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Businesses are facing a staggeringly high quit rate -- 3.6 million Americans resigned in May alone -- and a record-high number of unfilled positions. And Gallup discovered that workers in all job categories, from customer-facing service roles to highly professional positions, are actively or passively job hunting at roughly the same rate. To what extent are you currently looking for a different job than the one you have now? Employees who are looking for a job or watching for opportunities Before COVID-19 After COVID-19 % % Actively Disengaged 69 74 Not Engaged 51 55 Engaged 29 30 Total 46 48 Gallup, Sept. 2019, March 2021 People are calling it the "Great Resignation," and as the Gallup data show, it's not an industry, role or pay issue. It's a workplace issue -- because the highest quit rate is among not engaged and actively disengaged workers. Employee resignation and employee engagement Unfortunately, most employees are not engaged or are actively disengaged. Gallup's State of the Global Workplace: 2021 Report identified a global employee engagement rate of 20% -- 34% in the U.S. and Canada. And disengagement is very costly. * The lost productivity of not engaged and actively disengaged employees is equal to 18% of their annual salary. * For a company of 10,000 employees with an average salary of $50,000 each, disengagement costs $60.3 million a year. * Replacing workers requires one-half to two times the employee's annual salary. So, it costs $9,000 a year to keep each disengaged worker and between $25,000 and $100,000 to replace them. People are calling it the "Great Resignation," and as the Gallup data show, it's not an industry, role or pay issue. It's a workplace issue. Considering that most of the currently employed are not engaged, each new hire is liable to land on a less-than-engaging team and probably won't stay long. That's a self-defeating cycle, but it can be interrupted -- and the most effective interrupter is the local manager. Gallup finds that it takes more than a 20% pay raise to lure most employees away from a manager who engages them, and next to nothing to poach most disengaged workers. The lost productivity of not engaged and actively disengaged employees is equal to 18% of their annual salary. Employee retention strategies demand people management skills To engage workers, managers must fulfill the 12 essential elements of engagement. Those elements range from knowing what's expected at work to having opportunities to learn and grow. And because engagement has a reciprocal relationship with wellbeing, engaged employees are healthier, more resilient and better performers. They're also more loyal. One Gallup client that focused on propelling organic growth through effective workplace culture found that engagement reduces turnover in critical high-turnover roles by 36 percentage points and reduces the 100-day attrition rate by nine points. Delivering the elements of engagement and wellbeing isn't difficult, but most managers need help to do it right. Development teaches managers how to conduct meaningful conversations, set expectations and create accountability, individualize performance management to get the best out of people -- and create an employee experience that retains workers. Pay strategies and engagement Though pay is important, money alone isn't the solution. Some very well-paid people are among the most disengaged, and disengaged white-collar workers are slightly more likely than others to be looking for a job. Disengagement is a better predictor than pay of disloyalty -- workers at every level of income are looking for new jobs -- but pay strategies can reinforce engagement or erode it. Gallup finds that it takes more than a 20% pay raise to lure most employees away from a manager who engages them, and next to nothing to poach most disengaged workers. Pay structures are most effective when they incentivize preferred perceptions, behaviors and outcomes, but most pay policies don't. Gallup found that employees who feel their pay and incentives are fair, motivate individual achievement or direct them to do what's best for the organization are happier with their pay and more engaged. But, at most, 22% of workers can strongly agree with those perceptions, as shown in Gallup's perspective paper, How to Align Your Employee Compensation and Talent Management Strategies. Companies have opportunities to maximize pay strategies by calibrating an effective total rewards program with an understanding of how all of the program's components affect various employee perceptions, behaviors and outcomes. It's detailed work -- Gallup's work with clients shows that compensation strategies can undermine talent management strategies -- but it can prevent underperformance, culture and compliance problems, and rapid turnover. In any case, attributing today's record-high quit rate to pay issues overlooks the bigger picture of the workplace. The pandemic changed the way people work and how they view work. Many are reflecting on what a quality job feels like, and nearly half are willing to quit to find one. Reversing the tide in an organization requires managers who care, who engage, and who give workers a sense of purpose, inspiration and motivation to perform. Such managers give people reason to stay. In other words, reversing the Great Resignation requires fixing the Great Discontent -- and managers are the key. Engage your employees so they stay with you through thick and thin: * Learn more about employee engagement: what it is, how it affects business performance and how to improve it. * Partner with Gallup to make engagement a core part of your culture. * Explore Gallup Access, our software that helps you do what the most engaged companies in the world do. Author(s) Vipula Gandhi is a Managing Partner at Gallup. Jennifer Robison is a Senior Editor at Gallup. Sangeeta Agrawal contributed to this article. Improve Employee Engagement Employee Engagement Improve Employee Engagement Learn how Gallup partners with organizations to engage employees for high performance and innovation. Related Topics Include: All Gallup Headlines Article Employee Engagement Gallup Panel Retention Workplace Get the insights you need to create an exceptional workplace. Subscribe to the Gallup at Work newsletter to get our latest articles, analytics and advice. * Email Address [ ] * Country or Region [Select One ] [ ]I'd also like to be among the first to know about new Gallup offerings and services. I understand that I may unsubscribe from these offerings at any time. * [ ] [Sign Up] Recommended [gif][mglu0lylkk] Workplace Jul 13, 2021 Create Your Hybrid Workplace Strategy With 7 Questions When employees want to work from home, a generic hybrid model is not the answer. [gif][zyylvacfg0] How to Improve Employee Engagement in the Workplace Learn how to improve employee engagement. Discover the true drivers of engagement, the best survey questions and team activity ideas. [gif][kce5s_grk0] CliftonStrengths Apr 8, 2021 Successful Leadership: Stories From a Great Leader Learn how leaders at Hologic have improved their workplace culture, inspired employee engagement and built trust and stability during turbulent times. [gif][whiucojsye] Report The Powerful Relationship Between Employee Engagement and Team Performance Download highlights from the world's largest study of employee engagement and performance. July 22, 2021 Gallup https://www.gallup.com/workplace/351545/ great-resignation-really-great-discontent.aspx Gallup World Headquarters, 901 F Street, Washington, D.C., 20001, U.S.A +1 202.715.3030 Gallup * About Us * Careers * Locations * News * Store * Media Inquiries * Gallup Speakers * Customer Support * Contact Us * Facebook * Twitter * LinkedIn * Instagram * YouTube Subscribe to Our Latest Insights [ ] Sign Up Copyright (c) 2021 Gallup, Inc. All rights reserved. * Cookie Preferences * Privacy Statement * Legal * Do Not Sell My Personal Information