After tax, that is only around $2,000 per month. Let’s say half of that goes to covering their rent, and that leaves the other half, or $33 per day, to cover all their other living expenses. That math simply doesn’t work. Not to mention, they have to be on the job in person, when all their other friends are getting more flexible jobs that allow them to work from home.

And the same thing for the teachers. They are teaching our kids and setting up the future of our country. It disgusts me that movie stars and sports athletes are making $25MM per year, and teachers’ starting pay is around $50,000 for doing a TON of work, dealing with hostile parents, and working in dysfunctional workplaces where the rules keep changing each year. Enough already, teachers need to be better respected and a material bump in pay to justify those working conditions. We as a society need to better value the roles they are playing, and all chip in with slightly higher real estate tax bills.

So, what does this mean for you? Stop thinking of your industry in a vacuum, and stop using historical pay levels as a baseline benchmark. You may need a drastic salary increase to retain and attract new talent in today’s market. And employees will seek out work in other industries, if they are unhappy with the compensation levels in your business or industry. So, when studying average pay by role, do so across industries. And I didn’t talk about studying benefits packages here, but you should do that, as well, to make sure you are in line with the market. A good benefits management company can help you benchmark yourself versus other employers.

If you determine you cannot profitably afford market rate salary increases, you may have a material problem on your hands. But hopefully, raising your prices, to better afford market rate salaries, will help you fund these increases. God knows my restaurant bills have been going way up, as restaurants are paying their staffs more in an effort to try to retain them. But if price increases are not digestible by your customers, you may need to face the hard fact your business model may be broken, and may not survive without a material change in the model metrics.

Study Job Flexibility

Thanks to COVID, everyone prefers a more flexible job environment, starting with the option to work from home. So, don’t be stuck in the Stone Age, requiring everyone to be in the office every day. That will allow the staff more flexibility to save on commuting time, parking costs, gas costs, car costs, etc. and enables them to be closer to their families for taking care of their kids or attending their local school events or other appointments they may have. You don’t need to “see them”, to know if they are doing a good job. You will see their success in the data coming from their work (e.g., sales results, tasks completed).

Study Company Culture

If your staff are grumbling behind your back that they work in a “toxic work environment”, you have a major problem on your hands, and need to “plug the hole” before the whole “bucket” drains empty. Survey your staff, either directly or through an HR consultant. Ask what they like and don’t like about the business, and then lean into your strengths and repair your weaknesses. Be sure to calculate your net promoter score of your employees, not just your customers, and shoot to keep that number at 8.5/10 or higher.

Study Management

You may love one of your managers, sucking up to you as their boss, but their direct reporting employees may hate them. Be sure to complete 360 degree reviews of your employees, so they have a chance to speak openly about their boss, at the same time their performance is being reviewed. Nothing will get a person looking for the door faster than being micromanaged, disrespected or verbally abused by a bad manager. So, you may need to part with someone you like, for the greater good.

Study Career Paths

People want to stay in companies where they can see upward mobility in their careers. They will give you a couple years in their current role, but what comes next? Is your company growing, to create new layers of management for them to grow into? If so, great. But if not, the employees may get bored and decide to find a new challenge. So, put plans in place, for each role of the company, where they can easily get visibility into how their responsibilities and compensation will increase over time, to give them “hooks” to want to stay working with you over the long run.

Study Day-to-Day Tasks

Nobody wants to work in a job they don’t enjoy. So, ask yourself: would you enjoy that job? If not, figure out what it would take to make that job more enjoyable. If it is eight hours a day of mundane, brain numbing tasks, figure out how best to make the role more stimulating—maybe sharing mundane tasks across a broader team that is doing more strategic tasks for most of their work.

Closing Thoughts

So, this concept of the Great Resignation and Quit Quitting is really hogwash to me, as the focus is on the employees, not the employers. These people need to work to pay their bills. You just need to figure out how they will want to work for YOU, and not be looking for the door looking to work for someone else that better values, respects, challenges and motivates them. After doing this internal self-study, if the mirror is not broken, keep up the great work. If you are staring at a bunch of broken glass, it is time to start fresh and rethink everything you are doing.

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George Deeb is a Partner at Red Rocket Ventures and author of 101 Startup Lessons-An Entrepreneur’s Handbook.