The Great Resignation

“The Great Resignation” keeps growing before our eyes. The term "Great Resignation" was coined by Anthony Klotz, a professor of management at University College London's School of Management, in May 2021, when he predicted a sustained trend of mass exodus. This revolution in the world of work appears to be continuing apace, with around 40% workers globally planning to quit in 2022, a number that hasn't changed much in recent months. A survey by Microsoft in March found that 41% of workers were thinking about leaving their jobs, and another survey this month (July) by McKinsey put that number at 40%.

Possible causes include potential for better monetary compensation, better work-life balance, entrepreneurial pursuits or alternative career pursuits could be triggering employees to resign. Pandemic life forced everyone to re-examine their personal and professional priorities. There’s been a fundamental shift in workers’ mentality, and their willingness to prioritize other things in their life beyond whatever job they hold. Some economists have described the Great Resignation as akin to a general strike.

What Reasons Did Workers Give for Quitting Their Jobs?

The top three reasons people gave for quitting their employment during this wave of resignations, according to polls conducted by McKinsey worldwide, were limited opportunities for advancement, poor compensation and feeling disrespected at work. Younger persons and those with lesser salaries quit at higher rates than older adults and those with higher incomes, according to the study. ?

In USA, barring the following year since start of pandemic, quit rate as a %of total employment has never crossed 2.4% per month in last two decades. High quit rates indicate worker confidence in the ability to get higher paying jobs, which typically coincides with high economic stability, an abundance of people working, and low unemployment rates. As the pandemic continued, however, workers quit their jobs in large numbers despite continued labor shortages and initially high unemployment.

While in India, according to a recent DigitalOcean survey in Indian IT sector, better compensation along with remote and flexible work setups are the key drivers leading young developers to switch employment.?Let us look into some of the factors that has fueled mass resignation trend in India & globally:

1.???Rise in start-ups: The entire start-up ecosystem in India has come a long way in the last decade. With easier availability of capital and high internet penetration, we are seeing new ventures emerging in e-commerce, ed-techs, logistics, SAAS, EVs & financial services. In last year FY22 itself, we saw?44 unicorns emerging in India. More and more people are quitting their jobs to start their own ventures.

Start-up hiring has gone up manifold. Again, leading to more choices for the current workforce to switch if they want.

?2. Work-life balance:?The pandemic, consequent lockdowns and complete shift to remote working setups inspired people to re-evaluate the concept of quality work. While fair pay provides the foundation for a good lifestyle, most employees are now relying on parameters of work culture and sense of purpose in exploring job opportunities.

3.???Digital transformation-Rise in Jobs-: The pandemic necessitated rapid digital transformation like never before. Lockdowns forced organizations to expedite their digital roadmap, which in turn prompted a rise in software adoption and a commensurate demand for developers. Many people also believe that the sudden, enormous demand for developers was a crucial factor in the emergence of the "great resignation" trend.

4.???Rise in remote jobs:?Work from home has opened up new avenues for employees. Companies based in the US & Europe realized it’s far more affordable to hire talent from developing countries like India. Thus, creating more remote jobs for not only the current workforce to choose from but remote jobs for college students and remote jobs with no experience. This also offered more flexibility and autonomy to employees.

Do workers now have more bargaining power than they did before 2020?

In general, the conditions that existed during the Great Reshuffle shifted a degree of balance of negotiating power from employers to workers. But will that continue? In general, workers' (and job seekers') negotiating power increases when labour demand increases and the unemployment rate decreases. Intriguingly, a wave of unionization initiatives followed the Great Resignation, suggesting that this altered power balance may have contributed to a revival of the labour movement.

The quit rate has fallen somewhat from its 2021 peak, but as of late June 2022, it remains relatively high globally. Unionization efforts are still on the rise, and workers are learning about their rights and collective power. Given the Great Resignation’s generally upward trajectory and the resurgence of the labor movement, it doesn’t appear as if the Big Quit is going anywhere anytime soon.

References: https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/the-great-attrition-is-making-hiring-harder-are-you-searching-the-right-talent-pools

https://fortune.com/2022/07/21/great-resignation-40-percent-want-to-quit-where-are-they-going/