The Great Resignation

Does your company have more open positions than normal? Have you said goodbye to one-too-many colleagues lately? If either is true for you, perhaps your organization is feeling the pains of the Great Resignation. Long-considered a myth or academic theory, the Great Resignation is here and it’s real. Let’s explore this phenomenon and the impact it has on our American workforce and society.

What is the Great Resignation?

The U.S. has been in a labor shortage for quite some time. The assumption by many was that government assistance was discouraging labor participation. But, with the end of government assistance, labor participation has not increased.

In fact, the U.S. Labor Department tells us that people are resigning from their jobs in record numbers – 4.3 million people in August 2021, almost 2.9% of the country’s labor force. In addition, according to Gallup, almost 50% of working Americans are looking for a new job.

A recent article in Forbes is one of many to confirm that we’ve entered a new “era-defining” phase in the job market – the Great Resignation. By all accounts, it seems to be a collision between the American work-aholic culture and our post-pandemic new normal.

Who is resigning? According to a study published in the Harvard Business Review, it’s not service or low-wage workers who are the issue, although their jobs are vacant at high rates. The issue at hand is mid-career employees who had the highest resignation rates between 2020 and 2021. 

Here are the likely reasons for this exodus.

Delayed Job Changes

There is evidence that the trend of job exits actually started before the pandemic. The U.S. Bureau of Labor Statistics reported a record number of Americans quitting jobs in 2019. However, the data leveled out in 2020: logic would suggest that, in a period of uncertainty, people may have felt that making a job change was either not possible or not practical. As we emerged from the pandemic, perhaps the pent up demand for job change fueled an employment “musical chairs” of sorts.

This “delayed response” hypothesis for the Great Resignation does have potential. But the explanation is incomplete: it does not explain the net loss of employees overall – the number of open positions that companies have and the white collar labor shortage in the market.

And, other research suggests that the drivers of the Great Resignation are rooted in more complex issues around work culture, work-life balance, and quality of life. One safe bet: companies that offer the best working conditions, the most competitive pay, and highly rewarding work cultures have more jobs filled than others.

Job Dissatisfaction and Burnout in Corporate America

The Society for Human Resource Management (SHRM) recently conducted a workforce survey in an attempt to better understand the reasons behind the Great Resignation. They highlighted the contribution of poor management to overall employee dissatisfaction and burnout. One telling excerpt from their findings: “56 percent of people considering finding new jobs are doing so because of their managers.” Poor management has always been a challenge in corporate America, but the pandemic shone a light on the issue and made it tough to ignore.

In 2020, managers were not prepared to lead their remote teams – no one had a handbook for pandemic management. Those that rose to the challenge likely came from the strongest leadership backgrounds or had the most supportive workplace cultures and executive team. 

Suffice to say, companies that chose not to focus on leadership development prior to 2020 were certainly not starting during 2020. Therefore, bad managers didn’t magically improve during the pandemic and employees paid the price.

Bad management aside, remote teams also faced burnout. Several studies report that remote workers are working an average of two hours MORE a day than in-office employees. People working at home replaced their commuting time with working. In addition, remote employees have blurred the lines between work and personal life…the office is just down the hall and the computer is always on. 

Studies also show that remote employees are less inclined to take vacation – another indication that those working from home aren’t taking an opportunity to unplug.

The constant work mode, along with other stresses of living through a pandemic – parenting, managing health issues, greater isolation – have all contributed to a mental health breaking point and employees have had enough. 

Many companies are gladly accepting this new work mentality, ignoring the mental health ramifications. But, organizations concerned about employee retention are taking action to keep their work teams intact. Nike, for example, closed their corporate offices for a week to give their employees a paid break. This “forced” vacation was an effort to battle burnout and fatigue. According to senior leadership: “It’s an acknowledgment that we can prioritize mental health and still get work done.”

Reassessing Life Priorities

As with any major life event, the pandemic caused people to rethink priorities. For some, the issues may have been bigger than burnout. Perhaps they weren’t pursuing their passions or always wanted to be in a different field? Pew Research Center conducted a survey and found “66 percent of the unemployed had ‘seriously considered’ changing their field of work, a far greater percentage than during the Great Recession.” 

In our article about the U.S. skills gap, we highlighted that online training organizations such as Coursera were seeing a large spike in signups for technology-related courses. The opportunity to move from a slow-growth career to a fast-growth one may have been a lure. In periods of chaos, sometimes it’s actually easier to consider major life changes – the comfort zone is already disrupted.

But Where Did Workers Go?

The Great Resignation is more than people just changing jobs and seeking a better fit. The data shows that workers left the labor market. Can people truly afford to stop working altogether? The answer remains to be seen.

Many of the job exits in the first year of the pandemic were attributed to childcare issues; one parent, usually the mother, left their job to manage unpredictable school and daycare challenges. But now that kids are back to in-person education and activities, we should see a return of those parents to the workforce, right? Well, they aren’t back yet.

The story of the Great Resignation clearly isn’t over.