​How Directors View the Great Resignation

People + Strategy: What is your take on this Great Resignation moment?

Bob Brennan: COVID-19 has caused many of us to reconcile what we’re doing with what we want to be doing. Most of us have been stuck with ourselves for long periods, and that’s created a lot of time for reflection. I think that’s generally a good thing, although it obviously has negative effects for those who have decided that what they were doing doesn’t map to their aspirations or desires.

The metaphor for me is that it’s like a “dead reckoning,” which is roughly defined as calculating one’s position, usually at sea when you don’t have electronics. When we think about being first confronted with the pandemic, we worried about whether we or our loved ones would die from it. There was no data to guide us early on.

Months and months of working virtually—with no commute, lunch breaks or socializing, and maybe taking care of kids at home—was like living with no expert to guide us. We were all in the same storm, and so it became an exercise in positioning.

Do I like what I do, who I’m partnered with, where I live and where I work? We’ve all had way too much time to think about these things and many people made changes to their lives just by getting one “no” to those big questions. 

Dead reckoning is happening on so many fronts these days because so many people have taken stock of their position and repositioned themselves. It’s a positive byproduct of these times.

Laurel Richie: The pandemic has brought into clear focus many things about the workforce and talent that we have been talking about for years—work from home, productivity, the importance of culture, living our values, meeting the needs of the next generation, succession planning, how we reward our essential workers and expanding benefits for mental health as well as physical health. We were forced to deal with all of these considerations simultaneously and immediately. The Great Resignation isn’t any one dimension. It’s the totality. This period has forced us to be much more nimble and much more experimental.

The strong companies through this period are the ones who are clear on their values and clear on how they feel about their employees and their customers and partners. They went into immediate action with a deep offering of opportunities, benefits and support. 

For example, I’m on the board at Synchrony, and when the pandemic hit India particularly hard, they contracted ambulances to make sure that they could get employees’ family members to hospitals to ensure that was not a barrier to care. Management also made the decision to raise minimum wage to $20 an hour. 

Bright Horizons, another company where I serve as a director, also really leaned into their values during the pandemic. In the early days, as child care centers across the country were closing their doors, the Bright Horizons team quickly pivoted to convert closed centers to provide child care service to essential works on the front lines and to quickly scale up back-up care offerings for parents who suddenly found themselves struggling to care for their children as they transitioned to working from home.

During this time of crisis, there was an opportunity for the board to help identify needs because things were moving so quickly. How can we help be the eyes and ears and think through potential bottlenecks? How can we support aggressive intervention on the front lines? And how could we support the management team because just like everybody else, they were working around the clock and feeling the pressure? 

As a board member, I approached this as an all-hands-on-deck moment. We couldn’t do the work for the management team, but we could certainly support them emotionally and be their thought partners.

Kim Lubel: The pandemic has created a chance to reflect on what’s next and what’s important, and maybe to explore other opportunities. As people are leaving to go to other jobs, it’s opening up new positions and creating competition for jobs and increasing salaries. 

With so many people working from home, you don’t have the ties with your colleagues that you typically build when you join a business. It’s a lot harder to develop those bonds now. When I was at Valero for more than 15 years, we built those connections with things like taco Tuesdays and pie contests that helped people feel like they were part of this family. The next wave of employees is looking at work differently now. 

P+S: What does this shift mean for you as a board director? 

Lubel: I serve on a couple of compensation committees, and clearly it’s a key topic for those conversations. We have to make sure we have benefits that make people want to stay, but you also have other ways to build retention. One of the things I’ve done on a couple of my boards is to spend time with the women’s networks in the companies. It’s easier in a virtual world to have those meetings. 

Obviously we want to be competitive on pay, but employees are looking for other things, too. How do you approach getting back to the office, and what is the combination of flexibility that you’re willing to offer and that your business can sustain? Having time in the office is important to build that sense of community, but having some flexibility on when you’re in the office is important, too.

This next generation also wants to know that they’re having an impact and doing more than just going to work. It’s about building an employee brand with purpose and making sure that you’re doing that in a genuine way. I worked in the energy sector where there has been a reluctance to talk about the good things that companies do in the community. 

One of the reasons I joined Valero back in 1997 was that they had a big community commitment. Yet when I got there, no one really wanted to tout it because they worried it sounded like self-promotion. But it was part of the DNA of the company, and that’s really what brought me there. Companies need to be less shy about talking about that because I do think this next generation is looking for that community DNA in the business. 

Brennan: I worry about CEOs and C-suite executives who don’t have the time to reflect about the work they are doing. They’re going from video call to video call to video call then to the refrigerator and back to a video call. There was always a benefit to being on a plane for six hours because it allowed you to think strategically. It allowed you to think about the relationships that aren’t working on your team. I worry about senior executives in a trap of incidental contact who don’t have any kind of breaks that normally come with business travel. 

The other big shift for me is that you can push further to create the decentralized autonomous organization. 

No organization’s autonomous, but the more autonomous and organic you can make it—so that anybody can do their job anywhere—the better off you will be. Centralized, hierarchical organizations are facing secular decline and probably a lot of great resignation. 

P+S: Talent clearly is in the driver’s seat right now. But companies have to balance other stakeholders too. 

Richie: If you don’t invest up front in your talent, you’re either going to pay more to retain them or you’re going to pay more when you go out to the open market to hire a replacement. You’ve got to take a long-term view of their value, because if they leave, that’s a loss of institutional knowledge, and a loss of time to get new people to get up to speed. When Synchrony made the decision to raise their minimum wage to $20 an hour, it was a bold step intended to pay off for us in the long run. 

P+S: What other things should HR be doing in their interactions with directors? 

Lubel: It’s helpful for HR to continue to present just the facts of what’s happening at the company. What is the retention rate? Why are you losing employees? Are you losing employees who you don’t mind losing, or are you losing employees you want to keep? What are you learning from your exit interviews with those employees? 

Also, what are the benefits that your competitors are offering? Compensation committees tend to get deep in the weeds on dollars and cents, but not so much on the benefits side. They need to shift that focus, because employees are looking at the bigger picture, and cash is just one part of it. 

I have so much respect for HR professionals today because it’s just so much harder than it used to be to figure out what to do next. They should be leaning into the board to say, here’s what we’re dealing with and what are your thoughts on it, and getting their advice and counsel. I think that would make board members feel more connected. But it may also provide the HR folks an outlet because it feels overwhelming at times right now. 

P+S: Other advice to HR leaders on navigating this future? 

Richie: First, double down on listening. We’ve always believed that it’s important to have your finger on the pulse of how various stakeholders are feeling, and in this moment, staying in constant dialogue with your employees is critical because just like the world is changing, they are changing, too. Every time we think we’ve reached a new normal, something happens that shakes that all up. Companies should be increasing the frequency of surveys and forums for listening. 

Second, you have to remain flexible. We don’t know how this is all going to shake out, and you have to have a plan, but you also have to be willing to course-correct as the world changes and new information comes in. Those who remain flexible and adjust and respond and set a new path and adjust and refine as they go are going to get to the right solution faster and with more of what they want intact than those who try to read a crystal ball and make a final decision on issues like whether people are going to be required to return to the office. It’s not just about following what’s happening with the pandemic. It’s about following what’s happening with the sentiment of the employee base, because they’re learning and experimenting and figuring things out that are going to last well beyond this virus.

As we think about coming back to work, are we saying coming back to work, or are we saying coming back to the workplace? We have to be careful not to confuse those two. There are many upsides of the flexibility of remote work that expands your talent pool. There’s also a downside in that it lowers a barrier to exiting. 

I’m hoping that everyone is taking time to have what may feel like philosophical discussions about how people are defining work, how they’re defining productivity and how they’re defining flexibility. These are big concepts that are worth unpacking so that we have our eyes wide open as we make decisions and explore their long-term implications. 

Brennan: I worked with John Chambers, the former CEO of Cisco, a long time ago, and he described the culture he was trying to create as being both loose and tight. His way of saying it back then was that you could work any 60 hours you want, and he didn’t care where you did it from. There’s flexibility in saying, you be you and just do your job.

Another thing that is driving people to switch jobs is that that there used to be a tradeoff between cash compensation and equity based on whether you wanted to work with a big company or a small company. That distinction has blurred. Little companies are paying big cash compensation because they’ve raised a ton of capital, and big companies are recognizing that they’ve got to provide incentives that compete with startups. There is a flexibility that the employee now has in that they can take their game anywhere they want without sacrificing too much economically. 

The soft things that I try to focus on—and it’s harder to do remotely—is how do you better understand the achievement motivations of people and amp them in an appropriate way? How do you understand the need for bonding that people have, and how challenging it can be to building those bonds on video calls? How do you understand the need for learning? 

It’s about leading with inquiry as opposed to statements. When we have a rule, are we explaining why? How much conformity are we seeking from our employees? There are too many CEOs out there who are saying that you’ve got to get back in the office. They’re inviting people to resign with that statement. 

As a director or CEO, you have to figure out how to create a more flexible organization, with more autonomy and flexibility, without it becoming a free-for-all. This is no time to be telling people what to do. They’ll tell you where to go.

That said, you have to set boundaries. Your employees don’t decide which customers you’re going to work with or what your stance is as a company on a particular issue. As leaders, you have to make decisions that may be controversial, but you also have to explain the thinking behind the decision. I think that’s healthy. 

Command-and-control leaders who dictate what to do or issue a bunch of rules that don’t make sense to your employees or talk out of both sides of their mouth are going to get called on it, and probably should. 

P+S: If a CEO asked you for advice on how to handle all the new challenges they face in this era of stakeholder capitalism, what would you tell them?

Lubel: I would encourage them to think of ways to use the board more effectively. Typically, most of your board members have held CEO or other leadership roles. There are ways we can help. CEOs can even assign a board member to each person on the leadership team so that the CEO doesn’t have to be the sole mentor for their team. That will free up more time to focus on what’s happening lower down in the organization, too.

Because all those pressures on top leaders can take a toll, it’s just going to be harder to recruit. I’m chairing a CEO search right now for one of my statewide nonprofits, and I’m concerned that we’re going to have to dig a bit harder to find someone for that role because we are asking a lot of leaders right now. 

At the board level, directors have to make sure our CEOs and our leaders are taking breaks and taking some time to get some rest, because you have to hope the Great Resignation does not hit your C-suite.