Great Resignation: Research Finds This Undervalued Benefit Retains Employees Far Better Than Raises And Promotions
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The Great Resignation has wreaked havoc on the job market as HR departments desperately attempt to retain valuable employees. Most people assume that a pay raise or a promotion are the best methods to persuade workers not to quit their jobs. However, the greatest employee retention could very well be the opportunity of lateral career moves.
The MIT Sloan Management Review is a research-based magazine and digital platform published at the Massachusetts Institute of Technology. The publication explores “how leadership and management are transforming in a disruptive world.”
The outlet recently published an article titled: “Toxic Culture Is Driving the Great Resignation.” The researchers unveiled the top predictors of employee turnover, and actions managers can take to reduce it in the short term.
The researchers analyzed more than 170 cultural topics on employee attrition in Culture 500 companies from April 2021 until September 2021. They compared the reasons why workers were quitting their jobs relative to employee compensation.
- Toxic corporate culture (10.4)
- Job insecurity and reorganization (3.5)
- High levels of innovation (3.2)
- Failure to recognize performance (2.9)
- Poor response to COVID-19 (1.8)
Knowing the reasons why employees were quitting their jobs, the researchers then examined how employers could retain more workers.
Utilizing the same data metrics and time period, the MIT researchers revealed short-term steps that companies could exercise to increase employee retention. Shockingly, the top retention tool for human resource managers to retain employees was not a raise or a promotion, but rather offering lateral career moves.
Offering lateral job opportunities for employees was 2.5 times more predictive of retention than compensation, according to MIT research.
The researchers found that lateral career moves are 12 times better at retaining employees than promotions.
The outlet noted that not all employees want to climb the corporate ladder – which often means taking on additional work or increased responsibilities. However, the option of lateral career moves gives employees a chance to stay at a company that they are familiar and comfortable with, plus encounter new experiences.
“When employees talk positively about lateral opportunities — new jobs offering fresh challenges without a promotion — they are less likely to quit,” the MIT Sloan Management Review authors write.
MIT senior lecturer Donald Sull told CNBC, “Leaders too frequently think the only way to reward people is to give them a promotion. But some people have families or outside interests and don’t want the additional responsibilities and time commitment a promotion would entail.”
The data revealed that there are other undervalued tools for employee retention, including sponsoring corporate social events (happy hours, team-building excursions, potluck dinners), offering employees remote work options, and making schedules more predictable.
[Photo via RAEng_Publications at Pixabay]