Do you need to worry about the Great Resignation?

Let’s be realistic, the media isn’t exactly famed for keeping a calm and level head. Indeed, simply the term ‘The Great Resignation’ is designed to instil fear and angst. So what really is it, and do you need to worry about it?

What is the Great Resignation?
The Great Resignation is the hyperbolic nickname for the scale of movement we’re currently seeing in the jobs market. It encapsulates the fact that there is, and is set to be, a lot of movement. This is denoted in data in terms of the number of people firing up Word and knocking out a resignation letter.

And it’s true – when we dive into these figures we can see some notable things. Around a quarter of UK workers are planning to change jobs in the next few months. Typically, around 11% of workers consider changing their job at any one time, so we’ve got quite a spike in numbers going on. Indeed, this spike represents the highest levels of resignations that we’ve seen in 20 years according to the UK Labour Force Survey (LFS).

But as always, whole numbers don’t tell us the whole story. We can’t argue that those numbers aren’t significant in real terms, but the reason they stick out so sharply is because of the unusual conditions and numbers of the pandemic. If you compare them to pre-pandemic levels, and put them in context, it’s not so alarming.

We always see people hunkering down and laying low during times of uncertainty and we always see people feeling more confident and taking advantage of opportunity when that recession period passes. And it’s even more noticeable this time because we plunged into recession with alarming speed and are coming out equally rapidly – that V everyone was banging on about. In other words, on the face of it, there’s nothing particularly surprising in what we are seeing.

Who is resigning?
However, we do need to look at the data more closely, and we need to understand why it’s happening, and indeed, if it’s a problem that it’s happening.

And this is where it gets quite fascinating. There are two ends of the spectrum driving this: the young and the business leaders. 74% of 18-24 year olds and 77% of 25-34 year olds are looking to secure a new position in 2022.

The other group standing out is CEOs, with around double the normal rates of resignations. Bear in mind that many of these could be delayed or sped-up retirement, due to the pandemic.

Why is the Great Resignation happening?
This is where it all gets a bit murky. The mainstream belief is that a swathe of workers has become burned out and become disillusioned by the pandemic and are packing up (their backpacks in some cases) and heading off for a different lifestyle. We’re being painted a picture of those ever moaned about Millennials throwing the concept of work out of the window as they all hop on planes and travel the world. Realistically, do you know anyone who could get their heads around the PCR tests needed for that? I’ve just come back from a trip to Rome and that was bad enough with all the last minute changes to entry/exit requirements!

There is a grain of truth in it; you only need to speak to your friends and neighbours to gather that the last 18 months have taken their toll. But a grain of truth is all it is. And whilst people may well be feeling disillusioned and burned out, they aren’t leaving their jobs and never looking back in terms of their existing skills, industry and sector. When you look more closely at what’s going on, these people are often moving within their industry. Indeed, more people are moving within the same industry now (57%) compared with around 50% just before the pandemic. We may well be re-examining our lives, but we’re doing it from a new role, not a new lifestyle or new industry.

And we can understand this further when we look even more closely at who those young people are that are resigning and moving. They aren’t skilled professionals. They are generally low paid low-skilled roles, according to the 2010 Standard Occupational Classification. They are in sectors such as customer service, retail, hospitality, agriculture, factory work and similar.

Indeed, there’s some discussion emerging that maybe it’s societally a good thing and that maybe these traditionally minimum-wage earning individuals are gaining more power over their self-direction and pushing for changes, specifically in terms of working conditions. Typically, these workers haven’t had much choice, but with the high demand in terms of vacancies, they currently do have choice. They are likely to opt for a minimum wage role in a more appealing sector than earn the same low wage in a harsh environment. There isn’t the same concept that they have to take what they are offered, without any thought to what they want.

Is the Great Resignation a problem for employers?
With all of the information to hand, it’s possible to see that the Great Resignation means different things to different types of employers.

What’s hard about it for employers of the low-skilled and low paid is that this is a very different landscape to what they’ve had before. In many ways, previously, there were candidates on tap. Without this, they have to actively attract candidates. They may have to offer wage increases.

For employers of professionals, it’s a different picture again. You don’t need to have the mass panic that the hyperbole of the media is stoking. However, you do need to be aware that it is very normal, after a period of hunkering down, for people to consider a change. And if you don’t want to lose their skills, you’re going to have to do something to attract them to stay. Take active steps to remain an attractive employer.

You also need to be realistic about the costs of recruitment. You will need a bigger budget next year. To illustrate that, it’s worth noting that a worker resigning can cost you as much as £25,000.

And then there are the CEOs. Recruitment at this level is always complex. You’ll need to draw on skilled and experienced executive recruiters and headhunters.

But just as surely as 2022 will see high numbers of resignations and job changes, the cycle of the job market will change again. It always does, it’s only a matter of when.

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