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The Great Resignation, Employee Disengagement & Organizational Behavior

If you are active on social media, you will have seen the term 'The Great Resignation'.

Is it a flash in the pan or should you be concerned by how it will impact you, and your company?

We conducted some analysis within our client network, the results showed "an 89% employee retention rate (based on voluntary turnover) throughout the pandemic, compared to the market average (UK, Europe and US combined) which averages 71%.

The 3rd party external analysis paints a similar picture, and overall impact begins to form when you look closer at organizational behavior, workplace culture and cross-functional alignment.

Our view is that people and organizations who are being impacted by 'The Great Resignation' have a combination of alignment and culture issues, which could, and should have been fixed before the impacts on our working lives created by the pandemic.

If you care about your employees, the environment you create for them to work in and focus on creating and maintaining a positive workplace culture, then you should have nothing to worry.

On the other hand, if you are part of a company which have neglected your organizational culture and cross-functional alignment for too long, you might be facing the cliff of 'employee disengagement' or worse still, your team are already completely disengaged.


What is 'The Great Resignation'?

Unlike many notable events that have defined the workplace throughout history, the Great Resignation isn’t being fuelled by equality or diversity, nor industry conditions or pay related issues.

The Great Resignation is a workplace issue, a shift in working culture and a disconnect between what employees really want and what promises employers have broken.

When we look at some of the recent research, A new Gallup analysis finds that 48% of America's working population is actively job searching or watching for opportunities, and statistics for the UK and Europe are very similar.

Many countries have reported between April to June 2021 the highest rates on record of people quitting their jobs.

How is organizational behavior and startup culture impacting ‘The Great Resignation’?

Whether you are an employer or an employee, the Covid-19 pandemic forced change upon a global workforce. As we emerge from uncertain times, millions people are enjoying the fact they can return to an office and a normal working routine.

While millions of people who were already working remotely before the pandemic arguably felt the least disruption in their day to day to work.

Which leaves the millions of workers across the globe, who have been awakened to the work life balance, increased family time and reduced commuting benefits that remote working can bring.

But the company culture impact on employees goes much further than just having the ability to work from wherever you want. Or reducing your daily commuting time.

To create a positive and highly engaged organizational culture you must consider some of the dynamic shifts in employee productivity behaviors according to Jacob Morgan (thefutureorganization.com).

Futureoftheemployee

When we consider the employee perspective of the workplace culture, we also need to consider the employer perspective. And through the pandemic three distinct types of employer have emerged.

Remote first culture

These organizations already had a maturing remote-first workplace culture. With a solid backbone of team communication tools, cross-functional collaboration software and processes in place to empower employees to get their best work done.

Remote adoption

These organizations have adopted a remote-first or hybrid-working culture, and this will remain part of their culture moving forward. While some organizations have become more productivity through the adoption of digital team collaboration tools, many organizations are still finding their feet to improve or maintain high levels of team collaboration efficiency.

Remote revoked

These organizations are playing a significant role in 'The Great Resignation'.

Employees hired during the pandemic or existing employees who were made promises of flexible or hybrid-working are now finding they are being forced back to an office environment.

Employers who are following this path, highlight the fact, when your culture is misaligned, employee disengagement increases.

Today more than ever, employees have the power, and your organizational behavior and workplace culture are the single most defining factor for talent acquisition and talent retention.

Improving strategy and culture alignment

Strategy and culture alignment is fast becoming one of the most important organizational goals for startup founders to focus on to maintain organizational viability and effectiveness.

Where strategy offers a logic for organizational goals, objectives and key results to focus people around them. Culture amplifies these strategic goals through shared values and beliefs and guides activity through cross-functional collaboration.

When strategy and culture aligns the net result provides clarity and focus for collective action, faster decision making and better business outcomes. It relies on initiatives, processes and sets of choices to mobilize people and can often be amplified by both concrete rewards for achieving goals, inter-team recognition and set values that encourages shared success.

Ideally, it also incorporates adaptive elements that can identify and analyze external factors and sense when changes are required to maintain continual improvement and growth.

Leadership goes hand-in-hand with strategy and objectives, and most leaders understand the fundamentals and can define a solid strategy.

However, culture, is a more elusive lever, because much of it is anchored in unspoken behaviors, mindsets, and social patterns. But it is important to remember, your strategy impacts your culture, and your culture empowers your strategy.

The future of work is here, and culture, strategy, talent retention, revenue growth, competitive advantage and leadership behaviors are inextricably linked.

The Rising Employee Disengagement Crisis and it's financial impact

The percentage of ‘Disengaged Employees’ continues to rise, and employee disengagement is a costly business, according to Gallup analysis:

  • The lost productivity of not engaged and actively disengaged employees is equal to 18% of their annual salary.
  • For a company of 10,000 employees with an average salary of $50,000 each, disengagement costs $60.3 million a year.
  • Replacing workers requires one-half to two times the employee's annual salary. So, it costs $9,000 a year to keep each disengaged worker and between $25,000 and $100,000 to replace them.

This all spells bad news for talent acquisition and talent retention when you consider that each new hire is 65% more likely to join a disengaged team and 38% more likely to be looking for a new job within 90 days.

(Source: Gallup)

According to Perkbox in 2018, the UK was on the brink of an ‘Employee Disengagement Crisis’. In 2021, it has become a reality.

Disengaged employees can be characterized by easily identifiable traits and behaviors.

They Lack Motivation and Productivity

  • Just 35% of employees rate their productivity as 'strong' 

Disengaged employees are not emotionally committed to, or proud of the organisation they work for.

They tend to lack motivation, rarely go above and beyond to contribute to common business objectives and are unproductive.

This affects both the quality and quantity of work output.

They Don't Act as Brand Advocates

  • 59% of employees wouldn't recommend their organisation as a good place to work

Employees have the most intimate knowledge and experience of your business.

In an era of anonymous and independent online reviews, they are your most powerful source of brand promotion.

Disengaged employees are unlikely to act as brand ambassadors, to expand the company’s social presence and to leave a positive digital footprint.

They Lack the Desire to Collaborate

  • Engaged employees are 18% more likely to collaborate and work together as a team 

Disengaged employees are less willing to collaborate with teammates and to help others, creating an environment of bad blood and dissatisfaction, and damaging overall team morale.

They Are Eager to Leave 

  • 23% of UK employees are currently looking for a new job 
  • Disengaged employees are four times more likely to leave their jobs
  • UK turnover rates is expected to rise by 14.6% - 18%

High levels of employee turnover raise recruitment and training costs, demanding managerial and HR time.

The Financial Impact of Disengaged Employees

A disengaged workforce incurs immense financial costs to a business. 

It is estimated that disengaged employees are costing the UK economy £340 billion every year in recruitment costs, sick days, productivity, creativity and innovation.

(Source: Perkbox)

Better Business Outcomes with Flowtrace

With Flowtrace Analytics you can improve your strategy and culture alignment, make faster data-driven decisions and benefit from highly motivated and engaged teams.

Our client research shows, organizations who have higher than average strategy and culture alignment, productivity and cross-functional collaboration, maintained an 89% talent retention rate (based on voluntary turnover) throughout the pandemic, compared to the market average (UK, Europe and US combined) which averages 71%.

Schedule a demo today and find out how we can help your organization achieve better business outcomes.

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