Fewer workers are voluntarily leaving their jobs in 2024, compared to previous years, in what is being deemed the “Great Stay.” The quit rate has declined significantly in the United States, dropping to a low 2.2%, according to recent data by the Bureau of Labor Statistics. This trend contrasts with the peak of the Great Resignation, when a record 4 million workers were quitting their jobs monthly.
The reasons behind employees tightly holding onto their current jobs is more nuanced than a lack of available white-collar opportunities. The “Great Stay” phenomenon, also known as the “Big Stay,” is being driven by economic turbulence due to high inflation, interest rates and the cost of living, in addition to geopolitical turmoil with wars in the Middle East and Ukraine. All of the uncertainty has caused workers to hunker down in their jobs and take a wait-and-see approach before making any long-term decisions about their careers.
The bullishness of pandemic-era hiring died down and mutated into a more sober, belt-tightening, cost-conscious corporate mindset. Once interest rates rose higher, companies were no longer hiring hoards of workers, as money was no longer flowing due to the low costs of borrowing.
As a result, the interview and hiring process tremendously slowed down. Jobs were put on hold and offers were rescinded. Part-time and contract roles became more prevalent, as they meant less overhead for businesses. The power dynamic shifted back toward employers, who now have more leverage in the labor market after the supply-demand imbalance during the Great Resignation. Companies began rolling back their flexible work styles, calling for employees to return to the office.
As a result, workers became risk averse to switching jobs, much like the expression, “Better the devil you know than the devil you don’t know.”
Reasons For Staying
With economic uncertainty, fears of potential layoffs, the pervasiveness of performance improvement plans and companies adopting aggressive cost-cutting measures, the labor market feels less conducive for job hopping.
Workers are hesitant to quit their jobs in this environment, preferring to stay put rather than risk joining another organization, only to be immediately laid off—known as the “Last In, First Out” rule.
Even if they don’t love their job, during a down market, it’s reasonable and understandable to hold tight at their current firm. In tough times, having a steady paycheck and good employee benefits, including health insurance and a retirement plan, are critical, especially as 37% of Americans lack enough money to cover a $400 emergency expense, according to the Federal Reserve’s 2023 Economic Well-Being of U.S. Households survey published last month.
If workers see potential for a promotion, taking on new responsibilities, upskilling and career advancement at their current employer, they are more likely to stick around.
Additionally, solid work friendships, a supportive manager and fitting well into the company culture are key drivers in employee loyalty.
The longer someone stays, the more they build equity, reputation and dependability within the organization, which can open up better roles and projects internally.
If a job provides meaning, aligns with values and allows a sense of contribution, workers are more inclined to stay, despite other considerations.
Many people opt to take the path of least resistance. They don’t want the hassle of changing jobs and prefer the familiarity and comfort of their current roles.
A CHRO’s Perspective
To learn how organizations are effectively managing the Great Stay, I spoke with Susan LaMonica, chief human resources officer at Citizens and former HR executive at JPMorgan for more than 20 years.
“While the immediate financial benefits of employee retention, such as reduced recruiting, hiring and onboarding costs, can be significant, it’s important to consider the broader implications of the Great Stay,” LaMonica stated. “Companies that focus solely on cost savings without investing in employee development or attracting and effectively onboarding new talent, risk creating stagnation, which can lead to decreased motivation, innovation and overall performance, ultimately negating the benefits of retention,” the CHRO added.
It can be harmful to an organization if workers are just biding their time until the job market picks back up. If employees become complacent, this could lead to high levels of disengagement and result in the loss of productivity and revenue. Moreover, disengagement can spread throughout the company’s culture, impacting overall employee morale. This can be a cancer to any organization.
As an HR executive, LaMonica recognizes that business leaders must engage, nourish and upskill employees.
“Regardless of labor market conditions, employees expect and require opportunities to learn and grow from their employers,” she said. “Even though employees may not be leaving at the same rates as they were during the Great Resignation, they still seek job satisfaction, career development and a supportive work environment.”
To this end, LaMonica is a proponent of “maxim levels of engagement” and “thinking horizontally,” along with being intellectually curious and adapting to the pace of change, which includes embracing technology and a growth mindset.
It’s mission critical to continually keep people engaged. This can be accomplished by investing in your workforce, being aware of skills obsolescence that could potentially cause employees to fall behind and leveraging coaches and mentors.
The HR professional highlighted the importance of enabling employees to “bring their whole selves to work,” encompassing how leaders connect with empathy, provide flexibility and offer supportive benefits and tools to succeed. She emphasizes striking a balance between organizational needs and caring for employees’ holistic wellbeing to drive engagement
“We definitely want to create a culture and an environment where employees want to stay. As we have, we will continue to see cycles in the labor market. The best companies will stay nimble and pivot strategies accordingly, but the best of the best will do so while also staying focused on meaningfully investing in their people and their culture,” said LaMonica.
She shared that Citizens pledged to support upskilling and reskilling talent to ensure they are “equipped and ready for the future.” The CHRO has played a key role in the organization’s transformation, rolling out initiatives focused on acquiring emerging skills, reskilling the workforce and driving an agile operating model.
LaMonica’s perspective underscores the evolving role of HR in not just engaging talent holistically, but proactively reskilling the workforce to adapt to disruptive changes, like artificial intelligence.
Source: Forbes
