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By Oren Barzilai, cofounder and CEO of Equitybee.
In September, a record 4.4 million employees quit their jobs, according to the US Department of Labor. It capped what can only be described as the most significant employment trend of the 21st century. There are many reasons that can be attributed to this sea change in work status among Americans throughout the last 18 months. This phenomenon has been famously dubbed the “Great Resignation,” and pundits and experts are coming out in droves to explain its origins, gauge its momentum, and predict its outcomes. However, I believe that characterizing this vocational movement as simply an emigration — fails to consider the true motivations of these employees who are leaving their jobs in such big numbers.
My take on the Great Resignation, then, is that employees aren’t leaving their companies so much as they’re seeing tangible evidence of what they’d been concerned about all along: after so many exits, from SPACs to mergers and acquisitions, they’re unable to share in their companies’ valuation event. Many employees may even depart before those events even occur due to a lack of feeling valued.
On a recent episode of Real Time with Bill Maher, guest commentator and Shark Tank personality Kevin O’Leary assessed the current employment situation, stating that working from home has reconfigured the way employees structure their office hours, and, as a result, their work/life balance. He noted that employees globally have demonstrated that they can use technology to do their jobs from home successfully, creatively, and functionally, and suggested if their companies employ a mandate that states they have to return to work from the office, they’ll say, “Nah, I’m just going to quit and work somewhere else.” What Mr. O’Leary so astutely zeroes in on with this seemingly trivial assessment is that employees will work anywhere and rearrange their lifestyle and schedule if they truly feel valued.
Value is something that has unfortunately gotten lost among the many priorities of building a successful, employee-first business.
A recent survey by Bankrate.com found that 55% of Americans plan to seek new jobs in the coming year. And Deloitte revealed that over 50% of CEOs cite talent recruitment and retention as the most significant challenges going into 2022. What’s more, they’re worried that failing to stop the “bleeding” of lost employees will be a major barrier to progress in the next year.
What else may be responsible for so many employees leaving their current job, but not necessarily for a bird-in-hand opportunity like a new one? The employees-employer relationship is one of the most enduring and constant in our everyday lives.
I believe that it’s incumbent upon the businesses — and the leaders who run them — to ensure that their employees are valued, however new they are to the company, and regardless of their depth of experience.
Many employment experts are weighing in on the importance of jobseekers to feel fulfilled by their work — and to identify what may or may not be valuable to them as employees. I founded my company, EquityBee, to address the notion that in fact, it’s the companies that should be identifying — and actively demonstrating — that value should start with the startups educating the workforce about its truest impact. They can begin by educating their team about one of the most important parts of their employment contract that gets deprioritized or muddled in the typical benefits package: their equity.
Let’s consider that word: equity. It suggests a portion of the whole that belongs to an individual who has earned it. The truth is, though, that there’s not much that’s equitable about equity. For startup employees, even once they’ve earned their stake in the company, in the form of stock options — the majority of them aren’t able to access those options because they either don’t know how to or can’t afford to. This is a system-wide disconnect that is by no means the fault of private companies that experience a liquidity event; nevertheless, it works to the detriment of any startup employees who cannot afford to participate in the success of the companies that they helped build.
Every employee would like to be a part of something greater than themselves. It’s about more than enjoying their position, or their role; it’s about deriving a profound sense of purpose from contributing to their companies’ success. Making an impact is one thing; being able to participate in that success is even more poignant. And that’s where equity comes in. It should be a right, not merely an option. As we say at EquityBee: you built it, own it.
Employees at private companies have largely been underserved by a system that concisely fails to provide information about an avenue to access the equity that they have earned over the course of a career, building their companies’ success. Each year, more than 55% of employees’ stock options go unexercised, totaling more than $60 billion. That’s money that gets left on the table and absorbed back into the companies. Once the concept of value gets more widely embraced by both companies and employees alike, a greater understanding of the workplace’s seismic evolution will be much easier to gain.
I’m not suggesting that paid time off, company-provided lunches, and other benefits or perks should be ignored. But at a certain point, these nice-to-haves, which might give one company a slight edge over another, amount to much less in comparison to providing actual value to employees. An employee does his or her best work when they are treated as a key contributor to their company’s valuation event — and eventually, a key beneficiary of it. In short, they feel like the matter because their success has been prioritized alongside their company’s.
Going into 2022, it may be wise to view the last 18 months as a great setting of the table for the future of work. The Great Resignation is a prologue. It’s time to usher in the next chapter: The Great Reprioritization.
Oren Barzilai is the cofounder and CEO of Equitybee. Previously, he cofounded and served as the CTO at Tapingo, a mobile commerce application that was acquired by GrubHub for $150 million, and cofounded and served as the CEO of Start A Fire.