The Great Resignation stands out to me as a big surprise of the ongoing pandemic. People are leaving their jobs in record numbers. And this isn’t just in the United States — the Great Resignation is international. And it does not appear that it’s going to end anytime soon.
Who would have thought that in the face of the largest health calamity the world has faced in around 100 years people would leave their jobs in droves? What’s behind this unexpected phenomenon?
A Confluence of Factors
Though there hasn’t yet been time for extensive academic study of the issue, there has been some study. We do know that it is international, and we know it isn’t just entry-level workers.
Indeed, the Harvard Business Review (HBR) recently reported that resignations are being driven by mid-career workers, those ages 30 to 45. The youngest and oldest age brackets actually show a decrease in turnover year over year. So much for the idea that it’s disillusioned kids.
We also know from the HBR study that the largest turnover has been in the medical and technology fields, both of which have seen a significant increase in demand for workers.
In the plethora of articles on the subject, there seems to be a lot of speculation as to the cause, with ideas such as employees not being heard or burnout being ascribed as major factors, but with scant evidence. What we can say with certainty is that things have changed, this is a major movement, and not everyone is leaving for the same reasons.
Undoubtedly some people left their jobs because they were burned out or didn’t feel heard. These were issues before the pandemic as well, and aren’t likely the major driving forces at this point. There are a few things that emerge as themes as a result of the pandemic.
Reassessment During the Great Resignation
There’s evidence that many people have used the pandemic as an opportunity to reassess their relationship with work. Certainly most people had a direct connection with loss during the pandemic. A lot of people died; many more were very sick. Mortality may have seemed abstract but suddenly became very real.
The way we work was also thrown into upheaval.
Those who were chained to a desk in an office found themselves working in their homes. Some of them were able to ditch difficult and time-consuming commutes — and don’t want to go back. Others found they were able to accomplish far more without the steady erosion of time that comes from being in direct contact with others.
There’s not a single standard for reassessment; people come to their own conclusions their own way. But there seems to be a significant number of people who have decided that they like this “new” way of work and don’t want to go back to the old. Some of them are making changes to make sure they don’t need to.
There has also been an uptick in entrepreneurship. It’s too early to say how much of an impact this has had on resignations, but there have been many new ventures formed since the start of the pandemic. We don’t know the magnitude of this factor, but it is there in some fashion.
Risks of the Great Resignation
Employees are more likely to change jobs during periods of economic expansion. That’s been the rule for decades. And it makes sense: It is easier to change jobs when jobs are abundant, and it is more comfortable to change jobs when jobs are abundant. It is more comfortable because of lower perceived risk.
If you take a risk to start a new job when jobs are plentiful, you have lower perceived risk; if the new gig doesn’t work out well, you have many other options. If you change jobs when jobs are scarce, you have higher perceived risk; if the new gig doesn’t work out well, you could be stuck.
There seems to be some confusion that people are changing jobs in droves, yet the economy is not in that zone of robustness usually associated with high turnover.
This missing ingredient here is that employees don’t consider the health of the economy overall in their assessments, not generally.
They consider the health of the job market, and there are many available jobs and that doesn’t appear to be changing soon. That’s what lowers the risk of changing jobs, not the number of quarters of consecutive economic growth.
More Risk
Risk also plays into the early losses in the hospitality industry. NPR reported that the early wave of resignations was led by hospitality. Certainly this is due to a number of factors, including reassessing and wanting something different from their work. But the hospitality field was also hit exceptionally hard by the pandemic.
One thing a hospitality worker could always be certain of was that there was another job available just around the corner. If you worked in hospitality, you may not have had the best working conditions or made the most money, but if you wanted to work you could always work — until the pandemic.
Hospitality uniquely underwent a shift, from being a low risk of unemployment occupation to being a much higher perceived risk of unemployment occupation. Some workers may have been asking themselves how they would get through another shutdown or another variant.
Hospitality work doesn’t lend itself to the accumulation of wealth that makes it easy to weather the storms. Some workers either can’t or won’t take that risk again.
Responsiveness
Some employers are compounding the problem. They’re offering the world to new workers without making adequate adjustments to how they are treating their existing employees.
People don’t like to see new people getting hired at higher wages than they earn and with a signing bonus, especially after they broke their backs to help the organization “work” through the pandemic. They quickly find out they can get higher wages, and possibly a bonus, if they change employers.
Many employers are not adjusting nearly as quickly as they need to.
The Bottom Line on the Great Resignation
We will most likely get some really solid studies coming out on the Great Resignation across the coming months and years. I expect the academics will do a just job of showing us the significant causal factors. And though there are a number of factors, some are likely more prevalent than others.
We know for certain that the phenomenon is new, it’s worldwide, and it came about in the midst of the pandemic. We know that there has been a tectonic shift in the relationship between workers and work, and that is not likely to go back to the status quo.
The pandemic robbed people of power over their health and their day-to-day lives, and people have grabbed some of that power back in control over what they do for work and who they do that work for. This may be part of the new normal.
