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Executive Corner – What Can Small Businesses do to Defeat ‘The Great Resignation’?

Michael Clegg | 09/29/2021

Leader’s worlds are being flipped upside down in all size companies.  The Great Resignation is a bigger challenge to business than any of the Covid variants.  Yet not many leaders are paying attention.  Gallup data shows that 48% of the current workforce wants to change jobs within the next year.  Covid is only a symptom of this issue.  No community is being impacted greater than the small business community.  In Boone, North Carolina a Kentucky Fried Chicken has a $650 signing bonus being advertised.  Taco Bell is paying $15/hr. for entry level roles.  What’s going on? 

I was at a CEO Advisory Meeting a few weeks ago speaking with another owner of a small business who has been having major technology challenges that COVID brought front and center.  This owner’s company has 23 corporate employees.  Five of those that are in technology.  The team explored a much-needed legacy system upgrade.  The cost to outsource that project was expensive, so they begrudgingly took it on internally.  This project was several weeks in process requiring over 70+ hours a week from each team member, which included nights and weekends.  In the middle of the project, two team members resigned leaving only three to complete the project. They had no choice but to go ahead and outsource the project following the resignations.  The disturbance to a small business can be catastrophic.  Not only will the costs of outsourcing be significant but the replacement costs of the two resignations will be great.  I asked the owner if she suspected the two employees that resigned were unhappy or planning to leave.  She couldn’t answer the question because she never asked them.  Their reasons for leaving were a less stressful environment with more flexibility.  All of this is preventable by acting.  The cost to most leaders is time.  The costs to not engage your employees is time plus significant dollars for replacement.  Turnover costs 30% of an hourly workers annual salary and 150% of a manager’s annual salary according to a Cornell University study. 

KEY CHANGEThe most important strategy is to increase employee engagement. 


Gallup has the most popular data on engagement.  Creating an engagement strategy needs to be a priority.  If it’s not, members of your team are in the above 48% looking for or open to another job.  Gallup has identified 7 stages of employment and the different engagement tactics during each stage. 

  • Attract 
  • Hire 
  • Onboard 
  • Engage 
  • Perform 
  • Develop 
  • Depart 

The data shows that lost productivity of disengaged employee’s costs 18% of their annual salary and that’s while they are still employed.  If 75% of your employees are actively disengaged, how much is that costing you annually?  It takes 20% or more in compensation to attract an engaged employee from their employer.  The cost of recruitment is significant, and the cost of turnover is even greater because it is multiplied by every disengaged employee that resigns.   

KEY CHANGEThere are plenty of inexpensive tools to help create dialogue and engagement with employees. Find something to facilitate these meetings.   

In my experiences, most companies do a decent job during the “attraction” stage.  HR and Leaders are exuberant when they want to hire a new employee to fill a much-needed void.  However, that fades very quickly according to employment data.  There is a significant drop off in engagement in the other six stages. I strongly encourage you to find people on your team or externally to assist you with increasing engagement.  Otherwise, you and your organization will end up as one of the negative statistics in this article. 

Focusing on the “Engage” stage because this stage will resonate throughout each stage of employment.  It’s important to find out what makes each employee T.I.C.K. 

  • Traits 
  • Interests 
  • Communication style 
  • Knowledgeable coaching tips 

I utilize an assessment tool called PDP Global.  There are many tools to choose and many of them are great when used properly.  I get coaching reports that I use to guide mine and my client’s employees through exercises that increases the level of engagement.  I identify key motivators (think Simon Sinek “Know Your Why”) and stress levels.  It’s only a tool.  The leader must be committed to meeting regularly.  You cannot replace your time with each employee.  It must be your most important strategy and tactic.  This is a simple inexpensive solution for small businesses to creating engagement. 

KEY CHANGE: Bridge the gap between Leaders and Gen Z/New hires by focusing on deliberate steps to identify their purpose and motivations. 

Microsoft did its own study titled “The Next Great Disruption Is Hybrid Work – Are We Ready?” 

Covid has upended the traditional workplace.  Many leaders had poor ratings in employee engagement when we were all under the same roof.  Microsoft’s data shows that leaders are getting worse at engagement. Developing strategies that are “authentic” (I hate using buzz words) and genuine are necessary.   

Microsoft studied 30,000 people in 31 countries.  73% of employees want flexible remote work options to stay in place permanently.  The MOST alarming item in this study to me is the overall disconnect between the business leaders and their employees?  61% of leaders say that they are thriving, whereas over 60% of Gen Z and 64% of new hires (<1yr) are categorized as struggling/surviving.  Add in the 18% cost to businesses of disengaged workers and businesses have a serious issue ahead of them.  Many Fortune 500 companies will have the time and resources to try and reverse these trends.  However, what will small businesses do?  They don’t have the time nor resources to tackle major issues.  Many are sinking a lot of money into technology costs to handle the hybrid workforce challenges.  Labor costs are every business’ largest expense.  Turnover drives those expenses higher.  

To start, be vulnerable. (there we go again with those soft and touchy feely things) Tell your current employees that you realize they have options and you value what they do on a day to day basis. Find a program that you can adopt.  Train your leaders how to implement these daily tactics.  Take these times very seriously.   

KEY CHANGECulture’s job is not to make employees feel good.  Its role is to drive behaviors.  Engagement will help facilitate a great culture. 

Performance Pathway:  LEADERS -> CULTURE -> BEHAVIORS -> RESULTS 

Brian Kight says it best when discussing the “Performance Pathway”.  Leaders drive the culture they need for success.  Culture’s job is to drive behaviors.  The right behaviors drive results. I tell all my clients that culture is measured by what they tolerate.  If you tolerate a professional disability like a bad attitude, then your culture will be filled with finger pointing and complaints with a lack of accountability.  Culture’s job is to not to make employees feel good.  Culture can be used to increase employee engagement.  People don’t want to come to work in an environment that is driven by negativity.  Culture is not comprised of ping pong tables and beer keg refrigerators.  While those things can be attractive to potential new hires, they are not enough to retain talent.  Good talent wants a purpose.  Leaders driving regular conversation with their direct reports and explaining how each individual role fits into the overall purpose of our company’s mission is engagement.  “How are you today?” is not engagement.  While it is polite to ask, those type of questions are not meaningful dialogue.  If you do not have a follow up question to “how are you today?” then you are fooling yourself with an empty conversation.  You must dig for mental and emotional connection to create engagement.  All small businesses can actively gain engagement by creating a system of meeting regularly with employees.  It’s simple and not too late to start.   

If you are a small business Owner/Leader, seek assistance.  Many of us have multiple hats that we must wear all in the same day so the idea of spending 30 minutes or longer with each employee weekly can be daunting, but it will bring value.  There are strategies that you can implement with little effort like the ones outlined above.  Utilize other Leaders or key stakeholders in your organization to assist and if you don’t have anyone else to assist, seek external assistance.  Don’t wait until your top employee resigns to begin focusing. The Great Resignation is real and it’s not a matter of “if” but “when”.