Quiet quitting on the rise amid tech layoffs
Quiet quitting on the rise amid tech layoffs
Dissatisfied high-tech employees could once easily move to another company, usually with a higher salary and perks. But today’s poor job market means that most ‘quietly quit’ instead
Gili, (a pseudonym), a product manager at a startup for six years, has been looking for a new job for six months with no success. "The organizational culture doesn't feel healthy to me. We're about 150 people, but the atmosphere feels like a corporation. There’s too much management and too little understanding of the details and the business. Additionally, there's no investment in employees and I don't feel personal professional development or managerial support at the level I would like," she says. However, because the job market is so poor right now, Gili has remained at her current job.
Whereas in 2020, the job market was favorable for jobseekers, now it has shifted to favor employers. This is due to a combination of a global economic crisis, Israel’s domestic political crisis, and now Israel’s war in Gaza, all of which have led to a decline in funding, mass layoffs, and hiring freezes. The number of employees in the high-tech industry shrank last year to the average level of 2022, and shrank further in January due to another wave of global layoffs. Thousands of industry workers were sent home. Even companies that are hiring do so sparingly, and the number of open positions remains small while the number of applicants for each position is only growing.
"There are very few jobs. As a product manager, the requirements are usually very specific, and with the lack of options, it's difficult to find a company that will hire you," says Gili, who is looking for supportive management with an interest in fostering the growth of its employees above all. "It's very difficult to find quality direct management. Not everyone can truly manage people, and I hope that elsewhere there will be managers who understand that they are there primarily to enable their employees to grow."
Like Gili, there are many other employees in the high-tech industry who stay at their jobs despite being dissatisfied. While, in the past, they could easily find another job with similar or even more pay, now, in a situation of uncertainty and a lower chance of a salary increase, more employees stay, and grow resentful.
In fact, in Israel only 19% of employees feel a connection to their workplace, a decrease of one percent in 2023 compared to the previous year, according to a Gallup poll. At the global level, only 23% of employees are satisfied with their jobs, while most employees (59%) are part of the phenomenon known as ‘quiet quitting,’ that is, doing the minimum requirements of their job and putting in no additional effort or enthusiasm than necessary.
"New generations enter the workforce that haven’t grown up with the concept that one should remain at one job their entire life. Everything that is going on in the world today has an impact and there are very few organizations that are able to cope with this," says Jonathan Pietra, Founder of Great Places to Work Israel. "During this period, there is much more resentment and much less engagement, and the ability to be effective. Productivity decreases and we see this across the board. On the other hand, companies with a positive work culture survive these crises better, and their recovery is faster."
In Israel, over 55% of employees want to leave their current workplace, 30% feel a lack of belonging and 25% feel lonely, according to data from Great Places to Work. "These figures are getting worse year after year, and especially in the last two years since COVID-19, because the world is becoming an increasingly difficult and uncertain place," says Pietra. And yet, the company's TRUST index, which polls the level of trust between employees and employers, including the level of fairness, reliability and respect in the workplace, high-tech appears to be in a better place relative to other industries.
“A year or two ago, companies hired recklessly, and now they appear irresponsible. We gave people signing bonuses that now seem outrageous, and when people join companies at such a high level, the fall is very hard. In the past, anyone who was even slightly dissatisfied could get an offer from another place. Today people are on LinkedIn and job boards, and there are no jobs. This causes them to stay and grow resentful, and it's not just about money," says Daniel Cohen, an Employer Branding Manager at AppsFlyer.
"There are people in the industry today who were promoted to management roles without cause. If you threatened to leave, you’d be promoted, so employees could not deal with being told no. Moreover, there are organizational changes happening frequently. There are companies that change people's managers monthly because everyone is now focused on efficiency. Right now, performance reviews are being conducted, and many employees are resentful because they won't get salary increases. So, people who are unhappy in the organization either do the bare minimum or take on projects unrelated to work to advance. Managers feel this and react by deciding that everyone needs to work from the office every day, creating a vicious cycle. Employees feel that employers are exploiting the market at their expense."
The phenomenon of quiet quitting intensified during the COVID-19 pandemic and continues today. As mentioned, most employees across the world are part of this. What's different now is that the economic, political, and security situation in Israel is causing companies to feel greater pressure and increase expectations of employees to deliver results. "And it simply doesn't happen,” says Cohen. “If the tech industry is based on innovation, then when you're not motivated, you just don't do anything, and now there's also this resentment, leading to a covert unemployment period, at a time when this is exactly the opposite of what companies want."
Mor (a pseudonym), another product manager who has been working for a startup that employs about 100 people for a year and a half, describes a tough atmosphere at the company. "Everything is difficult - sales, raising funds etc. There are layoffs at even the most successful companies. The atmosphere is tough also because of the situation in the country, starting with the judicial overhaul and now with the war. It feels like it significantly affects the economy, and there's no light at the end of the tunnel," she says. However, Mor believes that overall the management in her company is doing its best to read the market as needed and make the necessary changes.
Strong leadership + trust in organization = less employee turnover
"Employees are demoralized primarily because they don't get responses to what they need, they don't receive empathy. This is a very tough period; people are anxious, facing economic hardships, and in such times, people are more demoralized. However, employees won't quit when leadership is strong and there's trust in the organization. It depends on the ability of leaders to accommodate employees and see them as humans first," says Pietra.
The cost of demoralized employees is very high. According to Gallup, in 2023, a decrease in employee productivity due to quiet quitting amounted to $1.9 billion for employers in the U.S. When it comes to replacing employees, the cost of hiring a new employee is about $4,700. For an organization of 1,000 employees, the cost reaches $178,600 per year, according to a report by Great Places to Work. Comparatively, data shows that publicly traded companies where employees are engaged and not demoralized demonstrate stock performance (return on equity) 3.36 times higher compared to companies where employees are demoralized.
"Employers in Israel face unique challenges in retaining their employees, especially when many are required to enlist in the military or are otherwise affected by the situation, whether directly or indirectly. This understanding requires employers to act in several ways to encourage employee engagement," says Sharona Mizrahi, HR & Recruiting Specialist at Blumberg Capital.
To do this, she suggests starting with compassionate communication. "Employers need to prioritize clear and compassionate communication with their employees. Managers need to be accessible and available to listen to employees' concerns and provide reassurance where possible." Additionally, recognizing that employees may have commitments outside of work, she advises employers to allow flexible work arrangements such as remote work, adjusted schedules, or extended leave policies to accommodate employees' needs during this time.
She also suggests investing in identifying weaknesses and demoralized employees. "This period is an opportunity within organizations to pay more attention to each employee, to identify demoralized employees, to find their pain points, and address them individually." This may also include financial support if there are employees who require exceptional financial assistance.
Finally, she recommends that managers emphasize the company’s "long-term commitment to its employees and their well-being, and assure them that their work and livelihood are secure despite challenging circumstances. Transparency about the organization's resilience and contingency plans can help alleviate concerns about job stability."