How leaders can prevent mass resignations on January 31
Organisations are at risk of high turnover in the New Year, as January 31 is the record day for resignations. Here’s why.
About 1.4 million Australians are very likely to quit their jobs within the next 12 months. The compounding effect of sluggish wage growth and the cost of living crisis is negatively impacting one-third of Australian workers’ job satisfaction, alongside soaring levels of stress and burnout.
Consequently, organisations are at risk of high turnover in the New Year, as January 31 is the record day for resignations.
And, it’s not surprising why. As burnout pervades Aussie workers, the end of the year offers little reprieve. Instead, fatigue often intensifies with the race towards the finish line. Couple this with the heightened social commitments of the holiday season, it’s no wonder why people finish the year feeling exhausted.
In contrast, the New Year break is typically a time to relax and set goals for the year ahead. During this period of reflection and resolutions, many look to make positive changes in their lives — spanning careers, relationships, health, financial security and beyond.
Upon returning to work, for many the feeling of optimism can quickly turn to deflation. As the unwavering demands of the role return, the monotony of day-to-day tasks settles in, a lack of inspiration for the strategy ahead decreases motivation, and for those who’ve already felt disconnected from their organisation, this can be the final straw to look for something new.
So, let’s explore what’s driving Australians to quit their jobs and what preventative steps leaders can take to stop a wave of resignations come January.
Reasons why people quit
Underperforming leaders cost jobs. Almost half of first-time managers underperform, according to CEB research. All while, frontline managers who are responsible for up to 80% of an organisation’s staff delivering its product or service, often receive insufficient support and guidance to manage people effectively.
Many of us can relate to the experience of reporting to an underperforming leader. From mishandling feedback and criticism, micromanagement, insecurity, unclear directions, emotional outbursts, and more. The impact on direct reports is often inescapable, leading to low employee morale, poor performance, decreased job satisfaction, and as a result, people leave.
Beyond poor leadership, there are a range of other factors that contribute to a person tendering their resignation, including but not limited to; adequate compensation, growth opportunities, remote work, work-life balance, sense of belonging and alignment of personal values to the organisation’s purpose.
Unclear career development is particularly detrimental to an employee’s performance, motivation, and engagement. Beyond a lack of clarity for personal growth, it ultimately makes people feel undervalued, underutilised, and unclear on their future with the company. In many organisations, these vital career conversations might only occur during performance reviews once a year, or worse yet, not at all.
What makes people stay
There’s no-one-size-fits-all approach to employee retention. People will stay within an organisation for a myriad of professional and personal reasons. However, there are universal qualities of workplaces with high retention rates that all leaders should pay close attention to.
In these environments, people feel valued for their contributions, are adequately compensated for their roles, report to a good leader, have autonomy in their day-to-day tasks, and clarity on their growth opportunities.
All while, they feel psychologically safe to be themselves, receive enhanced employee benefits, have hybrid work flexibility, the ability to focus on health and wellbeing, can access personalised learning and development (L&D), and ultimately feel purpose in their roles.
Actions for leaders to boost retention
Implement regular career conversations
Two-thirds of managers reportedly fail to support their people’s career development. The importance of regular career development conversations with clear expectations and goals cannot be overstated.
Managers need to regularly embed career development conversations with direct reports in one-to-one catch ups, or at least once every three months. However, leaders need to ensure managers are properly equipped to have these conversations effectively with guidance and frameworks.
Career conversations should not solely focus on promotions, rather they should cover development goals, building new skills, and understanding what aspects of the role energises the individual and important growth areas to them.
Successful career conversations ultimately empower the person to own their development, motivate them to exceed expectations, and ensure they feel valued for their contributions.
Champion psychological safety
90% of Australian employees believe mentally healthy workplaces matter. Psychologically safe workplaces take time, effort and accountability. In this environment, people feel comfortable being themselves, asking for help, and admitting to their mistakes.
For leaders to create psychological safety, they need to lead with empathy, not ego, ensure everyone feels heard, admit their own fallibility, set clear expectations, advocate for diversity, equity and inclusion (DEI), promote self-awareness, create space for new ideas, and celebrate wins.
Prioritise personalised L&D
Traditional L&D has an engagement problem. How quickly in the middle of a group seminar do people begin reaching for their phones? Distracted by emails, notifications and calls, the benefit of the activity is mostly lost.
Couple this with the Forgetting Curve which highlights the rate at which we forget new information — as within 24 hours of learning something new, we forget almost half of it. L&D shouldn’t be a one-time event.
Rather people need personalised development opportunities to set specific developmental goals and access an accountability partner to achieve them. Beyond this, they need time and resources to focus on new skill development, support to reinforce new behaviours, and the ability to apply their new skills on the job.
With the end of year fast approaching, leaders should not be caught off guard by the resignation wave in January. Rather they should act now to ensure their people feel valued for their contributions and can see a future at their organisation come the New Year.
Simon Moylan is a registered organisational psychologist and the co-founder and managing director of Hellomonday.
