The Big Quit goes global
The Big Quit goes global: The so-called “Great Resignation” has been making waves in the US this year as record numbers of Americans have quit their jobs. But the phenomenon isn’t particular to the American labor market: companies in countries around the world are starting to struggle finding and retaining talent for skilled and unskilled positions alike, a trend that could undermine the global economy’s recovery from the pandemic.
“The great resignation is coming”: So said organizational psychologist Anthony Klotz in an interview with Bloomberg in May, who coined the term in anticipation that a flood of people in the US would soon quit their jobs.
His prediction seems to have stacked up: US labor market data published a few months following the interview showed that a record 4 mn people resigned from their jobs in April. Subsequent months provided corroborating evidence, with resignation rates setting new record highs in July, August, and September, which saw 4.4 mn people hand in their notices.
His reasoning: Klotz claims that the covid pandemic is driving a fundamental realignment of values among many workers in the US. Because who we are as employees is so central to our identities, the disruption faced during the pandemic, whether triggered by layoffs, WFH, burnout, or contact with illness and death, gave people reason to stop and think, and in some cases reconsider their priorities.
Economic fundamentals seem to underpin the existential motivations: Conditions for workplace discontent in the US existed years before covid came and forced the cognitive shift theorized by Klotz. Compared to other developed countries, working conditions in the US aren't great, with laxer regulations giving workers fewer employment rights, declining wages, and weakened unions.
It’s not just an American phenomenon: A Harvard study of 9 mn employees at 4k companies around the world found resignation rates to be highest among 30-45 year-old mid-career employees, with an average increase of more than 20% in 2021 from a year earlier. The tech and healthcare sectors saw unusually high resignation rates, which the study attributed to increased workloads brought about by the pandemic.
Chinese youth are laying flat: There are signs in China that younger generations of workers are beginning to reject the country’s tough working culture and seek out alternatives. ‘Involution’ — a social scientific term originally coined to describe the point where population growth fails to produce greater output — has recently gained currency among the youth, who use it to express a feeling of being burned out by the system. In response, a growing movement is calling on people to ‘lay flat’ i.e. abstain from career-chasing, exit the workplace and reject consumerism. Now, the country is beginning to suffer from labor shortages in both high-tech industries and lower-skilled factories.
A similar trend is being seen in other Asian countries: Recent research has found that companies in Indonesia, Malaysia, Thailand, and the Philippines are all finding it harder to find and keep talent. Discontent with workplace conditions is leaving companies struggling particularly to retain and replace mid-career skilled professionals.
This isn’t quite a workers of the world unite moment. On the other side of the Atlantic, there are no mass resignations and unemployment rates are slowly but surely returning to pre-pandemic levels. While that hasn’t stopped people from rethinking their relationship to work on the continent, according to Euronews, it hasn’t created the mass disruptions being seen in the US either. On the whole, European recovery plans, which kept employees on payrolls rather than providing unemployment support, have helped workers maintain their relationships with their employers, providing a valuable lesson about how to manage labor during a crisis. Europe’s traditionally strong labor market institutions have given workers more outlets to express grievances, making it less likely that people would quit en masse.
In the US, there might be more than meets the eye: The record figures seen this year doesn’t necessarily indicate a sudden swell in the number of people wanting to quit their jobs. The disruption caused by covid likely resulted in more people hanging on to jobs that they were ready to leave, creating an estimated 3.7 mn “missing quits” that clocked in this year, Daniel Zhao, senior economist at Glassdoor, told Business Insider. Others have argued that the US labor market was tight before the pandemic and point to population growth halting for the first time in US history last year as a key factor making it tighter.
But there does seem to be a shift, with employees gaining leverage and employers rethinking priorities. As workers gain the upper hand in their relationships with employers for the first time in a generation in the US, employers are raising wages, training more people and taking chances on those that don’t have qualifications — not to mention being more flexible about how and where people work. Additionally, many low-wage laborers that lost their jobs during the pandemic are reconsidering their options, seeking to bolster their qualifications and add skills as they look to shift careers or find jobs closer to home, while others are looking for jobs that help them achieve better work-life balance or more flexible work conditions. A comparison of a 2013 and 2020 survey of knowledge workers revealed that they were more productive, wasted less time, took more responsibility for their own schedules and viewed their work as more worthwhile when working from home.
Is this the beginning of the future of work? The pandemic, which in many ways acted as a catalyst for the future of work, normalized remote white-collar work, resulted in the more rapid automation of service work and altered retail workflows so that fewer employees could fulfill the same workloads. Leadership, innovation and organizational researcher at the Technical University of Munich Dr. Isabell Welpe, argues that Decentralized autonomous organizations (DAOs) are the next stage of organizations. In plain English, as individual and asynchronous work become more common, the one-size-fits-all approach that once defined workplaces is just not sustainable. And as the nature of work changes, employers will have to adopt new leadership styles that privilege self-leadership through greater responsibility and accountability over control.