You’ve seen it across the media over the last few months. Americans are quitting their jobs like never before. The obvious reason for such a sudden change in the job market is the impact of COVID-19. But in reality, the pandemic is only partly responsible for a shift that is fundamentally changing the relationship between employees and their employers, and the responsibilities and expectations on both parties in the future.
Condeco has created a three-part series that reads between the lines and explores the consequences of the Great Resignation on the future of work. In future parts, we’ll take a look at how businesses can best respond to the turbulence, and why getting that response right can turn the crisis into an opportunity. But in part one, we’ll investigate the drivers behind it all, including those connected to the pandemic – and those that aren’t.
The numbers don’t lie
First of all, let’s look at the basic facts of the Great Resignation, and just how big a trend it is. According to the U.S. Department of Labor’s Bureau of Labor Statistics, 19.78 million American employees either quit their jobs or found new ones between April and August 2021, peaking at 4.3 million in the month of August alone. Given that the World Bank estimates the total U.S. labor force numbers around 165 million people, that means approximately one worker out of every eight quit their existing job – in just a five-month period.
There has been an assumption that it’s lower-waged and lower-skilled jobs that have been driving much of the wave of resignations, but that’s not necessarily true. The retail, hospitality and food beverage sectors have seen particularly high rates of quitting, but even highly prized professions like IT have been hit, too. A recent Robert Half International survey found that nearly a third of IT pros are planning to look for a new job in the next few months, in an industry comprising around 4.8 million positions in the U.S. at present.
More concerning, meanwhile, is the fact that the Great Resignation isn’t going to go away anytime soon. McKinsey research has found that an incredible 40% of workers are likely to leave their jobs within the next three to six months: that’s potentially more than 65 million people. Business leaders agree with this assessment, too: 64% of them expect that, over the next six months, voluntary turnover will stay at elevated levels or even increase further.
The ten driving forces of the Great Resignation
So what’s behind this all? Well, it’s undeniable that the impact of COVID-19, and the consequences of lockdowns, workplace restrictions and heightened employee concerns around their health have all played their part. But there’s so much more to what is driving the changing workplace than that.
There are ten key drivers that are all contributing to the Great Resignation. Five of them are directly connected to the pandemic, and five are either knock-on effects or are barely related to COVID-19 at all:
The COVID factors
- Return-to-office inconsistencies: different employers have applied very different policies around when and how to bring employees back into the office, leaving many employees confused and pressured by employers to return to office work against their will.
- Enjoyment of home working: a significant number of employees prefer home working, enjoying their own space, as well as the time and money saved through not commuting. These employees will resent being forced back into office work.
- The lingering pandemic: emerging variants and (in some places) slow vaccination uptake have both hindered a return to normality, either through fear of COVID infection in the office, or through vaccine mandates locking people out of the office.
- Burnout: long periods of isolation through lockdown and other restrictions have taken their toll on employees’ mental well-being, and prompted them to look for an alternative that is less stressful or pressurized.
- Work-life balance: the pandemic has been an opportunity for reflection for many employees, and a chance for them to pursue an alternative job that fits better with their personal life.
The societal factors
- Wages: the age-old motivator of money is just as relevant now as it’s always been, and many employees will still move to a new job if it means they can bring in more income, over any other consideration.
- Greater financial freedom: the shutdown of large parts of the economy through the pandemic meant people spent less and saved more. This has given more of them the financial means to quit their jobs and support themselves for however long it takes them to find a new one.
- Lack of trust and autonomy: the employer/employee dynamic has been damaged by the pandemic, partly because many employers didn’t trust their workforce not to slack off when working from home. According to Gartner, 75% of senior leaders feel they take employee perspectives into account when making decisions, but only 47% of employees agree.
- Peer influence: most people will know at least one friend, relative or co-worker who has resigned recently, and the positive experiences of quitting being shared can be an inspiration to others, and encourage them to make the jump themselves.
- A robust job market: more people leaving jobs means more jobs are available, giving employees confidence that if they leave their existing job, they stand a better chance of finding a new one quickly.
A problem businesses can’t ignore
Given the scale of the Great Resignation and its continuing impact, it’s clear now that it is not some passing fad that businesses can wait out. It isn’t simply going to blow over, and those organizations that think it will are very quickly going to find themselves at a major disadvantage, both in the job market and operationally.
In an interview with the BBC in June 2021, Ross Seychell, the Chief People Officer for HR software company Personio, highlighted the damage that en-masse resignations can have upon a business: “When there’s a lot of people moving, that costs companies in terms of turnover and lost productivity. It takes six to nine months to onboard someone to be fully effective. Companies that lose a lot of their workforce are going to struggle with this over the next 12 to 16 months, and maybe much longer. Companies that don’t invest in their people will fall behind.”
With job vacancies up and hiring slow, finding new employees to replace the ones resigning is a major issue for the C-suite, the boards they report to, and shareholders. Employee turnover is now a constant and persistent challenge, competitively and economically.
A coordinated, planned response is needed – and it’s needed quickly. In the next blog of the series, we’ll explore what that response should look like.
This Condeco blog series has been created to help businesses maximize the opportunity that the Great Resignation presents, and create better future outcomes for employees through control and flexibility over how and when they work.
Read the second blog in the series: How business leaders must respond to the Great Resignation.
To explore how flexibility can help in more detail, download our free eBook guide: The Great Reward.