Low pay isn't causing people to quit their jobs — toxic workplace culture is

Now hiring sign outside restaurant saying 4 positions open

Steve Pfost/Newsday RM via Getty Images

  • Compensation isn't the biggest factor in an employee deciding to quit, a new analysis found.
  • Toxic workplace culture is 10.4 times more likely to contribute to an employee leaving.
  • Retail workers are the most likely to quit, but firms like SpaceX have also had a high quit-rate.

Workers are quitting their jobs in record numbers. But what's nudging them out the door isn't low pay — it's toxic workplace culture. 

That's according to a new analysis of more than 1.4 million Glassdoor reviews, which found that a toxic culture is 10.4 times more likely to contribute to an employee leaving than compensation. That culture includes failing to prioritize diversity, equity, and inclusion; unethical behavior; and workers feeling disrespected, according to the report.

"Compensation is at best a moderate predictor of attrition," Donald Sull, a co-founder of analytics firm CultureX, which performed the analysis, told Bloomberg's Ella Ceron.

The analysis, which was published Tuesday in MIT Sloan Management Review, focused on reviews posted between April and September 2021 for large for-profit companies that employ roughly 25% of private-sector workers.

The data showed that apparel retailers are losing the highest number of workers. Retail employees had an average attrition rate of 19% during that six-month period, and retail employees quit at a rate three times higher than airline workers, medical device makers, and health insurance employees.

The analysis lines up with stories from retail employees who have felt pushed to the brink after nearly two years of working through a pandemic. As Insider's Áine Cain reported last June, workers are walking off the job in frustration, or "rage-quitting," over factors like workplace culture and pay. 

But it's not just retail jobs that are losing employees — the "Great Resignation" is hitting white-collar industries like management consulting and software as well. SpaceX, Goldman Sachs, and Netflix have all seen employees leave at higher volumes than their industry peers, which CultureX analysis attributes to their focus on innovation over workplace culture.

Tens of millions have quit in the last year

Throughout 2021, workers quit in record numbers: By December, 38 million workers total had quit their jobs, including 4.4 million in September alone. 

Even the number of workers daydreaming about quitting seems to have grown in recent months. An October survey by job search site Joblist found that nearly three-quarters of workers were actively thinking of quitting — a separate Joblist survey found that 58% of hospitality workers alone were hoping to quit.

But there is some good news for employers looking to hang onto their workers: what keeps employees at their jobs is predictable schedules, growth opportunities, and recognition, Sull told Bloomberg.

Global surveys from consulting firm McKinsey & Company found similar results, as Insider's Rebecca Knight reported. Employees who don't feel valued at their jobs or didn't feel like they belonged within their organization were more likely to want to leave.

"Employees are not leaving because the grass is greener elsewhere — they're leaving because they're disillusioned and unhappy," Aaron De Smet, a senior partner at McKinsey who authored the research, told Insider. "There's a huge labor force out there that's longing to be inspired."

Read the original article on Business Insider

[Author: [email protected] (Avery Hartmans)]

Tags: Spacex, Careers, Trends, Bloomberg, Netflix, Mckinsey, Employee Retention, McKinsey Company, MIT Sloan Management Review, Ella Cerón, Donald Sull, Avery Hartmans, Bloomberg Global, Sull, Aine Cain, Toxic Workplace, Rebecca Knight, Great Resignation, Labor crisis, Rage Quitting, Aaron De Smet, Steve Pfost Newsday, Getty Images Compensation, SpaceX Goldman Sachs

Source:  https://www.businessinsider.com/workers-quitting-toxic-culture-low-pay-analysis-2022-1

November 7, 2021 at 8:42 AM There's a straightforward way for businesses to attract young workers in a competitive labor market: affordable childcare
July 16, 2021 at 1:42 PM Walmart workers reveal the most shocking part of their jobs, from customers snacking in the store to people trying to return boxes filled with bricks or well-worn underwear
June 13, 2021 at 8:33 AM Restaurant workers are quitting at record-high rates, and it could force their employers to raise wages, experts say
June 5, 2021 at 7:08 AM Workers are 'rage quitting' their jobs as a tightening labor market forces employers to take note of unfavorable conditions and low pay