December 4th: the “great resignation” is not just a US phenomenon
There is a lot of convincing, and concerning, data and research out there about the “great resignation”—also described as the “great attrition” or the “great realisation” (as in, “I’ve realised life is short, and I don’t want to spend it doing a job I hate, with people I don’t respect, and with a horrendous commute every day”). In one survey, 40% of people said they were at least somewhat likely to leave their current job in the next 3–6 months. As we will see, even if only a tenth of them actually acted on their intention, this would be an enormous shift in the labour market.
However, most of the more comprehensive analyses on the phenomenon so far have tended to be US focused. (The survey mentioned above included the Australia, Canada, Singapore, UK and the US, but I suspect will have had a significant proportion of North American respondents.) Is the same phenomenon taking place elsewhere?
I will return to the topic for EU countries on another day. As for the UK, there are certainly indications that the great attrition is playing out here, too. Despite economic activity overall (as measured by GDP) still remaining below pre-pandemic levels, vacancies in November 2021 were at unprecedented levels, and at least by end of October, the feared spike in unemployment (as the furlough scheme came to an end) had not materialised.
Indeed, in the UK the number of people resigning from their current job and moving on to a new one was the highest it’s ever been, at nearly 400,000 in the 3rd quarter (July to September) of 2021. As the black line in the chart shows, as a proportion of underlying employment, the Q3 2021 figure was up there with levels previously only seen at the height of the boom preceding the global financial crisis.
There are undoubtedly many, many reasons why this is happening, but one may simply be the apparent tightness of the labour market: with so many options out there, people are feeling more confident about shifting jobs. In the same survey mentioned above, around 40% of those people who had recently quit had done so without yet having another job to go to, while around 65% of those considering quitting said they’d do so even without a job in hand.
Clearly, we have to remain cautious about people’s statements, as most of us don’t consistently follow through with what we might say in a survey. Whatever the eventual outcomes, I do hope that the situation acts as a “great realisation” for employers, too. Not necessarily that they have to pay people better (even though that may be the case sometimes), but that they are failing to meet fully people’s basic psychological needs at work. For retention — and, indeed, performance — it is the quality of social relationships at work (rather than pay and conditions) that matter most, on average.