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© Spencer Platt

The Great Resignation and the Main Forces Behind It

Published on October 25, 2021

The pandemic is receding. However, its disruption to the labor force is not ending soon.

Despite the COVID-19 leading to the worst recession in the U.S and many losing their jobs, many employers are complaining of an acute shortage in labor.

Recent trends have shown that nearly two-thirds of workers are on the hunt for a new job in a movement that has been named “The Great Resignation”. According to the Labor Department, a record of 4 million people quit their job in April.

Prior to the Labor Department’s revelation, a survey conducted by Microsoft in January 2021 found that more than 40% of workers globally are considering leaving their current jobs in the next year.

What Is the Great Resignation?

According to the Boston Globe, the term was coined by Anthony Klotz a Professor at Texas A&M to describe the higher-than-normal turnover rates of American workers in the spring and summer of 2021.

As the pandemic began receding due to the vaccination, Klotz conducted research to analyze why the unemployment rate decreased while job openings increased.

Work Has Become More than Paying the Bills

The Texas A&M professor cited burnout as one of the major reasons for the increased turnover.

“Lots of people experienced mild or major forms of trauma and lots of uncertainty about their life. Lots of people were having revelations about how they wanted to spend their time moving forward.” – Anthony Klotz.

In an interview with Fortune, Brooks Holtom, professor of management at Georgetown University stated that “Widespread self-reflection and the increased ability to work from anywhere is a perfect storm colluding against employers.”

According to NPR, the leisure and hospitality industry accounted for more than 740,000 workers who quit their jobs in April. This includes hotels, restaurants, bars, theme parks, and other entertainment centers. Workers interviewed by the NPR cited stress, fear of contracting the virus, and scant staffing as major reasons for quitting.

In an interview with Fast Company, Shahar Erez, CEO of freelance talent platform Stoke observed that “The Great Resignation” is propelled by three forces: “the changing generation, the economic crisis and people’s realization that they can spend more time with family and skip the commute.”

According to Erez, employees realized during the pandemic that there’s no job security, and as such, want to take charge of their future.

Neil Dhar, PWC’s chief client officer stated, “Simply put, many workforces are just tired, and they’re looking for a change.”

Another expert interviewed by Fast Company, Cassie Whitlock Head of human resource at BambooHR stated that “workers are seeking more rewarding work.” According to Whitlock, many workers have lost their sense of connection to their place of work. “They feel less seen, recognized, and appreciated, says Cassie.”

A Demand for Flexibility and Improved Compensation

The shift to remote work during the pandemic has made many workers rethink how they want to work. A survey by Prudential in late May showed that 48% of workers are rethinking what type of job they want.

As the pandemic eased, employers demanded that workers resume back to the office. However, many workers are of the opinion that the remote work arrangement was successful and are not ready to make the change back to the pre-COVID-19 era.

Tsedal Neely, a professor at Harvard Business School stated that workers now crave the flexibility given to them in the pandemic. According to Neely, who is also the author of Remote Work Revolution: Succeeding From Anywhere, “We have changed. Work has changed. The way we think about time and space has changed”.

A survey of 1,007 full-time and part-time workers by PWC in August indicates that many employees want a new model of work after the pandemic. Sixty-five percent of workers are looking for a new job, while 88% of executives said they are seeing higher turnover than normal.

The major reason for the job search for many is a better salary. The survey result showed that 46% of women say better pay was the biggest driver compared to 34% of men.

In a news report by NPR, Daniel Zhao, a labor economist with the job site Glassdoor said, “We haven’t seen anything quite like the situation we have today.” The NPR report further indicates that U.S. workers are looking for jobs that will let them earn more, as well as give them more flexibility and happiness.

Organizations’ Dilemma

The pandemic has made employees rethink their careers and question the role of work in their lives. According to Klotz, people have adjusted to the pandemic work life and believe that being asked to change will be difficult.

Flexibility and how their employers make them feel is a major concern for workers. However, employers are not certain on the type of work setup that is going to trigger resignations — whether it’s hybrid, all remote, or all in-person, according to Klotz. He observed that organizations would have to approach the situation like scientists — run some experiments on different setups to know what works.

Another expert, Cassie Whitlock, in an interview with Fast Company, indicates that companies that compel all employees to return to work are at the greatest risk of losing them. Whitlock encourages companies to offer flexible arrangements. “Provide employees the choice to select the setup that gives them the best support in their work and personal life,” says Whitlock.

Business Editor