Is there really a ‘great resignation’?

One of the unex­pect­ed out­comes of the coro­n­avirus pan­dem­ic has been the upheaval of how we work. From hybrid work­ing to the need for new skills to changed expec­ta­tions of what an employ­er should offer, Covid-19 has impact­ed how, where and why we work.

This has, in turn, led to both employ­ers and employ­ees reassess­ing what they need. And this reassess­ment has led many to label what is going on at the moment as the ‘great res­ig­na­tion’.

Des­per­ate times call for des­per­ate mea­sures. And major moments of upheaval are wont to have unex­pect­ed con­se­quences. In the case of the Covid-19 pan­dem­ic, hun­dreds of thou­sands of employ­ees have decid­ed it is time for a new chal­lenge in what is being called the ‘great res­ig­na­tion’. 

What does the big quit look like in numbers?

Cer­tain­ly, peo­ple are talk­ing about the great res­ig­na­tion. Data from Google Trends shows it was a term that was bare­ly used before June 2021 but expe­ri­enced a huge spike in Octo­ber.

The data would sug­gest peo­ple are not just talk­ing about resign­ing. The total num­ber of res­ig­na­tions in the UK hit a 12-year high in the third quar­ter of 2021 — a high that was made to feel even more dra­mat­ic by the huge drop in res­ig­na­tions at the start of the pan­dem­ic. Job vacan­cies are also at record lev­els, reach­ing almost 1 mil­lion in the same peri­od.

Dr Char­mi Patel is asso­ciate pro­fes­sor of inter­na­tion­al human resource man­age­ment at Hen­ley Busi­ness School. She believes the con­di­tions have been per­fect for the mass move­ment of jobs due to the push of the pan­dem­ic and pull of new roles. 

“Sud­den­ly, the very micro con­cept of leav­ing a job — which peo­ple always do, for numer­ous rea­sons — becomes a macro thing, trig­gered by an exter­nal envi­ron­men­tal event, like the pan­dem­ic,” she says.

“But we’re not sim­ply see­ing peo­ple resign­ing,” she con­tin­ues. “We’re see­ing exces­sive mobil­i­ty of employ­ees. Peo­ple are quit­ting jobs and join­ing oth­ers which they think are a bet­ter fit, because job vacan­cies have risen but the sup­ply of tal­ent for those jobs has not risen in the same way.”

Back in 1997, man­age­ment con­sul­tants McK­in­sey coined the term ‘the war for tal­ent’ to describe an increas­ing­ly com­pet­i­tive land­scape when it came to attract­ing and retain­ing cer­tain, specif­i­cal­ly tal­ent­ed employ­ees. Patel now believes this def­i­n­i­tion of tal­ent has broad­ened to include all work­ers, mak­ing the com­pe­ti­tion even stark­er.

“There are a lot of jobs avail­able and less tal­ent sup­ply, with that same tal­ent mov­ing across many jobs. This is why peo­ple are talk­ing about this as a great res­ig­na­tion,” she says.

Despite, or per­haps because of, this, employ­ment lev­els have remained rel­a­tive­ly high. The fur­lough scheme ensured there were no mass job cuts dur­ing the worst of the pan­dem­ic-induced lock­downs and since a low of 74.7% at the end of 2020 and into 2021 have been on the rise again, hit­ting 75.4% in the third quar­ter of 2021 (the most recent data avail­able).

Employ­ment lev­els remain much high­er than his­toric lev­els and the slight down­turn dur­ing the pan­dem­ic was minor com­pared to events such as the 2012 finan­cial crash or reces­sion of the ear­ly 1980s.

What is driving the great resignation?

The data on res­ig­na­tions, vacan­cies and employ­ment lev­els sug­gests 2020 was a year that employ­ers put the breaks on hir­ing and employ­ees stayed put, mean­ing the great res­ig­na­tion is in many ways a nat­ur­al reac­tion to the econ­o­my reopen­ing, and both com­pa­nies and staff rethink­ing their needs. 

How­ev­er, Bri­an Kropp, chief of HR research at Gart­ner, believes there were more influ­ences at play, at least for work­ers. He points to three major fac­tors impact­ing this mass move­ment of work­ers.

The first, he says, is that a grow­ing econ­o­my needs lots of peo­ple want­i­ng to work. The sec­ond is that the pan­dem­ic prompt­ed many peo­ple to realise they want some­thing dif­fer­ent from their job and life.

He explains: “The idea that [mov­ing jobs] is all about the role and how much I get paid and how quick­ly I get pro­mot­ed has changed. Now it’s more about being able to spend time with your fam­i­ly and on your hob­bies. That is caus­ing peo­ple to shift what it is they want to do.”

The third fac­tor dri­ving the great res­ig­na­tion is the rise in remote or hybrid work­ing. “In a remote/hybrid world you’ve got more oppor­tu­ni­ties, which gives you more choice. And you have few­er friends at work, which means the cost of quit­ting is less,” says Kropp. 

For employ­ers, how­ev­er, this new­ly empow­ered work­force pos­es a chal­lenge. While 2020 was a year of tur­bu­lence, of pro­tect­ing cash flow and halt­ing ambi­tious projects, it was also a year of sav­ings. Many com­pa­nies froze hir­ing, get­ting more out of their exist­ing employ­ees. Most firms also shut their offices, lead­ing to a drop in clean­ing costs, elec­tric­i­ty bills and oth­er real estate expens­es.

This com­bined with stim­u­lus spend­ing from the gov­ern­ment, while many British busi­ness­es ben­e­fit­ed from CBILS (the coro­n­avirus busi­ness inter­rup­tion loan scheme) or the fur­lough scheme.

“You put all of that togeth­er,” says Kropp, “and it’s real­ly a shift in terms of where com­pa­nies can spend mon­ey.” 

Unfor­tu­nate­ly, while busi­ness­es were hir­ing less the labour mar­ket moved on. In this new world, employ­ees and can­di­dates are much more in con­trol.

“If, as an employ­ee, I need my employ­er less than I did before, I have more options,” explains Kropp. “And that is a sus­tained shift that will be there no mat­ter what.”

How should employers respond?

With recruiters now oper­at­ing in an incred­i­bly com­pet­i­tive mar­ket, the need to dif­fer­en­ti­ate from oth­er poten­tial employ­ers has nev­er been greater. Chris Adcock, man­ag­ing direc­tor of recruit­ment spe­cial­ists Reed Tech­nol­o­gy, says the num­ber of live oppor­tu­ni­ties on his company’s site is the high­est he’s seen in his 16-year career. 

The high demand from employ­ers has so far gone unmatched by inter­est from can­di­dates, mean­ing that Adcock prefers the term ‘great flir­ta­tion’ to great res­ig­na­tion. “Peo­ple are start­ing to dip their toe in the water and have a look at new oppor­tu­ni­ties but we’re not see­ing peo­ple actu­al­ly mak­ing moves yet,” he says.

With hir­ing plans in the pri­vate sec­tor ris­ing three per­cent­age points in the third quar­ter of 2021 – tak­ing them above pre-pan­dem­ic lev­els for the first time – the pres­sure to find tal­ent is only going to grow.

“As with any skills short­age, clients are strug­gling,” Adcock explains. “We’ve had plen­ty of clients who are com­ing to us and proac­tive­ly say­ing they will pay more to try and get hold off the best tal­ent quick­ly.”

As they look to make them­selves a more attrac­tive propo­si­tion for prospec­tive can­di­dates, employ­ers are con­sid­er­ing a range of perks. These include salary rais­es, addi­tion­al time off, bet­ter ben­e­fits pack­ages, improve­ments to the work­ing envi­ron­ment and more remote work­ing oppor­tu­ni­ties.

This is broad­ly in-line with what employ­ees are look­ing for from a new job, with high­er salary and more flex­i­ble work­ing arrange­ments in the top five rea­sons for peo­ple chang­ing jobs.

How­ev­er, com­pen­sa­tion is not be at the top of every poten­tial new employ­ee’s list of pri­or­i­ties and Adcock warns that busi­ness­es should make sure they “appeal to the indi­vid­u­al’s moti­va­tions for join­ing the busi­ness, not just to the broad­est base”.

One thing is clear, this move­ment of work­ers does not appear to be over. A sur­vey by CV Library found that 76.4% of the UK work­force intends to look for a new job this year, mean­ing the land­scape for employ­ers could get even more com­pet­i­tive.

And while the temp­ta­tion might be to focus atten­tion on these new recruits, tak­ing care of cur­rent staff is equal­ly as impor­tant.

“Some can­di­dates feel that their cur­rent employ­er has­n’t looked after them as well as they want­ed dur­ing the pan­dem­ic,” says Adcock. Now that the Covid sit­u­a­tion appears to be more sta­ble, many work­ers are fed up and ready for a job move. 

“It’s very expen­sive to replace peo­ple; you’ve got recruit­ment fees, increased salaries, train­ing costs and oth­er hid­den costs. So com­pa­nies need to work on reten­tion too.”

Many busi­ness­es are aware of this and do see their cur­rent stuff as key to deal­ing with vacan­cies. Upskilling staff is the sec­ond most pop­u­lar way to fill hard-to-fill roles, although widen­ing the poten­tial pool by look­ing at appren­tice­ships, hir­ing under-used groups such as ex-offend­ers and mak­ing more effort to recruit old­er works is also key.

Whether it real­ly is a great res­ig­na­tion or more of a great re-eval­u­a­tion, employ­ers are like­ly to face recruit­ment chal­lenges in the short- to medi­um-term at least.

“The mar­ket has gone through a rapid change,” Adcock says. “It will revert back to being can­di­date heavy even­tu­al­ly but it could be a long time before it does, the pace of change will be slow.”

Busi­ness­es will there­fore need to be pre­pared to expand their arse­nal in the ongo­ing war for tal­ent.

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