Culture clash: Should I stay or should I go ?

Culture clash: should I stay of should I go now? Lessons from the great resignation.

It will be 40 years next month since The Clash released the song “Should I stay or should I go ?” https://youtu.be/xMaE6toi4mk which is a suitable anthem of our time as we experience what is variously phrased as the "great resignation", the "big quit" or  more optimistically the "great talent re-attraction". Either way organisations have never found it so difficult to acquire, develop and retain the critical capabilities they need to be successful. The war for talent is long over – talent won, and organisations realize that their ability to execute their business strategy will be seriously compromised without a radically different approach to their rebuilding of the human experience at work. In this article I aim to distill some of the key themes and identify opportunities ahead.

While statistics suggest that the great resignation is a global phenomenon with a 2 x increase in the number of job postings and a 25% increase in those actually changing jobs globally (APAC 60% EMEA 20% US 28% LinkedIn Oct 2021 vs Oct 2019) there are undoubtedly winners and losers. For many organisations an inability to fill key roles that allow them to operate let alone transform is creating significant challenges. The skyrocketing demand for recruiters is an indication of how desperate the situation is becoming as organisations seek to replace leavers and acquire critical skills.

Conversely many organisations experienced improved retention and a boost in engagement levels through 2020/2021 as some adopted more decentralized, empowering and authentic leadership styles and sacrificed profits to protect workers, demonstrating that their people were indeed their greatest asset. This was reciprocated. Gallup reported the highest levels of engagement in the US in 2020 (36%) with increased levels of engagement in many of the worlds leading companies while at the same time the proportion of actively disengaged employees declined. Engaged employees reported to be 87% less likely to leave their place of work, while disengaged employees were estimated to cost their employers $450bn each year in the US alone. Improvements in retention, productivity, customer service and discretionary effort were reported by many, as their people moved into remote working conditions and navigated challenges that many described as "impossible" pre-pandemic.

"If you say that you are mine , I'll be here 'till the end of time"

According to a a global study of 11,800 people by Qualtrics (Dec 2020) a sense of belonging emerged as the strongest driver for workplace engagement though the pandemic period.

In the study 91% who felt they belonged were engaged at work. For those organisations that can create a sense of belonging that transcends the employment contract the prospects for a highly engaged and retained workforce look good. Factors that contributed to a high sense of belonging centred around the core human experience at work and included: open and honest communications, feeling valued and supported especially in change and safety to be yourself and fulfill your potential no matter who you are.

"One day it's fine and next it's black. So if you want me off your back"

COVID undoubtedly created a tipping point and accelerated trends that were already underway. A recent Wilson Towers Watson survey highlighted the challenges COVID has placed on the human experience at work: 56% of employees are fully remote or in hybrid roles vs 9% 3 years ago, 46% of organisations cut people or hours, 44% of companies restructured (31% major transformations), 39% cut pay / benefits. Conversely analysis of the Russel 3000 Companies in the US showed a median 3.4% pay rise for CEO s during the pandemic (Lance Lambert, Fortune Magazine August 2021). 647 of the 3000 company CEOs committed to take cuts of which 79% actually took a cut in salary. Most took salary cuts of less than 50%. There were notable exceptions - Chris Nassetta CEO of Hilton Worldwide Holdings and Arne Sorensen CEO of Marriott International both announced they’d forgo their entire 2020 salary.

How organisations responded in COVID in relation to their people did not go unnoticed. McKinsey (2021) reported that 2/3 of employees in the US claimed that the experience of COVID had driven a “deep reflection in their purpose in life”, nearly 50% are reconsidering the work they do and Millennials are x 3 more likely to be re-evaluating their work. It is worth remembering that Millennials are on their way to make up 75% of the global workforce by 2025.

“If I go there will be trouble and if I stay it will be double”

As people leave organisations they create critical gaps which is big trouble for organisations where increasingly intangible assets; like capabilities, make up the value of the company. McKinsey (2021) reports that 43% of organisations have critical skill gaps right now which will rise to 87% in the next 5 years. 75% of leaders say that capability building is a key priority for long term growth, up 19% from 2019. And while people leaving is a headache, upskilling your existing people is seen as an even bigger challenge than hiring. Fortune magazine reported in 2021 a Salesforce survey of 23,661 workers globally that looked at digital skills. Of those surveyed 76% did not feel prepared for the future, only 28% were actively involved in digital skills training with just 17% considering themselves advanced in workplace digital skills. Organisations require ongoing upskilling to stay competitive and while 51% in the McKinsey survey expressed interest in acquiring new skills there were large generational differences between those who actively sought out upskilling opportunities: Gen Z (83%) vs Baby Boomers (12%). If you can’t find ways to support and encourage the ongoing upskilling and reskilling of your people - your trouble is indeed double.

"This indecision's bugging me (Esta indecisión me molesta). If you don't want me, set me free (Si no me quieres, librarme)"

So, for those that have not found a sense of belonging or the COVID experience has fundamentally changed their aspirations and purpose, what are the factors that are most correlated to people leaving ? According to research by Korn Ferry (2021) the top 3 reasons to leave are: pay (29%), personal development(26%) and work life balance (15%). Research from MT Sloan ( MT Sloan Management Review Jan 11 2022) suggests that while pay can be critical for some; it is a "toxic work culture" that is the greatest predictor of turnover . Pay is critical and I do believe for the vast majority of people working; we are doing so driven by financial necessity - the financial component can't be understated.

When pay is "enough" then other factors kick in and this is where a decision is to be made. Work life balance is perhaps where indecision may lie for many as they re-evaluate what they are prepared to "trade" for that pay ( the daily commute is just one example of trades we are more sensitive about making post COVID). If there is an increasing rejection of the trade organisations have traditionally relied on; pay, promotion, career, in return for your engagement and discretionary effort, then organisations will have to work much harder to create a human experience at work that adds to the the financial remuneration versus being compensated by it.

The human experience at work is going to be a key preoccupation for People and Culture teams and their organisations for years to come. The continual growth of organisational capabilities to meet rapidly evolving needs, will require integrated people effectiveness initiatives working across the traditional HR silos of resourcing, reward, learning and talent. Within the context of the overall people experience; capability building will be critical. For people; employability for life requires them to be supported to grow within the workplace, meeting both their personal and professional aspirations. For organisations; it will be a matter of urgent haste and in some cases survival to ensure they have the capabilities to continue to evolve, adapt, re-inventing themselves to meet the challenges ahead. I see the capability opportunity for organisations is to better integrate often disparate people and culture activities into a more holistic approach.

Conceptually, I see 4 broad components of building organisational capabilities that I capture in the mnemonic RUSH: Reskilling the organisation to make rapid changes to acquire totally new capabilities. Upskilling with a continuous focus on growing capabilities to accelerate performance and potential, adapting to existing and evolving organisations needs. Securing, sharing and sustaining organisational “know how” as cultural artefacts to make the most of the untapped capabilities organisation have. Hire, how do you attract the contributors both internal and external you need to be successful, incorporating the neural diversity of permanent , temporary, gig ,contingent, alumni, consultancies and partners. RUSH - defined as “to move with urgent haste” captures for me the criticality and speed at which organisations need to move. More to follow on RUSH and the specific actions in each component.

The statue of “Dromeas” - the runner, outside the Hilton hotel Athens, which inspired the concept of RUSH.

For those emerging stronger from COVID; learning the lessons the crisis had to teach us, the prize awaits - sustained high engagement, more authentic and participative cultures that promote empowered learners and capability building for organisational agility and change. For those not well positioned, there will be a growing gap between their stated business goals and their ability to execute their strategy. Whether people stay, empowered to grow with a sense of belonging or they go as part of a great talent re-attraction, organisations will inevitably learn that people are either their greatest asset or a source of growing liability.

Robin Lilley