The long-term implications of the Great Resignation


Although resignation rates are at an all-time high, much of what we are seeing now is not so much “The Great Resignation” as “The Great Reshuffle,” said Steven Karau, Gregory A. Lee management professor. at Southern Illinois University. Carbondale.

It studies the phenomenon and its causes, impacts and implications for the future.

There have been big changes in the job market before – in times such as the Industrial Revolution, the Great Depression and the Great Recession – but “The Great Resignation” is different because much of the employees are now in the driver’s seat.


“The pandemic has led many people to rethink their careers and long-term goals,” Karau said. “They are looking for a better work / life balance, more flexibility, the ability to pursue their passions and a less controlling work environment. High quit rates create an abundance of job openings and this raises the bar for pay, benefits and flexibility. This shows the importance of companies offering intrinsic motivations such as growth, success and meaning as well as extrinsic motivations such as compensation and benefits in getting the employees they want and need.

It didn’t necessarily start that way. While COVID-19 caused global shutdowns in the spring of 2020, there have been large-scale layoffs. Karau notes that in March and April 2020, 13 million and 9.3 million workers (representing 8.6% and 7.2% of the workforce, respectively) were made redundant. “Locked-down” industries have been particularly affected, including service businesses and child care centers.

However, as the job market slowly began to reopen, instead of scrambling to take any available positions, more and more people began to quit their jobs.

“A lot of people are leaving their jobs voluntarily,” Karau said. “Since 2000, there have never been more than 2.4 million people who quit or quit their jobs in a month. But since May, the numbers have only increased, reaching the highest total in November, when 4.5 million people voluntarily left their jobs. This represented 3% of the workforce and 3.4% of the private sector workforce, leaving 10.5 million jobs vacant in the United States.

In October, the US Bureau of Labor Statistics reported that the quit rate had fallen slightly to 2.8%, the first drop in months. The reprieve was only temporary, however, as the quit rate for November, released on January 4, again hit the previous high of 3% in September. Thus, in November, 4.5 million people voluntarily left their posts, an increase of 370,000 compared to the previous month. The latest report also says hires remain virtually unchanged at 6.7 million while the layoff and layoff rate also remained unchanged at 0.9 percent.

Steve_Karau-sm1.jpg Karau notes that the largest increases in dropout rates have been recorded in accommodation and food services (159,000), health care and social assistance (52,000) and transportation, warehousing and utilities (33,000). Large establishments with 1,000 to 4,999 employees have been the hardest hit by people leaving their jobs, but virtually every industry has felt the impact, and in the small business world, the loss of even a few employees can make a big difference.

The big why

There are several reasons for this happening, according to Karau.

“The levels of job dissatisfaction are high,” he said, pointing to several research studies.

For example, a July study by the Society for Human Resource Management of 1,150 U.S. employees found that:

  • 52% said their professional demands have increased.
  • 53% were considering better job opportunities.
  • 55% did not think their salary was adequate.
  • 42% wanted a better work-life balance.
  • 42% thought about quitting more often since their colleagues quit.

“It’s a vicious cycle,” Karau said. “As quit rates increase, the remaining overworked employees hate having to work even harder to manage the workload. “

On top of that, many companies have had to offer higher salaries and / or bonuses to attract new employees. If these do not match existing employees, issues of fairness and equity arise and longtime loyal employees may feel overlooked or underestimated and consider leaving, Karau noted.

Karau also said that an August PricewaterhouseCoopers poll found that 65% of those polled were looking for new jobs and 88% of executives described their company’s staff turnover rate as above normal. . Another 2021 survey found that among Millennials, 64% believe they are underpaid and at least half are considering quitting their jobs because of their managers.

“One of the things we are really seeing is resistance to authoritarian or overly controlling management styles,” Karau said. “People are tired of being disrespectful and being told what to do. It is psychological reactance, resistance to perceived attempts to deprive someone of their freedom or to limit their choices. Employees want to be respected, appreciated and to feel like they are contributing to the common good and to have a sense of personal growth.

Other signs of employee dissatisfaction are the Striketober strike in October and the recent surge in organizing successes across the country, Karau noted.

“Vaccination mandates also have the potential to exacerbate the problem or serve as a tipping point for some dissatisfied employees to finally quit,” said Karau. He noted that in some places, employees quit their jobs rather than getting vaccinated or undergoing regular testing.

No return

Over time, employers continue to have difficulty filling positions. Karau said that the available research shows that some people cannot return to work for various reasons, some do not want to, others are determined to get the job, benefits and / or conditions they want while others decided the time was right. right to take a new direction. Additionally, some people have chosen to take early retirement and others have chosen to take sabbaticals.

Karau noted the important role of COVID-19 in these changes. At the start of the pandemic, the closure of countless daycares prevented some parents from returning to work. The government provided stimulus payments and widened the social safety net, and many people also “lived lean, saved a little and learned they could get by on less,” said Karau.

In addition, a strong economy just before the pandemic and the meteoric recovery of the stock markets afterwards allowed some people, especially in the upper middle class, to build up substantial savings or investments, thus reducing the pressure to accept any job. Because many had at least a temporary financial “cushion” or had learned to live on less, they were unwilling to settle for a job that would make them miserable.

A variety of other factors also came into play that may have changed the course of history and created a new sense of empowerment within the workforce, Karau said. As the pandemic progressed, millions of employees have discovered the flexibility, productivity and opportunities of remote working and they are not ready to give it up. They are looking for ways to work remotely, or at least in a hybrid remote / office arrangement.

Some people are looking for higher wages or better benefits. Many are looking for a better work-life balance. For others, it’s about finding a job that better matches their values ​​and gives them a greater sense of personal fulfillment. For some it means a new job, for some a new career. Some are taking advantage of the current hiring crisis for better positions. A significant number are also going into business for themselves and the number of self-employed people has returned to pre-pandemic levels, he noted.

What can be done?

Some business leaders are taking action to counter the “Big Resignation,” also known as “The Big Resignation” or “The Sales Tsunami,” and recruit new employees, Karau said. What this looks like may vary from business to business and location to location.

“This creates an opportunity for companies that are ready to be progressive and flexible to create a more transformative and rewarding employment experience that is mutually beneficial for the employee and the company,” Karau said.

Some of the strategies companies can use to recruit and retain employees include:

  • Higher salary.
  • More competitive advantages.
  • Alternative working arrangements such as a hybrid plan that allows employees to work remotely for at least a few days.
  • Collaborative work environments, where employees are involved in planning and decision making.
  • Select managers with good social skills or high “emotional intelligence” and provide advice on how to create a cooperative and respectful organizational culture.
  • Other benefits that make employees feel valued and invested in. It can be as simple as giving them flexible working hours and participating in planning their working hours.

He said 2022 will be a “very eye-opening” year as many transitional resources and government supports expire and shrink.

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