What Is The Great Resignation and What Can We Do About It

©Professor Chris Rowley

Complygate, Feb 2022

Introduction

An important and topical work, employment and human resource (HR) issue that gained massive traction during the Covid-19 pandemic is the so-called ‘Great Resignation’ and the numbers of people quitting jobs. A preliminary point to make is quitting may be of two types (voluntary or involuntary) with two destinations (for other work of various kinds or some level of retirement). We look at the ‘Great Resignation’ in terms of presenting some background to it - where it came from and what it means, looking at what has driven it and finally noting what management, organisations and employers can do to try to ameliorate it and prepare and build resilience for future labour market turbulence.

Background

The term ‘Great Resignation’ seems to have been created an US-based academic to capture the greater numbers quitting jobs. For example, the US Labor Department recorded that 47.4m Americans voluntarily left their jobs in 2021. This was about 3.9m each month, with an increase in November 2021 to 4.5m (up 370,000), as the quit rate increased to 3%, with the largest increases in: 1) food services; 2) health care and social assistance’ 3) transport, warehousing and utilities. There are also surveys also showing large numbers considering quitting too, even having their resignation letters ‘ready to go’ (Bondarenko, 2022).

The media in other countries, such as the UK, have also taken up this story and their version of it. For example, the ONS noted 791,000 (2.6% of the workforce) moved jobs from April-June 2021, the highest number since March 2019 and before that, in a decade (Dimsdale and Ferguson, 2021). The UK Labour Force Survey (November 2021) showed resignations and job-to-job moves at their highest level in 20 years (Swindells, 2021). UK official data suggested people were resigning at highest rate since 2009 and that high levels are leaving the labour market entirely and that redundancies were at their lowest levels since the mid-90s and open vacancies the highest on record and a tight labour market (Williams-Grant, 2022). Again, there are surveys showing high levels of intention to leave, especially among young, Gen Z workers (Dimsdale and Ferguson, 2021).

However, there are some ‘Great Resignation’ sceptics. For example, in the US the data is not concrete, much of the debate can often be just about thinking about intention to quit, resignations often increase when economies are strong and quits are not evenly spread, with more in food service and retail, but which historically have high quit rates (Lukin, 2021). In the UK there are also some enhanced resignation sceptics (Seenan, 2022).

Causes and Consequences

Nevertheless, the drivers underpinning such an employee exodus include the Covid-19 pandemic. This changed how many people approached everyday life and what was considered a ‘normal workday’. The pandemic ushered in a host of cultural and societal changes that influenced the way many workers evaluated both their job and the organisations they worked for. Thus, reasons to quit included not only better opportunities but also changes in life circumstances and fear, burnout and professional frustration turbocharged by the pandemic. There were the infection dangers to front line/key workers while many others took on extra work as teams downsized, some felt careers atrophied as training and advancement were delayed. Then there was the loss of childcare and school closures forcing full time caring and home schooling onto working parents also adjusting to ‘Working From Home’, which in turn led to re-evaluation of priorities. These can be seen as part of the package of ‘existential epiphanies’ (Lukin, 2021) in relation to work-life balance generated by Covid-19.

Interestingly, we can usefully see such changes in other long term and more recent developments. For example, there has been a trend of fewer annual hours at work in many countries. Even in an epicentre of long working hours, South Korea, annual working hours have been declining from 2,163 in 2012 to 2,069 in 2018 to 1,908 in 2020. As a comparison, in the same year the UK worked 1,367, more than in Denmark, 1,346 and Germany, 1,332 but less than Japan, 1, 598, Canada, 1,644 and the US, 1,767).

More recent trends include those indicating some people are reappraising views of work and the ‘work ethic’. This is even in Japan, the land of the fabled ‘salaryman’, with their over-riding loyalty and commitment to the company and ‘karoshi’ - death due to overwork or work-related stress and exhaustion - culture. This is countered by Japanese ‘Freeters’ (a portmanteau of ‘free’ from freelancer and German ‘Arbeiter’ or labourer) not in full time employment or under-employment. In South Korean there are ‘slackers’ and now recently the Chinese has the kick back form the ‘996’ culture of working 9am to 9pm 6 days a week to the ‘Tang Ping’ or ‘lying flat’ movement - where younger workers especially show antipathy and only doing the bare minimum to get by.

Advice for Employers

For some there is a clear need for an employer data driven approach to discover not only the number of quits, but who is quitting, why they are quitting and preventing quitting, and so the importance of retention (Cook, 2021). This sort of approach has 3 steps (Ibid.):

• Quantity Problem eg a) rates on retention, voluntary resignation, layoffs, firings, b) impact of resignations on key business metrics.
• Identify Causes eg metrics, such as compensation, career development, training opportunities.
• Develop Retention Programmes

In addition to this, organisations and employers can better prepare for the next ‘Great Resignation’ and other labour market turmoil. This involves a bespoke and judicious mix of the following ingredients to be ‘FLEAT’:

• Flexibility enhancement by offering more flexible work options and employment terms.
• List and clearly set out your own ‘USP’ of core values and culture of working for you.
• Encourage and support better and enhanced work-life balance.
• Assess your benefits, from pay and conditions to the working week.
• Trust and utilise what you already have by using your internal labour market better as you will have many great staff and so recognise, reward and retain them.

Conclusion

The ‘Great Resignation’ phenomenon can be debated in terms of its extent and the ‘rhetoric versus reality’ in the area. Nevertheless, it is an important topic as it has put the issue of the vast range and types of work and why people might quit – or remain - in the media spotlight. Thus, it should be used as an opportunity to talk about more than just pay and to include overall company ethos, culture and image and working conditions and what it takes to get people to remain committed to keep working for you to the best of their abilities.

References

Bondarenko, V. (2022) ‘Great Resignation (Letter): Workers Are More Ready To Quit Than Ever’, The Street, 3 Feb

Cook, I. (2021) ‘Who Is Driving The Great Resignation’, Harvard Business Review, Sept Dimsdale, C. and Ferguson, E. (2021) ‘ “The Great Resignation”: Third of Millennials Say They’ll Quit Their Jobs if They Have to Go To The Office More’, iNews, 1 December Lukin, B. (2021) ‘What We’re Getting Wrong About The ‘Great Recession’ ’, BBC Worklife, 29 Oct

Seenan, A. (2022) ‘Majority of UK Employees Say “Great Resignation” is Over-Played’, HR Director, 17 January

Swindells, K. (2021) ‘What We’re Getting Wrong About the “Great Resignation” ‘, New Statesman, 16 November

Williams-Grant, O. (2022) ‘ “Great Resignation” Sends UK Quit Rate4 to Highest Since 2009’, Evening Standard, 23 January