The Great Resignation: Causes and Trends

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Introduction

Employees are at liberty to decide how long they work depending on the employment conditions, personal preferences, and other external conditions. The Great Resignation, often referred to as the Big Quit, is a continued economic movement that began in early 2021, predominantly in the United States, in which employees willingly departed from their positions en masse. Stagnant wages despite increasing living costs, economic freedom given by COVID-19 booster payments, long-term employment unhappiness, and COVID-19 pandemic safety worries are all possible explanations. According to the U.S. Bureau of Labor Statistics (2022), 4 million Americans resigned from their jobs. In July 2021, after resignations surged in April, leaving 10.9 million available jobs. In the face of such a tidal flood of resignations, employers need to consider ways of keeping their employees. Understanding the root causes of these alarming figures and the implications on HR is the first step toward addressing them.

The rates of work resignation have been trending upwards in the past few years. Recent social and economic changes are responsible for the trends in the great resignation witnessed in the recent past. The COVID-19 pandemic has significantly altered people’s perceptions of employment. Staying at home may have shifted some people’s perceptions of what is not required. Given the number of job postings, the number of persons quitting their positions is in accordance with predictions (US Bureau of Labor Statistics, 2022). This trend indicates that the volume and complexity of opportunities may be motivating resignations. More than 4.3 million people resigned from their jobs in December 2021 (down somewhat from over 4.5 million people in November 2021), but only 1.2 million were fired or laid off (US Bureau of Labor Statistics, 2022). The trends observed have maintained high resignation rates for the past two years.

Resignation trends seem to be determined by job positions, salary, and benefits. According to a Bankrate (2022) study, 55 percent of working or job-seeking Americans indicated that they were likely to hunt for a new position in the following 12 months. Specifically, 77 percent of Gen Zers and 63 percent of millennials planned to look for work, while 72 percent of individuals earning below $30,000 per year planned to look for work (Bankrate, 2022). Black and Hispanic Individuals were more enthusiastic about finding new careers. Workers over the age of 50 and those making well over $80,000 annually were less likely to look for jobs (Bankrate, 2022). Food and accommodation services (6.0 percent) and retail commerce (4.9 percent) had the highest resignation rates in December 2021 and also the highest number of job openings (US Bureau of Labor Statistics, 2022). Notably, the rise in resignation rates is directly related to the working conditions and individual job perceptions.

Root Causes

Work culture plays a significant role in determining employee job satisfaction and positions’ retainment. The primary work cultures, collaborative and individualistic, account for employees’ different work perceptions and reactions. Both cultural inclinations have contributed to the high resignation rates in many economic sectors globally in different ways. Although many people believe the employees are motivated by monetary benefits, Allman (2021) shows that workers are more inclined to personal growth and satisfaction. Individualistic organizations are characterized by control and employee manipulation. By viewing workers as mere tools for wealth generation, these organizations have failed to recognize the need for improving working conditions (Mondy & Martocchio, 2015). In such organizational cultures, employees experience limited opportunities for growth and career advancement, a trend that has led to high resignation rates.

Employee compensation has been a topic for discussion in many avenues. The subject of rewards is crucial because the employees’ determination, skills, and motivation affect an organization’s growth. Salary and benefits have been viewed as one way of retaining employees, although it has also contributed to unfavorable working conditions. According to Mondy and Martocchio (2015), employees need to feel well appreciated for their labor. However, many individualistic organizations hold employees’ salaries at a minimum, causing dissatisfaction and ultimately leading to resignation. Many employees who quit their jobs indicate their dissatisfaction with the compensation rates. Although workers understand the value of gaining skills and appreciate non-monetary benefits, failing to meet their personal needs causes all other benefits to lose meaning, ultimately forcing them to resign.

As the economic conditions shift, workers have realized the need for personal training and continuous improvement in the face of work uncertainties. While job specifications may remain the same, HR and potential employers have upgraded their hiring requirements. For this reason, employees tend to consider staying in jobs that offer them training opportunities and equip them with skills necessary for future opportunities. Mondy and Martocchio (2015) note that leaders who motivate employees to learn and provide the essential tools and prospects are more likely to have higher retention rates. Essentially, the detrimental impact of current working conditions on future employability has led to higher resignation rates.

Collaboration is the alternative culture to individualistic employer culture that has considerably affected people’s perceptions of work. Teams of employees who are acknowledged as crucial partners in operations and income generation constitute the collaborative workforce (Mondy & Martocchio, 2015). In such cases, employers are seen as inseparable from the monetary benefits accrued to the company. Workforce studies show that when employees cooperate, they work 15 percent quicker, 73 percent perform better, and 56 percent are more engaged, according to Harvard, Gallup, and other academics (Allman, 2021). However, even in collaborative work cultures, resignation rates have skyrocketed in the recent past due to burnout. After months of excessive workloads, recruitment restrictions, and other pressures, they hit a breaking point, forcing them to reconsider their work and personal priorities.

Employers’ Roles in Addressing the Great Resignation

Having understood the negative implications of the great resignation on businesses, employers need to develop practical solutions to minimize the resignation rates. The first step entails gaining a comprehensive view of the causes of the great resignation. Employers have to understand the specific reasons causing employee dissatisfaction or the external factors motivating them to resign. This is a crucial step because these factors vary among organizations. Allman (2021) argues that employers need to be more appreciative of their workers and endeavor to provide a healthy working environment. Recently, the impact of mental health on work productivity has gained attention, with employers being asked to facilitate the mental wellbeing of their employees through medical coverage and counseling.

In the face of global economic, political, and social challenges, organizations need to develop a culture of care. Mondy and Martocchio (2015) define this culture as providing administrative support for employees’ social, physical, professional, and emotional wellbeing. This can be achieved by equipping leaders with the necessary abilities, such as the capacity to empathize with employees’ reports by being directly involved in their work and personal lives. Employers should also change their views of employees’ roles in company growth. They should start viewing employees as crucial partners in their organizations as opposed to money-making tools.

HR’s Roles in the Great Resignation

To address the “Great Resignation,” HR professionals must work closely with business executives to guarantee that the workplace culture reflects the organization’s aims. Workers today desire to work for a firm that supports their values and allows them to make a meaningful contribution (Allman, 2021). All leaders must clearly define what the firm stands for and illustrate how the culture and attitudes reflect those beliefs in order to retain employees and increase engagement. A cultural shift should start from HR and be reflected by the executive management for employees to connect with it.

Diversity, inclusion, and equality are essential elements that HR needs to consider and implement in an effort to mitigate resignation rates. This begins at the recruitment stage, where HR managers have to shift their perspectives on potential candidates’ values and attributes. An organization’s value system should be communicated during the hiring process to ensure that employees are willing to abide by it. Hiring managers should promote equality by recruiting employees based on their professional suitability as opposed to age, race, color, or other affiliations.

Notably, judging new candidates on their skill sets rather than their employment history, college degrees, or other established qualifications can make it fairer and increase workforce diversity (Allman, 2021). An equitable workforce is more likely to collaborate, thereby developing a healthy work culture.

Work-life balance and the availability of personal development opportunities are some of the main attributes contributing to higher retention rates. The Bankrate (2022) survey showed that employees are looking for jobs that guarantee them both financial and personal growth. The lack of work-life balance has led to burnout, which is among the top reasons behind the rise in resignation rates. HR managers can solve this problem by providing platforms for rest and recreation and enabling personal development through seminars and workshops financing. If employees feel appreciated and cared for, they would be more willing to remain in their workplaces. However, it is crucial to understand that the current work environment may not be sufficient or the individual worker’s growth needs, calling for flexibility. Therefore, HR should periodically review their work policies and compare them with the industry trends to guarantee relevance.

Conclusion

The great resignation has been attributed to changing economic, social, and political environments. Research presented herein has shown that the resignation rates have been rising exponentially in the past two years. Many of the employees who resign cite poor working environments and the need for growth and development. Although some external factors are beyond the employer’s and HR’s control, they can improve internal workplace conditions to motivate employees to remain at work. The work culture is among the primary areas employers should focus on since it influences employee-employer relations and determines client relations. As the economy changes, HR should support employees’ career development through seminars and workshops to enable them to gain new skills relevant for future employability. Lastly, HR should constantly check the organization’s value system and update it accordingly.

References

Allman, K. (2021). Career matters: “The great resignation” sweeping workplaces around the world. Law Society of NSW Journal, (81), 46–47. Web.

Bankrate (2022). Survey: 55% expecting to search for a new job over the next 12 months. Bankrate. Web.

Mondy, R. W., & Martocchio, J. J. (2015). Human resource management (14th ed.). Pearson.

U.S. Bureau of Labor Statistics. (2022). Table 4. Quits levels and rates by industry and region, seasonally adjusted. U.S. Bureau of Labor statistics. Web.

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BusinessEssay. "The Great Resignation: Causes and Trends." December 20, 2022. https://business-essay.com/the-great-resignation-causes-and-trends/.