In May 2021, Dr Anthony Klotz, a psychologist and professor of business administration at Texas A&M University, coined a famous phrase when he said “the great resignation is coming” in an interview with Bloomberg Businessweek. He predicted a sustained mass exodus of workers.
During the early days of the Covid pandemic in the United States, more than 20 million people lost their jobs, many temporarily. Thereafter, 2021 was defined by a market recovery. Employers started complaining about their difficulty to find available workers. According to Randstad NV, a global provider of employment services, the “Great Resignation” shows no sign of slowing and a dwindling supply of workers may be here to stay. This shortage has meant that many companies are competing for workers by raising wages, adding cash bonuses, and offering other incentives to attract applicants.
More insights and indicators
- Some commentators suggest that the pandemic is best thought of not as a “pause” before returning back to “normal”, but as a complete reset of what constitutes work, workers, and the workplace on a global scale.
- By September 2021, the US resignation rate was not evenly spread. There were relatively low increases in some sectors compared to the 12 months prior. This was the case for financial, information, and government services. There was also no increase in the professional and business services sector.
- In contrast, the resignation rates were particularly high in the hospitality sector (6.4%) and the retail sector (4.4%).
- A December 2021 survey by Indeed (a jobs site) of roughly 1,000 workers in Singapore found that almost half of the respondents were unsure if they would stay in their current positions over the next 6 months. Nearly a quarter intended to leave their employer in the first half of 2022.
- In September 2021, LinkedIn tracked the percentage of members worldwide with recent job changes on their LinkedIn profile. They found a 54% year-to-year increase. LinkedIn CEO Ryan Roslansky refers to this as a “Great Reshuffle”. The year-to-year increase in job changes is reflected per generation:
Gen X (31%)
Gen Z (80%)
- LinkedIn data for January 2022 also showed a notable increase in the number of workers switching industries in Spain, the Netherlands, and Italy compared to early 2021.
The main causes of the exodus
A new Pew Research Center survey highlighted the following reasons:
low pay (63%)
a lack of opportunities for advancement (63%)
and feeling disrespected at work (57%)
At least a third said that each of these were major reasons why they left. Another important factor was the need for more work-life balance and flexibility.
For the most part, workers who quit their jobs in 2021 and now employed elsewhere see their current work situation as an improvement. Over half of these workers are now earning more money (56%), have more opportunities for advancement (53%), have an easier time balancing work and family responsibilities (53%), and have more flexibility to choose when they put in their work hours (50%).
In another survey, conducted by Randstad, one-third of the participants said they left a job because it didn’t fit their personal lives. More than half of Millennials and Gen-Z respondents said they would quit a job if it prevented them from enjoying life. Although 83% and 71% of those polled say flexible hours and workplace were important, respectively. According to the report, most said they feel like they don’t have a choice of where to work, and two in five can’t control their hours.
The Future Forum report published in January found that 53% of workers in France and 55% in Germany and Japan are open to looking for new jobs in the next year. That number rises to 64% in Australia and 60% in the United Kingdom.
Reward management platform Remchannel, a member of the Old Mutual Group in South Africa, suggests that employers need to reconsider their employee value proposition and retention policies if they are to retain their brightest staff. According to the group’s survey, 36.4% of the labour turnover resulted from resignations over the past 12 months. The total sample of employees covered just over 618,000 people. This uncovered an average turnover rate of 17.7%, just under 40,000 employees resigned from 82 companies.
19% indicated that they left for better pay
53% indicated that they’re leaving for a better working environment, improved career opportunities, or avoiding a toxic environment citing bullying or harassment
20% said they were leaving for greater work-life balance or to avoid burnout and stress
Addressing any potential impact on your company
Here’s a list of actions that can be considered:
- Improve the company’s effort in terms of personalizing the work experience for every individual employee. Provide more role clarity, task clarity, and structure (viz. rules that cannot be compromised, high self-responsibility, and conscientiousness).
- The pandemic pushed many people to new levels of stress and anxiety. Recent global events with an increase in the cost-of-living are adding to the tension. It’s important to maintain both empathy and compassion.
- Leaders (including CEOs) should put effort into understanding people’s challenges and their working conditions. This includes, wherever possible, to identify flexible work arrangements such as working times, working places, and workplace setups.
- Attract and employ highly trustworthy and committed individuals in line with the company’s purpose and values.
In April 2022, the term #greatresignation had over 158 million views on TikTok. On the same platform, #quittingmyjob had 121.6 million views. Social media is full of quitting buzzwords on numerous feeds. These posts range from being vulnerable, angry, painfully honest, and liberated. People are explaining the working conditions that pushed them over the edge by giving takes on their individual circumstances. The result is the employee exodus of 2021 has kept up momentum well into 2022.
It’s fair to believe that people did not become super unhappy with their jobs overnight. This is something that’s been building for years. As a result, it’s beneficial for your HR team to uncover the current work mood and Employee Experience at your company. This is not a once-off exercise. Also important is to ensure that every employee, desked and deskless, feels like they are treated equally with respect, and are seen as a valued part of the company’s mission.
A healthier workplace, collectively, would be an ideal outcome of resignations worldwide. Ideal, rather than idealistic.