Quantifying the disconnect between employers and employees

Roberta Fusaro: Bonnie, thank you for joining the podcast.

Bonnie Dowling: I’m excited to be here, Roberta. Thank you for having me.

Roberta Fusaro: It seems like companies can’t find enough workers, and they can’t fill jobs fast enough. It also seems like we’re seeing a lot of people who are still leaving companies at just as great a rate. What did McKinsey’s most recent research on the Great Attrition reveal about these comings and goings?

Bonnie Dowling: This is our second or even third installment of the Great Attrition/Great Attraction research. This time, we surveyed over 13,000 individuals from six different countries. We looked at Australia, Canada, India, Singapore, the UK, and the US, across 16 industries and included people across all ages, as well as incomes.

We found that people are continuing to quit their jobs. They are going to different industries. They are leaving the workforce entirely. These things haven’t necessarily changed since our original research despite the fact that the economy and the world has changed, which begs a question about what’s really going on and the disconnect between employers and employees and why we haven’t been able to fix that.

Roberta Fusaro: As you mentioned, we’ve been looking at labor trends since the onset of COVID-19. Are these numbers much different? Are things getting any better?

Bonnie Dowling: We did this research to understand what those trends were and what was happening, especially as we saw some things happen in the broader economy, like economic uncertainty overall.

However, what we’ve seen is, when it comes to worker mentality, it has not caused a change. In August 2021, when we ran this research and a very similar survey, 40 percent of employees said they were at least somewhat likely to leave their jobs in the next three to six months. When we ran this research again April 2022, we found that the same amount were at least somewhat likely to leave their jobs in the next three to six months.

Roberta Fusaro: Is this true across the board? Is this true across all industries? Is it true at all levels?

Bonnie Dowling: There’s some variation. What’s interesting about this fundamental shift that maybe is not a trend, is it is striking across all levels, from frontline employees to executives. It’s also striking across all industries. Yes, you see higher churn in areas like retail or hospitality that historically have always had higher churn. But in finance or insurance organizations you’re seeing high levels of churn as well.

Roberta Fusaro: In the report on the Great Attrition research, you and your coauthors mentioned that “The tried and true approaches to finding and keeping employees aren’t working anymore.” Why is that?

Bonnie Dowling: Compensation is table stakes. If you’re not offering a competitive wage, you’re not in the game to start with. But it’s not enough anymore. What we’re seeing is there are different types of people who are looking for different things, especially those who’ve stepped out of the workforce entirely.

What’s interesting right now is we can’t afford to ignore those who have stepped out. Why? Because there are not enough people looking for jobs. There are not enough people in the workforce to fill the number of jobs we have openings for, at least not in the US.

Five worker personas

Roberta Fusaro: What’s most fascinating about the most recent Great Attrition research is that you’ve identified these worker personas, breakdowns of what different types of workers might be looking for in the workplace, and therefore what employers need to do to attract them. How did you come up with these personas?

Bonnie Dowling: We started to look at those who had quit jobs without a job in hand, and thus had taken a step out. We also looked at those who quit jobs without a job in hand but returned to the workforce and those who had quit and returned to different industries.

We looked at a variety of people who had left their jobs over the course of the pandemic. And we did a cluster analysis around what they said would either bring them back into the workforce, would bring them back to a traditional job within the workforce, or what had brought them back. That’s what allowed us to start to identify these different groups.

Roberta Fusaro: What are the personas?

Bonnie Dowling: There are five: the traditionalists, the do-it-yourselfers, the idealists, the caregivers, and the relaxers.

Roberta Fusaro: Let’s start with the traditionalists. Who are they, and what are they looking for in the workplace?

Bonnie Dowling: These are the folks who didn’t quit their jobs during the pandemic. If they did quit, they moved immediately into another very traditional job. They’re the folks who are motivated by the same things that motivated us in 2017 and 2019. They’re dependable for employers looking for employees. They want a clear path to advancement. They want competitive compensation. They want a workplace where they enjoy their colleagues and have inspirational leaders.

Roberta Fusaro: What’s tough about attracting and retaining this type of employee, if anything?

Bonnie Dowling: What’s tough about traditionalists is there’s not enough of them left. If we think about how many people have quit their jobs over the course of the pandemic, in the US alone it’s about a third of the workforce. That means only about two-thirds are what we would classify as traditionalists.

Given the number of job openings we have today, which is about double, even in our most recent numbers from June, even those ones point to there being almost double the number of job openings as there are people looking for jobs. That means you have to look beyond the traditionalist employee. They may be easy to attract, they may be easy to recruit, but if there are not enough of them, you can’t depend on filling your gaps with only them. That’s why you need to look at the other personas.

Roberta Fusaro: Let’s hear more about the do-it-yourselfers. Who are they?

Bonnie Dowling: The do-it-yourselfers are a group of people who are still working, but they’ve gone on to start their own businesses or become contractors or join the gig economy. They tend to be in the 25- to 45-year-old age range.

They really value flexibility, meaningful work, and compensation. To get this group back, you’re competing with them, because they’ve created something for themselves that’s paying the bills, that’s providing them a sense of purpose, and gives them all of the flexibility they could ever want, because they’re their own boss. Getting them back means you’ve got a bit of an uphill battle, but it’s also probably the largest group out there.

Roberta Fusaro: How do companies then compete with this new set of competitors?

Bonnie Dowling: Exactly. How do you prove you’re a better boss than someone is to themselves? It’s going to be a challenge for sure. Companies need to emphasize their sense of purpose and their mission.

The other thing companies can offer that is difficult for an individual upstart is thinking through your full benefit package. Not just your compensation, although having a steady, more uncertain-economy-proof compensation package is helpful.

You also have to think through what benefits you have that are different and more attractive. Beyond that, one of the key things individuals get by working for themselves is flexibility. I started hearing executives talking about employees leaving in droves when they told me they’d announced their return-to-office policy. They thought they were being flexible by offering things like “Three days in office, two days’ work from wherever you want. It just can’t be Mondays and Fridays.”

They were shocked to see people quit. And the first thing I said was, “Well, you’re sending the inherent message that you don’t trust your employees not to take a four-day weekend when you put in that policy.” They were a bit confused by that but started to recognize that maybe that wasn’t the message they wanted to send to employees that had kept the lights on through the pandemic.

Now, as those return-to-office policies and approaches are starting to materialize, we see more people and more organizations thinking through what that’s going to look like, even if it is going to change and evolve as the virus continues to change and evolve. If you don’t take into account flexibility—and not just flexibility of location but also the time of work, how we work, all of those pieces—you will not be able to attract the do-it-yourselfers back.

Roberta Fusaro: What are caregivers looking for, and who are they?

Bonnie Dowling: It probably doesn’t come as a surprise that flexibility is going to be a very important factor for caregivers. They’re predominantly women. They’re aged 18 to 44. They’re folks who have children at home or maybe elderly parents. They need flexibility to live in both their role as a caregiver and as an employee.

What we see here are former employees who may want to return. They may have enjoyed that sense of purpose and the ability to advance that they got from their career. They may be traditionalists at heart, but what they found over the course of the pandemic was that it wasn’t working to both be a parent or a child with aging parents. It wasn’t working to be a caregiver and employee.

If you think about things like the skyrocketing cost of childcare and how it became so unreliable over the course of the pandemic, and then you think about how many employers have punitive policies in place if you’re tardy or have an absence, it started to not have the right ROI.

If I’m spending the majority of my after-tax paycheck on childcare and yet I’m also getting dinged at work because I get a call from the school at 7 in the morning that says, “We’ve gone virtual for the day because there is an exposure,” the ROI isn’t there.

So people started stepping out. If we want to attract them—and many of these individuals would like to return, it seems—we need to think about how we can truly create flexibility and how we can align the benefit packages we offer to their needs. So you see the increased provision of childcare, of on-site childcare, of benefits like that.

One of the other benefits I really liked when I spoke with a company recently was thinking about how they could offer housecleaning or landscaping benefits. And their thought was, “You know what? A lot of people would enjoy these benefits.”

It turns out that there’s a lot of things we do outside of work that don’t give us a great sense of fulfillment or pleasure or joy. And if, as employers, we can look at what some of those things are and we can help take those off their plates, we can actually give back some work–life balance and ultimately flexibility to our employees.