Great Resignation: More than 1/3 of US companies surveyed report 'unsafe' turnover rate

Stephanie Sierra Image
Friday, April 1, 2022
Companies report 'unsafe' turnover rate amid Great Resignation
More flexibility, more money and more convenience: 459 companies explain the new factors they need to consider to land and keep the best employees.

SAN FRANCISCO (KGO) -- As companies embrace the Great Return back to the office, employers are still faced with challenges from the Great Resignation -- is it getting worse?

According to the Labor Department, four million Americans quit their jobs last April and the trend continued into this fall. As COVID-19 pandemic restrictions eased, many Americans re-evaluated their life, wanting more flexibility, more money and in many cases just craved the convenience of working from home.

Offering that convenience has been a big priority for U.S. companies trying to compete for quality candidates. Sequoia, a people-investment, and consulting platform company surveyed more than 450 companies across the country - a majority of which are based in California.

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The Great Resignation in California

San Francisco-based startup Osmind is trying to grow.

"Ideally how many months until this office will be full?" ABC7's Stephanie Sierra asked.

"That is primarily driven by our hiring goals at this point in time," said Quinn Morgenthaler, the company's HR director.

The health record software and research company has distributed teams from Hawaii to New York. But, like many companies faced with challenges from the Great Resignation, Osmind is struggling to compete for new hires.

"We've seen some challenges around attracting the right talent to come in," said Morgenthaler. "Because it's not about resigning from the workplace. It's about resigning from the type of workload and the type of feelings that are around carrying a 9am to 5pm job."

Morgenthaler says the Great Resignation is forcing smaller companies to realign expectations and prioritize flexibility.

"It's about giving that flexibility that's appropriate and competing against some of the bigger fish out there," she said. "We are 2 years old, we're not a Google or Facebook and we don't expect to be."

While Osmind has a high retention rate, Morgenthaler says if they lose a candidate it's usually tied to compensation restraints.

Salary adjustments and turnover rates

Sequoia's survey found salary adjustments are a primary factor fueling the turnover rate across the U.S. job market.

"Lowering compensation can be super risky as we look at the turnover numbers, the stable state is anywhere less than or around 10%," said Kyle Holm, the Vice President of Total Rewards and Advisory at Sequoia. "Roughly two-thirds of the companies are experiencing turnover that's greater than that - which can be highly disruptive to your business."

Of the 459 companies surveyed:

  • Around a third or 33 percent indicated their employee turnover rate was between five to 10 percent.
  • Whereas, more than a third or 35 percent indicated their employee turnover rate was between 11 to 30 percent.

"What we're seeing as far as what falls under this Great Resignation is really just a realignment between what the employer can do for the employee and what the employee needs to feel successful," Morgenthaler said.

Prioritizing the employee to not only stay competitive, but to help avoid burnout.

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Companies are finally calling employees back to the office after two years, but the experience will be different for individuals.

"There's definitely more of a blur between work and life post shut down," said Landon Hersch, the director of Software Solutions at Sequoia. "Now, we're seeing a lot of employers doing that mandatory shut down on a Friday or a Monday to give people longer weekends."

Or in some cases offering a month-long sabbatical. San Francisco-based people-management software company, Lattice, is following big tech-giants like Facebook, offering special perks to veteran employees.

"Folks that have been running the marathon with the company have the opportunity to take four weeks consecutive time off," said Maurice Bell, head of People Operations at Lattice. "This is meant to be really opportunity for you to step away."

Flexibility with relocating

Whether it's stepping away briefly or completely out of the country - there's a new expectation of flexibility.

Of the 459 companies surveyed:

  • Nearly half or around 48 percent are allowing employees to permanently relocate to any state or country.
  • 14 percent are restricting permanent relocation to specific states.
  • 9 percent can relocate to states where the company has an office.
  • Only 6 percent are requiring employees to return home when the office reopens.

"People have made commitments like being fully remote is my jam," said Bell. "And, we embrace that."

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But the challenge is finding attractive offers that work for everyone - while keeping up with demands of a tight job market.

"The resignation is really about realizing those expectations, having open dialogue, so everyone is getting what they need," said Morgenthaler.

When it comes to getting what you need with time off, Holm is noticing a trend. The survey found many companies that have unlimited time-off policies are struggling to have their employees use the time. In some cases, Holm says companies are re-enforcing a mandatory two weeks paid time off policy.

To access the full survey, click here.

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