EMPATHY AS A PANACEA TO THE GREAT RESIGNATION: IS OUR BUSINESS LANDSCAPE AND ITS LEADERS CAPABLE TO ACCOMMODATE FOR REAL EMPATHY?

KEY STATISTICS: A BRIEF OVERVIEW OF THE GREAT RESIGNATION

The “quit rate” in the United States reached a 20-year high in November 2021 (Parker & Horowitz, 2022), with more than 19 million workers having left their jobs since April 2021, thereby resulting in disruptions across businesses (De Smet et al., 2021). The U.S. unemployment rate witnessed a dramatic increase from 3.8% in February 2020 to 13% in May 2020 (Kochhar, 2020). The number of unemployed workers due to the pandemic is greater when compared to unemployment during the Great Recession, which lasted from December 2007 to June 2009 (Kochhar, 2020).

It was also found that the unemployment rate for women in May 2020 was 14.3%, higher than the unemployment rate for men, which stood at 11.9% (Kochhar, 2020). In addition, the unemployment rate for Hispanic workers was 15.5%, higher than the unemployment rates for Asians at 13.3%. Unemployment among White males stood at 9.7%, and the rate of unemployment among White women increased fivefold, from 2.5% in February 2020 to 11.9% in May 2020 (Kochhar, 2020).

Resignations were highest in technology and health care, whereas resignations decreased in industries such as manufacturing and finance (Cook, 2021).

A PERSPECTIVE

Organizational psychologist Anthony Klotz, an Associate Professor of Management at Texas A&M University, coined the phrase “the Great Resignation.” According to Klotz, work holds an elevated position in the American culture, and it is central to the identity of who one is (Kaplan, 2021). The existential crisis of business was bound to lead to an existential crisis for employees (Kaplan, 2021). The pandemic has had a profound impact and has led many to rethink where, how, and why we work (Smith, 2022). Organizational research suggests that when individuals come into contact with death and illness, it provokes one to raise existential questions, and in many instances those reflections lead one to pivot the trajectory of one's life (Kaplan, 2021). The Great Resignation has encouraged the emergence of other terms to describe the revolution we have been witnessing in work, such as “The Great Reimagination,” “The Great Reset.” and “The Great Realization” (Smith, 2022).

THE HEART OF THE MATTER

COVID-19 has prompted individuals to reevaluate their views about life, work, and how to balance them both. Retention of talent in today's environment has become a critical predicament for most organizations (Bartholo, 2022). In a recent study of more than 1,000 U.S. workers, there was a direct correlation between employee retention and the perceived level of empathy in the workplace. The study also revealed that more than 54% of U.S. workers have left a previous role because their boss was not empathetic to their struggles at work and that 49% have resigned due to lack of understanding of pressures in one's home life (EY Americas, 2022).

This moment in time has showcased how employees covet investment in the human aspects of work (De Smet et al., 2021). De Smet et al. have also underscored how employees want a renewed and revived sense of purpose in their work, social and interpersonal connections with colleagues and managers, a sense of shared identity, not merely the norm—pay, benefits, and perks—but a sense of being valued by their organizations and leadership, meaningful interactions, and not just transactional relationships.

Studies from different sources continue to allude to distressing concerns. In a survey conducted by the Pew Research Center, workers who resigned in 2021 cited low pay (63%), no opportunities for advancement (63%), feeling disrespected at work (57%), child care issues (48%), and lack of flexibility (45%), as the most common reasons for resigning (Parker & Horowitz, 2022). According to the Microsoft 2021 Work Trend Index, one in five global survey respondents have said that their employer does not care about work–life balance, with 54% feeling overworked and 39% feeling exhausted. Similarly, in a study conducted by McKinsey, findings across five countries (Australia, Canada, Singapore, the United Kingdom, and the United States) revealed that 40% of the employees were likely to quit in the next 3–6 months, and 36% who had quit in the past 6 months had done so without having a new job secured (De Smet et al., 2021). Yet another research finding explained that the top three reasons employees left their organization were (a) not feeling valued by the organization (54%), (b) not feeling valued by their manager (52%), and (c) lacking a sense of belonging (51%) (Dowling et al., 2022). Furthermore, 46% who quit expressed a desire to work with colleagues who trust and care for each other (De Smet et al., 2022).

EMPATHY: THE CURE-ALL

Researchers have underscored that empathy, a key part of emotional intelligence, is critical to being an effective leader (Bar-On & Parker, 2000; George, 2000; Goleman, 1995; Salovey & Mayer, 1990). Empathy is when an employee's personal and professional needs are being listened to, understood, and accommodated by the organization's leadership (EY Americas, 2022). Unfortunately, this soft skill has often been overlooked as a performance indicator (Center for Creative Leadership, 2020).

Katsoudas (2022) highlights that an empathetic leader regularly connects with team members, understands the way one works the best and the support one needs, and tends to delve deeper to find out how each team member is doing. Retention and engagement of employees hinges upon two core tenets of a relationship—trust and transparency (Katsoudas, 2022). Empathy, not efficiency, is the key to addressing employee burnout and a way out for organizations on the losing end of the Great Resignation (Huffington & Bates, 2022). When organizations make a “conscious decision to design around person-centric instead of business-centric experiences around empathy for their employees and customers, efficiency and effectiveness become loyalty-creating metrics instead of cost-cutting measures” and “empathy emerges as an exponential force multiplier” (Huffington & Bates, 2022, p. 1).

According to a study conducted by the Center for Creative Leadership, an empathetic leader is (Gentry et al., 2016, p. 3):

1. Sensitive to signs of overwork in others.

2. Interested in the needs, hopes, and dreams of other people.

3. Willing to help an employee with personal problems.

4. Compassionate when a team member discloses a personal loss.

COMMENTARY: BABY STEPS TOWARD LOOKING AT THE WHOLE PICTURE

The call for empathetic leadership is akin to an audial balm to soothe the frayed nerves within organizations and the global chaos, uncertainty, and loss brought about by COVID-19. At this juncture, we must raise the question: Are any of the statistics about employees and the reasons behind their resignation are surprising? Why is the Great Resignation calling for empathy among business leaders now? Our organizations have been designed, led, and managed to contribute to the bottom line, where burnout is a norm rather than an exception, working on weekends has been specified in job descriptions, and sleep deprivation has now become a global problem. So the question is one of ground reality: Can our conditioned thinking and responses about measures of success, performance, and organizational growth accommodate and respond authentically to this call for empathy among leaders? Or is it a mere sound byte? Is it a call that is transient and elicited solely by the unprecedented times we find ourselves in?

Trade journals and academic research have long highlighted the cost associated with toxic employees and high-conflict individuals and the financial and cultural ramifications within an organization. Now, let us juxtapose organizational culture with the Great Resignation. Some of the hardest hit industries during the pandemic have been apparel retail, fast food, and specialty retail, yet even within the same industry there were significant differences in attrition rates (Sull et al., 2022). For instance, workers are 3.8 times more likely to leave Tesla than Ford; more than twice as likely to quit JetBlue as Southwest Airlines; and, 4.5 times more likely to leave Hertz than Enterprise Rent-A-Car (Sull et al., 2022). So, while attrition rates have been high on average, even within the same industry there have been significant differences in attrition rates (Sull et al., 2022). A toxic work culture was found to be among the top predictors of employee turnover during the Great Resignation, and it was found to be 10.4 times more powerful than compensation in predicting an organization's rate of attrition compared to competitors within its own industry (Sull et al., 2022). Research results have suggested that nearly half of the employees (46%) surveyed felt that their organization's efforts to be empathetic were dishonest, while 42% claimed that their company did not follow through on its promises (EY Americas, 2022).

It was also found that 30% of the employees were uncomfortable advocating for cultural changes, 26% did not feel comfortable raising ethical concerns with their boss, and 85% of the respondents recognized the importance for organizations to cultivate a climate where diverse perspectives were valued (EY Americas, 2022). So, how does the call for empathy among business leaders address the deep systemic issues that have gone unnoticed, unaddressed, perhaps even fostered, and thus have become legacies within organizations? Is there an aggregate internal organizational maturity, awareness, and acknowledgment that efforts such as a call for empathy may be viewed as delayed, superfluous, insufficient, and ineffectual in addressing the deep-rooted systemic issues that may have been exacerbated during the pandemic, giving rise to the Great Resignation?

Interestingly enough, in lieu of exit interviews, businesses have initiated stay interviews that focus on intangibles such as morale and company culture (Deczynski, 2021). Yet, one must also question how effective this strategy is when employees are leaving. Is this strategy more appropriate for small- to mid-sized firms? Conversely, what proactive strategies have organizations undertaken to preempt an exodus among employees? Discussions are rampant on blogs and trade journals about the various demographics of those resigning across industries, but very few case studies showcase implementation of multipronged strategies to mitigate the Great Resignation.

It is equally important to highlight that in July 2020, 31.3 million people reported that they were unable to work because their employer closed or lost business during the pandemic (Bureau of Labor Statistics, 2022). And as of February 2022, 79.7% did not receive pay because they were unable to work since their employer closed or lost business due to COVID-19 (Bureau of Labor Statistics, 2022). Yet, 45 of the 50 most valuable publicly traded companies turned a profit between the period of April and September 2020 and, in spite of their success, 27 of the 50 largest firms laid off of more than 100,000 workers (MacMillan et al., 2021). Salesforce, PayPal, and Cisco Systems cut staff even after their chief executives vowed not to do so (MacMillan et al., 2021). Berkshire Hathaway's profits during the first 6 months of the pandemic were US$56 billion while one of its subsidiaries laid off more than 13,000 workers (MacMillan et al., 2021). So how does the call for empathy impact and influence the leadership within these organizations? How does the call for empathy change the trajectory of how these organizations lead, manage, and retain their employees?

A call for empathy is simply not enough. This is certainly not a call for empathy from sophisticated and management-savvy executives leading multibillion dollar global organizations and deemed as visionaries within their domain. What efforts have been initiated by these organizations to combat the Great Resignation? What is amiss among the leadership of organizations today? With the complex, layered, and intertwined issues that the Great Resignation has brought forth, let us not dumb it down further with a simplistic call for empathy.

AUTHOR'S NOTE

The article is a rudimentary foray into a complex concern that exists within our business landscape and cannot be comprehensively addressed due to the page limitations of the back-page article series in the Performance Improvement Journal. The brevity of the article does not intend to undermine the gravity of the issue. In forthcoming publications, the author hopes to elaborate and showcase the various dimensions of how various factors have contributed to the Great Resignation.