What Is The "Great Resignation" And Who Does It Affect?

You might have heard the phrase “Great Resignation.” It’s showing up on all kinds of news outlets, but what are they talking about? Is it real? Who is it affecting?

What is the Great Resignation?

In 2019, an organizational psychologist named Anthony Klotz predicted that in the future there would be a mass, voluntary exodus from the workforce. Of course, Klotz did not predict what would trigger it, but it appears to be happening right now.

During April, May, and June of 2021, 115 million workers quit their jobs, a record. More than 40 percent of the U.S. workforce is actively searching for, or planning to search for, a new job. Turnover is up all over the country.

There does indeed seem to be something going on similar to what Plotz predicted.

Why are People Quitting Their Jobs?

So, why are people quitting what might look to be perfectly good jobs en masse? There are a variety of reasons, and they include:

A large number of job openings is turning this into a “sellers’ market” for employees. People can afford to take the risk of quitting because they know they will be able to find something else quickly. At some levels, once the Great Resignation started, it was bound to snowball for a while.
Some people have been affected by the pandemic in ways that have caused them to reevaluate their lives, including how many hours they work and how much time they spend with their families. Many are leaving jobs that expect long hours for ones with a more reasonable schedule.
During the pandemic work from home period, many employees moved to be closer to family or take advantage of lower housing costs. Many are quitting rather than moving closer to the office or asking for work from home to be extended then leaving for somebody who will give them permanent work from home.
Many workers in the restaurant and hospitality sectors have elected to avoid ongoing uncertainty by changing careers, or have changed careers to ones that result in less risk of exposure.
Increased demand during the pandemic has led to burnout and employees finally having enough and taking a stand against long hours and poor conditions. The strikes at snack makers Nabisco and Frito-Lay are also symptomatic of this, with the Frito-Lay strike, in particular, laying out how some companies have been treating workers during the pandemic.
Those who can take early retirement are looking at the global situation and deciding now is the time to pull the trigger.
Another subset of workers quit because they felt their employers were not taking COVID-19 seriously.

Most of these people are quitting to find other jobs, but some families have found that remote work has allowed them to move to a cheaper location and drop to a single income. Others have found the pandemic to be the perfect time to start their own business.

Who is Quitting?

While the Great Resignation is hitting across all sectors and industries, it’s hitting some areas harder than others.

First of all, in demographics, younger workers are more likely to quit than older ones. Loyalty to one job is historically lower in Millennials, and the younger generations and digital natives are more likely to embrace remote work. Black and Hispanic workers are quitting at higher levels than white employees.

In terms of industry, the Great Resignation is hitting certain areas harder, including:

Restaurants and hospitality
Retail
Manufacturing (hourly workers)
Technology
Healthcare
Finance

Burnout is cited as a primary reason in restaurants/hospitality, retail, technology, and healthcare. Meanwhile, some people who worked in retail or hospitality took hourly manufacturing jobs to survive and now want to return to those industries.

However, businesses in all sectors are being affected to a degree. Turnover is high across the board, and that’s bad for all affected companies. The cost of hiring new workers is high and talent has higher expectations. Competition for available employees is tough.

What are Companies Doing About It?

Some companies are struggling. Stories about restaurants, in particular, closing because they can’t find staff are all over the internet and come from many geographical areas. Other restaurants are increasing wages, although there have been stories about bait and switch wage increases.

Other companies are looking at the situation and working out how to keep their workers, although not all are succeeding. For example, large tech companies are extending work from home policies and making them permanent, although some are making it less palatable by forcing pay cuts on employees who remove to lower the cost of living areas.

Primarily, companies are finally starting to do something about burnout. Instead of seeing it as the worker’s problem that needed to be fixed with yoga and meditation. Some smaller tech companies are closing offices to force people to take a vacation. Others have been doing their best to reduce those annoying meetings that could have been an email. However, the best way to deal with burnout is to acknowledge good work and reward it, give employees as much control as possible, and keep workloads manageable.

Ultimately. though, the solution to the Great Resignation can only be a lasting shift in the power dynamic between employer and employee. Employees have more leverage right now, and many of them are using it, whether it’s to leave and find a better job or to get better treatment and pay in the job they already have. Younger workers in particular are looking to work for bosses who don’t just understand their goals but share them.

The Great Resignation is a real phenomenon, and it stems from pandemic stresses. Companies need to work with their employees to find out what they want and what will get them to stick around, and then deliver on it, regardless of what industry they are in. They also need to be willing to pay people what they are worth and keep expectations on them fair.

The world of work is shifting, and the full implications of some of those shifts won’t settle out for a while, but in the meantime, a lot of people have decided the job they have is not, in fact, the job they want.