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Retaining talent amid the Great Resignation

The Great Resignation — a massive reshuffling ongoing in the U.S. labor market — has created a new and very competitive economic reality in which American employers struggle to fill a record number of open jobs.

In such a challenging economic environment, American companies have been forced to rethink their strategies that focus on attracting, recruiting, and retaining their human capital.

Although the negative impact of the Great Resignation has been recorded across different industries and, to some extent, impacting all employers, it should not affect all companies equally. While well-managed businesses may experience some negative consequences, “bad employers” — those characterized by poor management practices — likely will be most impacted. All managers across different sectors should consider leveraging the following solutions:

  • Go back to the principles of good management: Research shows that employers who create a good work environment are more likely to retain their workers. Your company should create and communicate transparent processes for promotion, pay increase, and career advancement. Use the performance management process to ensure that all employees understand their performance objectives and know how their individual and group efforts support the firm’s success. Empower employees by providing them with all necessary resources.
  • Invest in your managers: A firm cannot sustain its success without high quality managers. Provide your managers with all relevant professional training, ensure that they keep updating their managerial skills, and be very selective when hiring new managers.
  • Talk about money: Intrinsic motivators such as challenging tasks and interesting projects can increase employees’ job satisfaction. Nonetheless, in the current inflationary environment, they are most likely concerned about meeting their basic needs. A recent paper published by the Academy of Management Journal reveals employers tend to discriminate against employees who show some interest in their pay and benefits. Such a strategy is always wrong and can be especially problematic in this environment.
  • Finally, consider Employee Value Propositions (EVP): Past research describes EVPs as unique arrangements of employment conditions (e.g., flexible work arrangements, flexible hours, Zoom, extra benefits, etc.) that companies can offer in exchange for employees’ skills, knowledge, and abilities. Good employers should try to better understand the unique circumstances of each worker and tailor individualized employment conditions that will satisfy specific needs. Using EVP practices during the Great Resignation may become especially advantageous by attracting a high quality of talent, in turn helping your company fill critical job openings.

 Radoslaw Nowak is associate professor of management at the New York Institute of Technology.