An antidote to the Great Resignation

Four steps senior executives can take today

CEOs might study Maslow’s hierarchy of needs to understand the rationale and efficacy of one possible antidote: create a culture of belonging built one high-belonging team at a time. 

For decades, employees largely defined themselves through the lens of their work — what they did at their place of employment rather than why they did it. However, after 18 months of the pandemic, workers are redefining what’s important to them and making decisions accordingly. To succeed going forward, we urge CEOs to heed the shift in workers’ mindset and expectations, understand its root cause and transform their organizations.

Understanding the Great Resignation

On a macro level, the pandemic gave workers a chance to re-evaluate their lives, values, needs and circumstances. Many, to their surprise, were able to succeed in their jobs and experience greater purpose and meaning while working remotely. Those who hunkered down, grateful for a job through the crisis, are finally taking a breath and considering their options. Many are frayed, burned out from the endless workday. Others have discovered a work-life-home balance that they intend to keep even if they have to change jobs to do so. They believe that having more time and flexibility for family, hobbies and exercise is more than just a nice-to-have — it’s essential to enjoying a full, productive life. This sentiment, combined with the fact that competition for experienced workers has reached a fever pitch during the pandemic,¹ has inspired a mass exodus of millions of employees:

This phenomenon is known as the Great Resignation,⁴ and for savvy C-suite executives, it’s an opportunity to transform company culture, reimagine recruitment and retention strategies, and drive value for the long term.

Heeding the wake-up call

Many companies are responding with well-intended transactional fixes such as increased pay, more flexible hours and improved virtual collaboration technology. These transactional fixes do matter to employees, just less than employers think.⁵ The top three reasons employees cite for quitting are: they do not feel valued by their organizations (54%) or their managers (52%) and do not feel a sense of belonging at work (51%).⁶

In contrast to transactional fixes, employees largely seek cultural and relationship transformation. According to one survey, 9 out of 10 career professionals would sacrifice 23% of their future earnings — an average of $21,000 a year — for consistently meaningful work.⁷ The study also found that employees value salary, benefits and company leadership but are demanding greater purpose, meaning and belonging in their work-life balance. This gap between what workers want and how employers are responding is causing a leadership crisis in an increasing number of industries.

These symptoms are a wake-up call for CEOs and their boards. COVID-19 broke the back of the old inherent employer-employee contract. The pressing challenge today is determining what is required to re-imagine that contract and create a new employee value proposition (EVP) that addresses (and possibly reverses) the symptoms of the Great Resignation.

Analyzing Maslow’s hierarchy of needs 

Abraham Maslow was an American psychologist who developed a hierarchy of needs to explain human motivation and behavior. His theory comprises a five-tier model of human needs in which needs lower down in the hierarchy must be satisfied before individuals can attend to needs higher up (see Figure 1).

Figure 1

Before the pandemic, organizations’ EVPs generally satisfied the first two levels of Maslow’s hierarchy: in return for dedicating a large portion of their careers to a single organization, workers accepted a standard package of benefits that addressed (i) their level 1 physiological needs: food, clothing and health benefits and (ii) their level 2 safety needs: job security and a regular paycheck.

According to Maslow, workers, as humans, are intrinsically motivated to reach for more than just levels 1 and 2. We are programmed to also strive for levels 3, 4 and 5. Yet, most pre-pandemic organizational cultures and leadership styles failed to encourage or support their workers’ quest to feel they belong, are valued, and have the tools and training to reach for higher self-esteem.

Recent research supports Maslow’s conclusions. For example, social belonging is a fundamental human need, “hardwired” into human DNA.⁸ When workers feel that they belong, benefits to employers include, among other things, better job performance, lower turnover risk and fewer sick days.

During the pandemic, workers were able to do their jobs virtually and experience more meaningful time with families; focus on hobbies; work out more; and reflect on what is most important. They had an epiphany that it’s possible to be a productive employee and satisfy need levels 1 through 4. This in-pandemic employee experience — juxtaposed with employers’ reticence to adjust to new employee expectations — created the gap that is the root cause of the Great Resignation.