By Holly Perryman, President and Human Resources Consultant at HR Managed, LLC
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September 15, 2023
What is the cause of the current labor shortage and how do we fix it? That is the question I am repeatedly being asked these days. Most employers seem to think the issue is pay. I disagree. I have been in HR for 23 years, which means I have completed 23 years of exit interviews, have seen 23 years of turnover statistics, and reviewed hundreds of comments on employee engagement surveys. While compensation is always on the list of reasons people leave a job, pay is rarely the primary reason. So, why does an employee leave a job? The reasons that top the list include dissatisfaction with a manager, lack of work/life balance, lack of opportunity, personal/family challenges, or a negative workplace environment. In short, people consistently leave a job when it does not support their home life, happiness, and well-being. It boils down to quality of life. Now, factor in the mental health challenges that are occurring in our society. According to the CDC, in June 2020 40% of U.S. adults reported struggling with mental health or substance abuse. The National Institute for Mental Health reports that 1 in 5 U.S. adults live with a mental illness. The CDC reported in 2019 that suicide was the tenth leading cause of death in the United States across all age groups. It is the second leading cause of death for ages 10 to 34. Incidents of stress, depression, and anxiety are on the rise. And then Covid came along. The resulting shut-down allowed us the time to focus on our families and to reevaluate our priorities. This great awakening is leading people to seek better work/life balance, more time at home, more emphasis on family, and enjoyment in their daily lives post-covid. I recently filled a manager level position for a client. In the phone interview I asked each candidate why they were looking to leave their current position. Out of 10 candidates, only 1 said he was leaving to make more money. Here are the reasons cited by the other 9 candidates: Poor work culture and lack of good leadership Not having a properly staffed team to get the work done Poor company culture and decisions made by corporate office to reduce benefits Desire for a better work schedule & the chance to work with a smaller, tight-knit team More opportunities for growth and sharing knowledge with a team Opportunity for growth and better company leadership Improved work/life balance; tired of working overtime and missing out on time with family To work for a company that is about more than making money, wants a job that has a purpose and helps people Works by himself and wants to be a part of a team There is a theme in those responses: leadership, teamwork, and healthy, supportive work environments. Yes, this is a small sample size, but it is consistent with responses I have heard repeatedly from employees over my 23 years in HR. Compensation is certainly a factor in jobs. It should go without saying that employers need to pay appropriately for the work performed. Nobody, regardless of the title or duties, should be expected to show up every day, work hard, and be underpaid. Every employer should know the market value for the work being performed. Employers need to have a clearly defined compensation program that intentionally pays employees according to work performance and time in the role. We are seeing employers randomly throwing money at the labor shortage and judging by all the Now Hiring signs along the roadways, it is not working. Overpaying for labor skews the entire compensation system and drives up the cost of goods and services. That is not helping anyone. My ask to employers is to stop throwing money at the problem. Human beings require more than thoughtless bonuses and impersonal paychecks. They want coworkers who turn into friends. They want a boss who cares as much about their home life as their work life. They want to learn something new then apply that knowledge to better themselves and others. They want to leave work each day feeling like they did something worthy of their time. And they want to have a reason to go back and do it again tomorrow. As the song says…can’t buy me love. Employers cannot just throw money at people expecting them to be happy, devoted employees. Employers need to provide great leadership that inspires great work. Supervisors should take the time to help each person see how they impacted the company with their efforts. Policies that restrict flexibility should be reviewed to see where a softer approach can support the whole employee and still get the job done. Before asking for the end of the month numbers, ask the person how they are doing…and be genuinely interested in their answer. We need to create workplaces that build relationships rather than profits with the understanding that healthy employees create healthy companies. And healthy companies succeed.