While many of us have taken educated guesses at the various causes and remedies for the large number of employees leaving their workplaces, MIT Sloan Management has taken a more pragmatic approach. They have analyzed 34 million online profiles of those who left their employer—for any reason—between April and September 2021. As expected, apparel retail tops the list, but not far behind are management consulting, internet, and enterprise software which all align with our business here at P&C. Are we concerned? Not really. Should you be? Perhaps. Here’s why. Expectedly, toxic corporate culture is 10.4 times more powerful than compensation in predicting a company’s attrition rate. However, surprisingly, employees are more likely to exit from innovative companies. (The attrition rates of Nvidia, Tesla, and SpaceX are three standard deviations higher than those in their respective industries!) Surprising or not, these predictors are not easy to change. On the positive side, there are some viable remedies. Providing employees with lateral career opportunities, for example, is 2.5 times more powerful than compensation. At P&C, we have intuitively known that for a long time and take advantage of being part of a large multi-national to enable our employees to vary their career experiences, while remaining loyal to our corporate family. The Great Resignation could be an opportunity for you to sweep up highly desirable employees from your competitors. Want to discuss your retention strategy? Please reach out to me.
