The Great Resignation, Is It Real?

You’ve seen it in headlines across the world over the past few months. If you believe the news, it would seem that we’re facing unprecedented levels of uncertainty in the workplace, with many businesses at risk of losing all of their top talent. But, is this concern founded?

In this article, we’re going to dig deep to find out the truth about the Great Resignation and help you understand what it might mean for your workplace.

Let’s start from the beginning.

What is the Great Resignation?

This clickbait-y name comes from the notion that record numbers of workers had supposedly quit their jobs in the wake of the pandemic. It conjured up images of thousands of people walking out of offices simultaneously, leaving the CBD empty and workplaces lacking staff. The common consensus was that collectively people were fed up with their pay rates and working conditions, and the pandemic caused them to no longer want to put up with sub-par employment opportunities. It was reported on widely across the United States, and it definitely got plenty of air time here in Australia too.

What does the data show?

It’s true that the numbers of people quitting are high, with recent figures showing that 4.5 million people voluntarily left their positions in November last year. This data was reported as an all-time high, and it’s certainly left many managers feeling panicked. But is this fear warranted? We’ve done a deep dive into the stats and found some interesting insights.

The New Daily reported recently that the number of workers actually leaving their jobs is only slightly elevated if you look at a two year average. According to Bjorn Jarvis, head of labour statistics at the Australian Bureau of Statistics (ABS), the number of Australians who said they resigned to take a “better job” or because they “wanted a change” rose from 228,000 in February 2020 to more than 300,000 in August and November 2021.

But, importantly, this was only after it fell to 129,000 in May 2020 as COVID set in. One could assume this was due to many people worrying about job security at the time and, therefore, choosing to stay in their current role instead of seeking new work in a time of uncertainty. 

Labour market economist Professor Jeff Borland believes there’s actually no evidence of a Great Resignation in Australia when one key measure is considered: the intention to stay with one’s current employer. Looking at the data, the percentage of employed people who do not expect to be with their employer in 12 months has not shown a big increase that can’t be explained by catch-up effects.

“It’s a little bit above where it was, but that’s completely explicable in terms of catch up,” he said.

What is actually happening?

The reality is, there’s more “switching” than “quitting” happening. People across all industries aren’t just getting fed up and quitting on a whim. There’s more to it than that. The increase in quits is mostly about low-wage workers seeking better offers in industries that are raising wages to entice new employees as they grow. And it’s not all sectors. The accommodation and food services industries have by far lost the most employees, but that doesn't necessarily mean what you think. Yes, people have quit to seek better positions, but the industry as a whole hasn’t necessarily suffered from it. In fact, in the US, accommodation and food services added 2 million employees in 2021, more than any other subsector.

In comparison, quits aren’t rising much in finance, real estate, or the broad information sector, which includes publishing, software, and internet companies

Putting it into perspective

What does this all mean for your business? While you can relax a little knowing that the Great Resignation has been blown out of proportion, there are still steps that you can take to ensure you are able to find and retain talent long term. We’ve learnt from COVID that more and more employees are seeking flexible working arrangements and better work-life balance. How can you adjust your day to day operations to support a hybrid workplace? 

We also know that many employees are keeping their options open by applying for other positions, getting an offer and then using this as leverage in their current position. How can you prepare for these situations and how much room for growth do you have for salaries?

Finally, the pandemic has caused many to consider what meaning their current position has, and this has prompted some to look for it outside of their jobs. How can your workplace help individuals find more meaning, separate to or within their day to day work? It could be volunteering opportunities, pro-bono work, partnering with a charity, or organising more social events.

Are you a Leader or CEO who needs help adjusting your business in the wake of the new normal? We can help you understand where your business needs to change, and then guide you through the transition. Get in touch to find out more.