The COVID-19 pandemic changed our world as we know it. Over just two years, many things will never be what they were before.
The corporate workforce had to bear the significant brunt of the pandemic. A few sectors continued to be operational, and 1.5 million people had lost their jobs by March 2021 in the United States. As for people who voluntarily quit their jobs, the number is even staggering at 19 million as of April this year.
Another paradigm shift came in office structures and work models. Remote working, or telecommuting, is more prevalent than ever due to the pandemic. Companies and businesses decided to continue operations remotely when people had to stay shut at home for an uncertain time.
Technological progress speeds up the process. Never before in the history of humankind was it possible to have more than 100 people together in an audio-video call with real-time data transfer. With work-from-home becoming the norm, things started changing in the workforce. Then began what we now call The Great Resignation.
Key Statistics:
- A Harvard Business Review study found that workers between 30 and 45 years old – mid-careerists – had the greatest increase in resignations between 2020 and 2021. While the highest turnover is typically among younger employees, the study found that resignations actually decreased for early careerists in the 20 to 25 age range. Resignation rates also fell for those in the 60 to 70 age group, late careerists.
- Moreover, workers are quitting their jobs in record numbers. Last month, over 4 million workers resigned – up 2% from the previous month. The US Labor Department says the increase in the number of workers quitting is the highest on record since 2000. Industries most impacted include healthcare, tech, retail, and hospitality.
- Almost 7% of employees in accommodations and food services quit their jobs in August, according to the Bureau of Labor Statistics (for context, that’s more than twice the record-high 2.9% quit rate across all occupations).
- To explore exactly who has been driving this recent shift, research was conducted by Visier named “the exit report” including more than 9 million employee records from more than 4,000 companies. As per the study, nearly 25 percent of workers had actually quit their job in the past year, with little concern about finding their next role given the new dynamics of the labor market. In August alone, 4.3 million people quit their jobs, mirroring record-high resignation rates that began topping 4 million back in April. Its latest report accounts for voluntary departures from over 50 U.S. enterprise companies and upwards of 500,000 employees across industries.
- A poll by Salary Finance queried over 2,700 adults working for medium- to large-sized companies (with over 500 employees) about their finances and found that even among those making over $100,000 annually, 32 percent “always” or “most of the time” ran out of cash before payday. Moreover, 38% of workers reportedly were in debt and ended up carrying that balance month to month. Even worse, 54% of respondents said they owe a medical debt, and those who have credit cards owe at least $3,000.
Reasons Behind The Great Resignation
When people started quitting jobs en masse, the phenomenon attracted global attention. As mentioned earlier, by April 2021, 19 million and counting workers had left their jobs.
It was a cause for concern for many reasons. While there were arguments of increased opportunities, we must remember that at the same time, more than 8.6% of the workforce was laid off. Unlike any time in history, people were now leaving jobs during a temporary recession.
There is no universal agreement about the reasons behind The Great Resignation yet, but some arguments make more sense than others. Here are some of the things that triggered The Great Resignation.
Covid-19 was also a mental health pandemic
Much of our human lives are spent in social situations. For example, most people had to work in places to interact with others, an actor or customer service executives.
With COVID-19 and subsequent lockdowns, things started to change dramatically. Schools and colleges began classes online, and suddenly people were spending half of their day in front of a screen.
This massive transformation had a severe impact on our mental health. For many years, mental health was taboo. People did not acknowledge its existence in many cases. But with the extremities of the pandemic, people started to break down.
For instance, 75% of workers now feel that stress in the workplace is at an unprecedented scale. When workers were forced to confront the realities of their work, it impacted the mental health of the working population.
There are two arguments on widespread depression and other mental health issues among millennials and young people. One argument is that social media and the subsequent virtual modes of interactions wreak havoc on our neurological abilities.
Another point of view is that the young population is now talking about mental illnesses without fear of judgment. Whichever is true, the fact remains that mental health illness sparked a desire to quit or change jobs in many young workers.
Remote working becomes a reality
Apart from a select few sectors, remote working was not the norm in workplaces. Even jobs that could be done remotely had to be done in an office. For example, customer service automation was possible, but companies wanted executives physically working on it in the office.
Commuting to the workplace is a significant driver of the economy, and many people earn their living from the workers commuting to work every day. With the shutdowns and quarantine mandates, things were at a standstill like never before. But human ingenuity found a way across it, and remote working became the norm.
The benefits of remote working are plenty and debatable. In the end, it boils down to personal preference. However, it does seem that more people enjoy working from home.
More than half of all remote workers say that they want to work from home after the pandemic. In addition, a considerable section of workers quit their existing jobs to find something they can do from home.
COVID aid and unemployment benefits
In the first world countries, the governments could ramp up unemployment benefits and covid aid funds to help people. However, many people in unorganized sectors had to work in terrible conditions with little to no safety during the pandemic. When Covid aids could make their lives easier, many decided to quit their jobs and wait for better prospects in the future.
The effects of The Great Resignation
The Great Resignation has changed work models forever, and telecommuting will continue to rise. With more innovative tools to interact with other people and maintain a cloud-based office, the number of companies switching to the remote model will also increase.
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