Economists are calling it the Great Resignation. People are leaving their jobs in droves, and there’s no indication that this mass exodus will slow any time soon.
The term was coined by Anthony Klotz, a professor of management in Texas, who in May 2021 said a wave of resignations was coming as people digested the lessons of lockdown and reimagined what normal life should look like. After working from home for months, with no commute and more time with family, many people have decided it’s time for a change.
This trend is most pronounced in the US. The so-called ‘quits rate’, a measure of voluntary resignations per month, rose in August to an all-time high – 4.3 million people, or 2.9% of the entire workforce, according to the US Bureau of Labor Statistics. In the leisure and hospitality industry, which was battered by COVID-19 restrictions, the rate soared to a record 6.4%.
In the UK, nearly a quarter of employees plan to leave their job within the next three to six months, according to a recent survey by the recruitment firm Randstad. What’s more, almost 70% of respondents said they were confident at the prospect of changing jobs.
Why are many people quitting their jobs?
People are quitting for a variety of reasons. Klotz said there have been “pent-up resignations” that didn’t happen in the worst of the outbreak when many people felt stressed and insecure. Some people may have made the decision in light of generous government benefits put in place during the pandemic, and others were probably just hunting for a better salary.
But there seem to be deeper reasons behind the historic exodus.
Many people are exhausted and burned out after working too hard for too long during the pandemic. Take junior bankers, for example. Long, gruelling hours were always part of the job, but that seemed to intensify over the past year and a half as the pace of dealmaking quickened. Many entry-level bankers decided enough was enough.
In response, banks boosted starting salaries past $100,000 in a bid to lure and retain talent. But even that hasn’t always been enough. A recent study in Harvest Business Review found that resignations have been highest in industries that experienced a surge in demand during the pandemic, led by tech and health care.
Rising mental health concerns
The turmoil of the pandemic took a heavy toll on everyone. When employers didn’t provide sufficient support for their workers, the tough times got even tougher. Just two-thirds of respondents in a recent survey commissioned by Modern Health said their employers cared about their mental wellbeing.
That perception of employers’ indifference or lack of support is leading some workers to look for jobs elsewhere. A third of workers – managers and non-managers alike – said in the survey that they were considering changing companies for the sake of their mental health.
Not surprisingly, addressing burnout, as well as the grief and loss many people have endured, is one of the key challenges for employers trying to hold on to their best workers, according to McKinsey & Company.
Flexible working is here to stay
The way we work has changed drastically since the pandemic began. After months of working from home, freed from the expense and hassle of commuting and with more time for family and other pursuits, a lot of people are reluctant to return to the office full-time.
More than a third of respondents in a recent Beamery survey said their work-life balance was better at the height of the pandemic, and 42% want flexible working to continue. Many companies are responding by embracing flexible schedules as part of the new normal.
A range of studies has shown that resignation rates have risen fastest among mid-career employees, led by those with a tenure of five to 10 years.
This may reflect the fact that many people delayed making a move in 2020 because of heightened uncertainty, as well as increased workloads and burnout. And women are quitting at higher rates than men, a trend that pre-dates the Great Resignation but has accelerated in 2021, according to Visier.