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The State of the Workforce

A Closer Examination of Intent to Stay Trends in the Great Resignation Era

Over the past 18 months, much has been written about the Great Resignation. Dire predictions have proliferated in the popular press. Reports from the field often speculated broadly that many employees are thinking about leaving — and soon. It simply was not enough that organizations had to manage through a once-in-a-lifetime global health pandemic, nor address mounting pleas for social justice, inclusion, and equity. Instead, leaders also had to deal with the fact that a majority of their employees were looking for a new job, and there is little that can be done to stop them. The consequence, in terms of time and cost, is immense. SHRM estimates the cost of turnover for replacing one employee is between 90% to 200% of that employee’s salary (Fox, 2012). So, how accurate were these predictions, and how close to the truth did these prognostications come? Does the current state of employee retention and engagement reflect the dire warnings that have been repeatedly exposed? In fact, the reality is probably somewhere in between.

The Evolution of Loss

Over time, several different reasons were put forward as the primary culprits driving greater than usual turnover rates experienced by most organizations. Early on, when many organizations went fully remote in response to the COVID-19 pandemic, many posited that it was the lack of early socialization and onboarding of “pandemic hires” that led to skyrocketing voluntary turnover rates. Later, the rationale seemed to be that people became accustomed to working remotely, and any company that dare call their employees back to the office faced an exodus of employees leaving for the allure of flexible arrangements that remained an option with other companies. A more reasonable approach cited the extraordinary demand placed on nurses, fast food workers, and other essential employees as an acute driver of voluntary turnover. Today, much of the dialogue centers on the rapidly rising cost of living, specifically inflation, that is increasing faster than wages are improving. This rationale suggests that people are leaving one job to do similar work at another company for a bit more money.

So, what is fact and what is fiction? Explore the following questions throughout the paper from Workforce Science Associates’ Performance Data Center (WSAdata):

  1. How has employee commitment varied during the pandemic?
  2. What have been the greatest influencers of an employee’s intention to stay?
  3. Which of the theories related to retention hold the greatest merit?

The objective is to answer many of these questions using WSAdata — WSA’s comprehensive benchmarking database. WSAdata, reflects the employee sentiment from over 10 million employees and 1,100 projects across 200+ countries around the globe. Survey items directly measure intent to stay, and WSA has analyzed trends prior to and during the pandemic. The analyses conducted on the key drivers of intent to stay identify levers that leaders can pull to increase commitment. Top and bottom quartiles were also considered to determine key differences between those thinking of leaving and those intending to stay.

Employee Commitment Trends

Before diving into the results of the investigation, it is important to first define the meaning of intent to stay. As part of WSA’s measurement of employee engagement, there are four items that comprise the index with components of satisfaction, advocacy, pride, and commitment or intent to stay (learn more about the index here). Intent to stay is measured by a single item, I rarely think about looking for a new job with another company. Importantly, the commitment item is not time-bound. Having a time-bound component can muddy the waters for employees who may be engaged but are leaving due to personal reasons, retirement, their department being reorganized, etc. Instead, the commitment item illustrates that employees who are not considering a career move are likely to display greater levels of commitment that lead to discretionary effort and enhanced performance.

So, what did we learn from about employees’ intention to stay? As the COVID-19 pandemic began in March 2020 and brought about significant uncertainty and insecurity, employees felt even more committed to staying with their employer than in the past, a trend witnessed during other major crises (e.g., 9/11 terrorist attack and 2008 economic collapse). In fact, employees’ intent to stay increased substantially to 63% favorable in 2020, up from 60% in both 2018 and 2019. More recent survey data taken across 200+ census survey projects has shown that intent to stay has followed the same downward trend as overall engagement, following the peaks of 2020 after the pandemic hit.

By the end of 2021, employees’ intent to stay had dropped back to pre-pandemic levels at 60% favorable. Employees likely feel they have weathered the storm and gained clarity about their priorities and preferred path forward, which for some include a career move. Assumptions that the number should be lower than pre-pandemic levels given the extremely high number of resignations and worker shortages are expected and part of what we will explore in this paper. But it is also important to note that the answer is likely not tied to one specific reason. The picture changes rather quickly as you analyze data across regions, industries, specific organizational contexts, and individual employee preferences.

An Employee’s Market

While intent to stay had regressed to pre-pandemic levels by the end of 2021, on the surface, this trend does not provide the full story. When viewed more closely, data over the last two years reflects the same complexity organizations and the broader workforce have been facing. Given the vast amount of change that happened globally throughout 2020 and 2021 (both related and unrelated to the pandemic), it is important to seek out further details, both from a timeframe as well as an industry perspective. WSAdata confirms employee sentiment around commitment altered considerably when the data was broken down at the bi-annual level from 2019 through 2021 (see Figure 1). Intent to stay subtly increased during the second half of 2019 and first half of 2020, while spiking during the second half of 2020 to 64% favorable. Employee commitment subsequently declined in 2021, ending the year at 58% favorable. This indicates a 6-point decline over the course of just one year , reflecting the state of the workforce as being an employee’s market. This trend, along with engagement in general, is one WSA will continue to follow throughout 2022 as organizations place immense focus on the retention of key talent.

The Industry Breakdown

As would be expected, intent to stay varies by industry (Figure 2) particularly given the vastly different implications the COVID-19 pandemic has had on various industries throughout the world. The data is broken down by the four largest industries within the WSA database.

  1. Finance and Insurance
  2. Manufacturing
  3. Professional, Scientific, and Technical Services
  4. Retail Trade

Finance and Insurance

The finance and insurance industry saw the largest increase in employees’ intent to stay from 2019 to 2020, from 64% favorable to 71% favorable. It aligns with the way in which the industry boomed in 2020 and how those in finance helped both people and organizations navigate a difficult financial time. It is also likely that a larger percentage of workers in this industry were able to enjoy the opportunity of working virtually, whereas other industries had a greater proportion of their workforce required to work onsite. However, the finance and insurance industry was not immune to the stark decline of intent to stay scores in 2021. Scores reverted to pre-pandemic levels of 64% favorable by the end of the year.

Manufacturing

The manufacturing industry has the lowest intent to stay scores at 59% favorable, a decline of only two percentage points from 2020. The U.S. Bureau of Labor Statistics (2022) illustrates a similar story as seasonally adjusted quit rates have gradually increased from 1.5% in early 2020 to 2.6% in early 2022. Manufacturing is certainly a very broad industry, but one common factor across manufacturing organizations is the need to conduct work at an onsite facility; there is limited opportunity for hourly manufacturing workers to work remotely. It is possible that many employees in this industry saw their friends, family, and neighbors enjoy the newfound flexibility often ascribed as a benefit of remote work. To the extent that this flexibility is desirable to employees, many may be contemplating a career move into another industry altogether.

Professional, Scientific, and Technical Services

The professional, scientific, and technical services industry saw a very minimal decline in intent to stay scores from 64% favorable in 2020 to 63% favorable in 2021. It leads one to believe there is no real meaningful change in turnover taking place within this industry. However, this is counter to the direction we see in the U.S. Bureau of Labor Statistics (2022) data for the professional services industry where the quit rates in December 2020 were lower (2.8%) compared to December 2021 (3.5%).

Retail Trade

The retail trade industry, interestingly, increased from 58% favorable in 2020 to 60% favorable in 2021. This is a considerable contrast to what is seen in the industry, with seasonally adjusted quit rates staying steady on average year-over-year prior to the pandemic. Over the last two years, the industry experienced a 35% increase with a 3.1% average annual quit rate in 2020 that increased to 4.2% in 2022. This increase in quit rate comes from a steady increase month-over-month in 2022. While seemingly counter-intuitive, it could potentially be easily explained by an upward trend in hire rates from the traditionally high turnover industry (8-point increase between 2019 to 2021) and the optimistic sentiment of new employees. In fact, across industries, when it comes to employee commitment, it is common to see an 8-point positive difference between first-year employees versus the norm across all employees.

Healthcare

The healthcare industry was examined with less robust data on hand. In 2019, WSA observed a score of 60% favorable for intent to stay. That increased to 62% in 2020, before falling off to 54% in 2021. It is important to note that WSA had far less data to work with than the other four industries — less than 10 projects per year in 2019, 2020, and 2021. As such, even the 8-point decline for intent to stay, observed in 2021, did not reach statistical significance. However, it does align with other published research and theory, as well as the pattern observed across other industries. Looking back, 2020 may have been the first year in a lifetime where frontline healthcare workers were almost universally regarded as national heroes. Their bravery and sacrifice during a time of uncertainty saved countless lives.

Most healthcare providers worked tirelessly and selflessly in service of others during a period of uncertainty and danger. At some point, it is not surprising that emotional and physical burnout would take an acute toll.

At 54%, healthcare workers’ intent to stay scores would land at the bottom among the major industries in 2021. Again, an important caveat is warranted: The data here is directional and not definitive. But the preliminary results are compelling, and WSA will continue to accumulate data and monitor trends for this critical workforce population.

Ultimately, intent to stay is a precursor to retention, and this data informs that generally, nearly two out of three employees are committed to staying at their place of employment. However, it is critical that leaders act upon and successfully deliver improvements on the key drivers of engagement — to secure an employee’s commitment in the future. The following sections dive deeper on several areas that have been posited or proven to be top drivers of employees’ intent to stay. Part of this examination will focus on perceptions before and after that key March 2020 dividing line of pre-pandemic and the current state, starting with manager effectiveness.

The Impact of the Manager

To what extent is the manager a top reason why people leave an organization? There is a very strong chance that you have heard the expression, People don’t leave companies, they leave managers. While the manager does play a role in day-to-day experiences, their influence is surprisingly not as apparent as the expression above would suggest.

Based upon the insights discovered through this study, there are other factors that are much more likely to cause people to leave an organization than their feelings about their manager.

After reviewing data from exit surveys, lack of perceived career opportunities consistently shows up as the top reason for leaving. When someone does reference their manager for the reason they exit, it is usually fourth or fifth on the list. In line with this observation about exit survey data, items that focus on managers in the next section, where the actual key drivers of intent to stay are reviewed. It turns out that when it comes to employees’ commitment to an organization, the immediate manager is not the most important factor. After all, employees usually put up with a crummy manager if they are working for a strong company where they personally have a great career path laid out in front of them. This is especially true if they are feeling valued for their contributions and feel a broader sense of belonging with the organization.

An even-handed examination would still acknowledge that managers absolutely have an enormous impact on the workplace. They set the stage for employee enablement and performance and help facilitate the conditions for a positive employee experience. As well, a really good manager can often be a reason for people to stick around. But as a direct influence on an employees’ commitment to stay with an organization, managerial influence is often overstated. So, if it is not the manager, then what are the key factors driving intent to stay?

Key Drivers of Employees’ Intent to Stay

Like engagement, WSA was interested in understanding the strongest drivers of employees’ intent to stay, both prior to and during the pandemic. While there has been substantial anecdotal support for various theories for why employees are staying or leaving employers, few news-worthy headlines seem to be grounded in empirical research or include more than a small handful of organizations. Across hundreds of organizations, WSA ran key driver analyses to identify the levers that business leaders and HR practitioners could pull to enhance employees’ intent to stay during a time when talent may be more prone to look for greener pastures. What was found, surprisingly, is that there are little differences in key drivers between pre-pandemic and up through the end of 2021 regarding what most influences employees’ intent to stay. It appears there truly are a handful of universal and timeless factors that are important to people when they think about their relationship to their employers (e.g., recognition, trust, career growth). However, the relative importance of these factors can and does differ.

Contributions Are Valued

Prior to the pandemic, employees’ intent to stay was largely driven by feeling that their contributions were valued and that they were acknowledged for helping the organization be successful; this has also remained a strong and consistent motivator throughout the pandemic. Prior to the pandemic, the average percent favorable for employees feeling like their company values their contribution was 66%, whereas after March 2020, the average shot up to 71% favorable.

Trust in Leaders and Enhanced Communication

Trust in senior leaders and believing they are making the right decisions for the company is another critical component that has not deviated throughout the pandemic, essentially highlighting the impact of strong leadership instilling trust in their employees.

Employees’ confidence in senior leaders to make the right decisions has, however, increased markedly from 68% favorable pre-pandemic to 76% after March 2020.

Much of this was driven by enhanced communication from leaders, and not just top-down but also bottom-up so that employees can voice their suggestions and concerns, increasing from 59% favorable pre-pandemic to 64% after March 2020. Employees’ intent to stay also continues to be driven by working in a job where they feel that their talents and abilities are put to good use. Employees, now more than ever, also want to have opportunities and the psychological safety to have their voice heard.

Future Vision

Another area that has remained constant to driving employees’ intent to stay regards future vision, which is also one of the most important drivers of engagement. Leaders being intentional about messaging around the future of their company and ensuring that the message is relevant and motivational for all levels and jobs continues to be highly important — though average scores have only increased by two percentage points between pre-pandemic levels and after March 2020. Most people want to know where they are going and how they are going to get there, and particularly what it means for them. Simply put, employees’ intent to stay is often greater when they can see how the work they perform aligns to the strategy and vision, highlighting the importance of the work they do.

Additional Key Drivers

The pandemic also brought a whole new meaning to what change meant as many employees had to learn to work virtually nearly overnight. And for others, new policies and practices dictated how work could be performed and how they would interact face-to-face with customers. Employees’ sense of being supported to adapt to these types of changes improved to 73% favorable after March 2020 from 69% favorable pre-pandemic.

There have also been some changes regarding what has driven employees’ intent to stay pre-pandemic compared to the last two years. For example, pre-pandemic, the belief that an employee’s company valued diverse perspectives was a prominent driver. Yet, even with the social unrest that continues to highlight disparities, this particular theme has decreased in impact, contrary to typical assumptions. While the correlation with employees’ intent to stay may have decreased, the average percent favorable score increased from 69% pre-pandemic to 74% after March 2020.

During the last two years, the top driver of intent to stay has been the belief that career goals can be met. It is a topic that is becoming increasingly more salient and further supported by employees’ sentiment that increased from 63% pre-pandemic to 68% after March 2020. And lastly, while managers and leaders whose behaviors and actions align to the company values have traditionally had a substantial impact on employees’ intent to stay, it has been less about managers during the pandemic and more imperative that senior leaders are being good role models for the company values.

Top-Bottom Quartiles of Intent to Stay

In addition to understanding what motivates employees to stay with their current employer, WSA wanted to understand if there were differences in motivators between employees scoring in the bottom versus top quartile on their intent to stay. One expectation was that employees who are psychologically more committed to an organization may be influenced by different factors compared to employees who appear far less committed. WSA found that the average intent to stay score of employees who score in the bottom quartile is 55% favorable compared to 67% favorable for employees who score in the top quartile — a substantial 22% increase in intent to stay.

The key drivers of employees’ intent to stay holds mostly consistent between employees who score in the bottom quartile of intent to stay versus employees who score in the top quartile. For both bottom and top quartile scoring employees, one of the greatest motivators of employees’ intent to stay regards recognition and whether employees believe their contributions are valued and that they feel important to the success of the company, particularly for employees who do their job well. Employees in the bottom quartile of intent to stay are 59% favorable regarding feeling like their company values their contribution versus 78% favorable for the top quartile of employees on intent to stay. Trust, another particularly powerful motivator regarding senior leaders, is also one of the top drivers of employees’ intent to stay for both groups. Third, future vision has emerged as just as powerful of a driver of employees’ intent to stay for both the bottom and top quartiles. Employees want to believe their organization has an outstanding future and that leaders have an opportunity to motivate and rally employees around a central goal.

Conclusion

One clear finding from this research is that levels of intent to stay were significantly lower in 2021 than in 2020. Baked into that finding was the strengthening of intent to stay during the onset of the pandemic. What went up, did come down. However, the current state suggests indeed, that individuals’ commitment to stay with their organizations has been on a downward trend. WSA also saw that the patterns were largely consistent across industries. Even though the employee experience has differed greatly from one industry to the next, each of the industries analyzed saw increases in commitment in 2020 followed by a sharp decrease in 2021.

The analysis also examined the key drivers of intent to stay. In what may be a surprise to many, the influence of the manager was less than might have been suspected. Additionally, the key drivers of intent to stay were generally consistent, yet some differences are beginning to emerge. The importance of career growth has only strengthened. And more than ever, employees want to see that their leaders are living up to the values of the company. One thing is for certain, the world of work has experienced a rapid shift unlike any that came before. The fundamentals still matter, but staying on top of the latest trends in employee sentiment, and continuing to listen to your employees is critical, perhaps now more than ever.

Authors and Content Contributors:

Cameron Klein, Ph. D., Executive Consultant, WSA
James Longabough, Ph. D., Director of Consulting, WSA
Sheena Lyons, M.S., Executive Consultant, WSA
Lisa Wager, M.S., Executive Consultant, WSA

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