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How global is the Great Resignation?
Since early 2020, the COVID-19 pandemic has sent a new shockwave to the global economy seemingly every week.
Since early 2020, the COVID-19 pandemic has sent a new shockwave to the global economy seemingly every week.
Whether it was global supply chain disruptions or Redditors taking on Wall Street, researchers have been watching closely for new disrupting factors in the market. By the second year of the pandemic, the U.S. saw a new trend picking up steam: more and more people were quitting their jobs. By November 2021, the country experienced a record-setting spike as the U.S. Department of Labor and Statistics reported 4.5 million workers leaving their roles.
Dubbed the Great Resignation, a term coined by Texas A&M University professor Anthony Klotz, the pandemic has caused more people to reassess their relationship with employment. American workers who sought new employment opportunities in 2021 surveyed by the Pew Research Bureau cited three top factors for leaving their roles: low pay (63%), no opportunities for advancement (63%) and feeling disrespected at work (57%). Previously, American workers endured less-than-ideal conditions due to not wanting to leave secure jobs, despite being unhappy in their roles. The exodus has been multigenerational, with 5% of those leaving their jobs being Baby Boomers, 31% being Generation X, 50% being Millennials, and 80% being Generation Z. With more time at home and more stressors factoring into daily work life, it seems everyone has hit their breaking point at the same time.
As most of the conversation surrounding the Great Resignation has focused on the U.S., the question remains: how global is this phenomenon really? At that, if the Great Resignation is truly global, how should employers cope with this changing relationship to employment?
Several data sets show that the Great Resignation has indeed spread outside of the U.S. According to a recent survey by Microsoft, at least 40% of the global workforce is considering quitting or moving roles in 2022. In addition, a survey conducted by the Organization for Economic Cooperation and Development (OECD) showed that across 38 member countries, approximately 20 million fewer people are working than before the start of the pandemic, with 14 million more people self-identifying as “not working” or “not looking for work.” Taking a closer look at specific areas of the world, the contraction and expansion of job opportunities during and after lockdowns have caused each region to react differently, especially within the context of each state’s level of economic development.
In Europe, countries are experiencing a shortage of skilled and seasonal migrant labour due to pandemic border closings. Germany and Denmark have experienced a decrease in meatpackers and hospitality workers, with the German Federal Employment Agency predicting that the country will need to obtain 400,000 skilled workers per year to keep up with gaps in the market. The U.K. also faces labour shortages because of lingering border closings, however, the country is also grappling with the impacts of leaving the European Union and ending the free flow of movement between it and continental Europe.
For Latin America and the Caribbean, over 26 million people lost their jobs due to pandemic shutdowns. As people return to work, according to the United Nations International Labour Organisation, there are fewer full-time or permanent roles available and therefore workers have been undertaking informal work with higher levels of instability. This massive change in employment opportunities has negatively impacted the region’s economic development, giving way to great income inequality.
High levels of inequality had already plagued the region, and therefore unlike the impacts in Europe, Latin America has not had the same opportunities for workers to leave their roles in pursuit of something better. In a survey of garment workers in Honduras, conducted by the University of Sheffield and the U.S.-based Worker Rights Consortium, a majority of garment workers who have switched jobs during the pandemic have instead faced lower pay and riskier working conditions, as well as having to incur debt or borrowing money from family members in order to stay afloat.
Moving over to Asia, China’s own Great Resignation has seen younger workers walk away from their 9 to 5 office jobs in pursuit of freelance work, as a way to have better control over their work-life balance. The pandemic has also increased the popularity of “lay flat,” a lifestyle where people opt out of the ambitious, fast-paced working world in favour of low desire and low consumption. Overall, young people are disrupting the workforce in similar ways to their counterparts in the U.S., as they move away from the desire of previous generations to have job security and steady income to instead focus on having more free time.
During the global shutdown, some workers in Vietnam opted to return to rural areas when work was no longer available in bigger cities. Many have decided to stay in rural areas, what the Washington Post called its own form of resignation. Similar to workers in Honduras, some of those who opted to stay in big cities faced unsafe working conditions in order to keep up with demand, particularly in the fast fashion industry.
Singapore has seen a similar Great Resignation to the U.S. According to the Qualtrics 2022 Employee Experience Trends report, only 53% of Singaporeans said that they plan on staying at their current employers in 2022, the lowest percentage in the Asia Pacific. Many cited issues regarding hybrid work environments, with 36% reporting that their productivity has been impacted by insufficient technology and resources. People also responded that well-being in the workplace has decreased, with only 56% of Singaporeans stating that their well-being is favourable, below the global average of 67%.
The Great Resignation was set to hit Australia this year, as experts predicted a record-high resignation rate for March. However, some experts pushed back at this notion, arguing that resignation rates in the country were in fact declining instead of climbing. In October, LinkedIn Australia reported a 26% increase in people moving companies compared to 2019. In-demand jobs— for example, information technology, legal, HR, life sciences, mining, and accountancy and finance—have experienced an increase in bargaining power and overall wage growth. Vacancies in Sydney and Melbourne peaked last May prior to the Omicron-related lockdowns, soaring to a record 369,900 openings.
From Macro to Micro: How should employers respond?
Now that we have a better idea of the big-picture trends, what lessons can employers take away from this shift in employee attitudes? Companies have little control over compounding political factors such as border closures and other pandemic-related anomalies, but there is a lot of opportunity for reflection in the day-to-day operations. Organisations seeking to retain staff and avoid high turnover should assess how best to invest in their employees, according to Klotz, but any move should be in line with the company culture. Investment in employee retention can fall into three categories: workplace culture, benefits and remuneration, and opportunities for development.
Culture goes beyond the mission statement of an organization. According to a study covered in the Harvard Business Review, 30% of new hires left within the first three months of employment due to organisational culture and mismanagement of expectations. Having strong internal communication that builds trust is one of the most important ways of ensuring employees feel heard and that their concerns are taken seriously. Advice articles for people who are considering quitting their jobs state that they should attempt to talk to their manager or HR first to see if there is a way to address their concerns, but if there is not a strong workplace culture around raising issues, that is nearly impossible. Culture also extends to what benefits or accommodations companies are willing to offer, with a particular emphasis on flexible and remote work that became commonplace during lockdowns.
Benefits and remuneration
Flexible and remote work are two areas where workplace culture ties into employee benefits and remuneration. As stated above, a high amount of people who left their jobs at the beginning of the Great Resignation cited low pay as a driving factor for leaving their role. Having clear guidelines for raises and financial incentives for a job well done far surpasses the impact of an employee pizza night. For start-ups, one way to retain employees is by offering employee share schemes, which are a great way of helping people feel invested in the work that they are producing. But start-up employers should take care in how they design their employee share scheme and how they communicate it effectively to their employees as it could become a wasted effort if not valued by employees.
Opportunities for development
Clear, stated opportunities for professional development are vital to employee retention. Aside from the traditional ways of looking at development—through paying for professional development courses and offering clear steps for career advancement—another tactic to consider is job-sharing schemes. Job sharing is where a full-time role is undertaken by two or more employees, and in some cases can be an opportunity for a more junior employee to upskill in a more senior role. There are many benefits to providing this option, including offering senior staff more time off, having a larger talent pool for certain skills, increasing productivity, and ensuring smoother succession planning.
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