What does The Great Resignation mean for Australians? What is it? It’s the phrase on everyone’s lips at the moment and perhaps with good reason. The looming threat of disruption due to people resigning in droves, or undoubtedly thinking about resigning, means that employers need to take action. While we try to predict what 2022 and beyond holds in the post covid corporate environment, one thing is for sure - businesses that act to genuinely address why their people may be looking to leave, and in turn do more to attract, engage, and retain talent will undoubtedly be better off. The term was coined in late 2020 by Texas A&M University’s psychologist and professor Anthony Klotz in response to two developments he said had collided like a perfect storm: growing quit rates and the burnout and rethinking of work-life balance that followed COVID. Whilst ‘The Great Resignation’ has been largely evidenced in the US, elsewhere globally has also experienced employees calling it quits at alarming rates. In Australia, the trend seems to have been delayed because of our ongoing and extended lockdowns but data from the people management platform Employment Hero does suggest that 48% of Australian workers are planning to look for a new job in the next 12 months and our recent salary survey data certainly backs this up. Moreover, even those who are quite satisfied in their current roles will potentially be faced with the prospect of an increase of new opportunities to explore as movement rises. In April last year as COVID lockdowns took hold and businesses shut down operations, an estimated 780,000 Australians lost their jobs, with around 90 per cent of those lost in the first week of April 2020. An erratic 18 months later, as the country opens again, businesses ranging from hospitality to corporates of all sizes across all industries are struggling to fill those same roles, with many workers turning their noses up at job offers, opting instead to pursue new work-life balance aspirations. Whilst everyone won’t be living the life of luxury on white sandy beaches, there is undeniable talent shortages for many roles. Resignation rates are highest among mid-career employees. Employees between 30 and 45 years old have had the greatest increase in resignation rates, with an average increase of more than 20% between 2020 and 2021. While turnover is typically highest among younger employees, studies have found that over the last year, resignations actually decreased for workers in the 20 to 25 age range; this is likely due to a combination of their greater financial uncertainty and reduced demand for entry-level workers. There are a few factors that can help to explain why the increase in resignations has been largely driven by these mid-level employees. First, it’s possible that the shift to remote work has led employers to feel that hiring people with little experience would be riskier than usual, since new employees won’t have the benefit of in-person training and guidance. This would create greater demand for mid-career employees, thus giving them greater leverage in securing new positions. It’s also possible that many of these mid-level employees have delayed transitioning out of their roles due to the uncertainty caused by the pandemic, meaning that the boost we’ve seen over the last several months could be the result of more than a year’s worth of pent-up resignations. And of course, many of these mid-career workers may have simply reached a breaking point after months and months of high workloads, hiring freezes, and other pressures such as home schooling or caring for elderly relatives, causing them to rethink their work and life goals. Fact or fiction? Australian resignation rates are falling Data collected each year by the Australian Bureau of Statistics suggests that in the 12 months to February 2021 almost 1.1 million Australians left their jobs. That’s not unusual - in most years more than a million Aussies leave their jobs. Leaving and changing jobs is a sign of a healthy, well-functioning labour market. In the year to February 2021 the proportion of Australian workers switching jobs fell to an all-time low : 7.6% of employed Australians changed jobs that year, significantly down from the peak of 19.5% last seen in 1988-89. Of course, it is possible Australia’s labour market will change direction and follow that of the US labour market but there are caveats around what the US is coming out of compared with Australia’s current economic standing. Speculation aside, if The Great Resignation is as likely and widespread as experts are predicting then employers need to buckle up for the ride and start working on some serious engagement and retention strategies, not to mention look at existing recruitment processes to ensure they are as attractive as can be. Even if resignation rates don’t escalate as excessively in Australia as they have elsewhere, the pursuit for talent will still be high. The shift of power. What do comp...
The Great Resignation?
What does The Great Resignation mean for Australians? What is it? It’s the phrase on everyone’s lips at the moment and perhaps with good reason. The looming threat of disruption due to people resignin...