Great Resignation has not slowed, with employees still quitting jobs in record numbers, even as recession fears grow. A recent survey showed that around 40% of workers are thinking about leaving their jobs in the next three to six months, the same number as in 2021. It’s clear that the Great Resignation will have a long-lasting impact on the future of work, redefining the workplace as we know it. Below we explore the effects of Great Resignation on the labor market and the hiring tips companies can use to hire and retain employees during and beyond the Great Resignation.
What is Great Resignation?
The Great Resignation - also sometimes called the Big Quit - is an ongoing phenomenon involving the higher-than-usual number of employees voluntarily leaving their jobs. This phenomenon officially began around late 2020, although some data shows that it began more than a decade ago. During the Great Resignation, people started thinking about their careers. Low salaries, poor work-life balance, and feeling disrespected are among the top reasons why millions of Americans quit their jobs.
Effects of Great Resignation on Labor Market
The Great Resignation has significantly impacted both large multinational corporations and small businesses, from higher turnover to increased competition for talent. Many employers have to adapt to the changes in the labor market. Some companies are switching from working in person to offering hybrid or full-time remote work options. Others are reconsidering the benefits and salaries to meet the needs and expectations of job seekers and existing employees.
In fact, research shows a positive correlation between the share of employees leaving their jobs and the wage and price inflation rate. This relationship may be surprising at first, but talent competition may explain it. The employer that intends to poach the talent from their current employer has to offer a large wage to make the offer attractive. In this context, if employed workers search more, salary competition among employers increases.
Employees quitting jobs doesn’t just mean a position is open, but the company is faced with lower productivity - the result of a decline in morale and remaining employees struggling with higher workloads.
The Future of the Great Resignation
Between 4.1 and 4.5 million people have quit their jobs this year. This means that 2022 can surpass 2023 in terms of the overall number of job quits. Will this trend continue in the near future?
Keving Harrington, the CEO of Joblist predicts that the Great Resignation phenomenon is likely here to stay:
"Job openings are close to record levels, and with the rise of remote work and interviewing, it’s never been easier for employees to switch jobs in search of greener pastures. As long as the market rewards job switching, employees will continue to pursue this path in large numbers. I do not see this dynamic changing anytime soon.”
Keving Harrington
The HR Industry Trends Report found that 76% of surveyed HR managers in the U.S. thought that the change in the labor market accompanying the Great Resignation was permanent. It’s hard to predict whether the attrition movement will be permanent, but it will definitely stay here in the near future.
Hiring During the Great Resignation
Since there are about 1.9 job openings for every unemployed worker as of September 2022, employers must reconsider their old recruiting strategies and explore new ways of hiring and retaining talent. First of all, employers should listen to their employees. Employees want to be challenged by their work, learn something new, and take on increased responsibilities. Employers should consider their desires to make sure they are satisfied with their current job and place of work. Employers can also offer more accommodation work arrangements, including hybrid work, remote work, and flexible schedules.
Dr. Simone Philpps, Middle Georgia State University associate professor, summarizes the critical points of hiring during the Great Resignation:
“Employers must understand the real value and importance of their employees and reflect this understanding via fair policies, fair compensation, fair workloads, authentic recognition, and equal employment opportunity including opportunity for advancement. Employers must also understand that workplace dynamics are changing and employees need flexibility to achieve much needed and deserved work-life balance. “
Dr. Simone Philipps