What Exactly Is “The Great Resignation?”
Author: Dr. Simone Phipps
Posted: Thursday, April 21, 2022 12:00 AM
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School of Business | Pressroom | Faculty/Staff
Macon, GA
You’ve probably heard the term “The Great Resignation” at some point over the past two years. But what does that term mean, what are the contributors to the phenomenon, and what are the impacts on our society? Dr. Simone Phipps, Middle Georgia State University associate professor of management and the institution’s most recent recipient of the Excellence in Scholarship award, offers her perspective on this phenomenon that is associated with the pandemic era but actually predates it.
What is the Great Resignation?
“The ‘Great Resignation’ is a term that describes the trend of the mass voluntary exit of employees from their employment obligations. The term was brilliantly coined by Anthony Klotz, a management professor. Many believe that this trend of workers voluntarily quitting their jobs began in early 2021 due to the Covid-19 pandemic, but in actuality, the pandemic may have simply exacerbated an already occurring, if not yet overwhelmingly pervasive problem. According to Fuller and Kerr (2022), the great resignation really started before the pandemic as employees were increasingly resigning at least ten years prior to Covid.
“However, the coronavirus epidemic, with its complications (e.g., disagreements over restrictions and mandates, health and death fears/scares, perceived disrespect of essential workers, school closures that warrant at home parents etc.), work opportunities (e.g., increased alternative work arrangements that allow flexibility), and personal opportunities (e.g., reflecting on and rethinking what’s really important in life), helped facilitate a perfect opening for employees to leave. Nevertheless, the ‘Great Resignation’ is the term generally used to describe the pandemic’s effect on the workplace, particularly relating to employee-decided resignations during the pandemic.”
What are some of the reasons behind the Great Resignation?
“There are a plethora of reasons behind the Great Resignation and workers’ priorities play a significant role in their decision to resign. Older employees may have used the pandemic as their opportunity to retire and as a result, protect their health and life, and spend more quality time with family and friends. Younger employees who are not as susceptible to Covid and its menacing outcomes if contracted may have heard and observed the daunting stories, images, and videos of sickness and death, and decided that they have one life to live and they want to live it to the fullest. Living life to the fullest usually does not include a job where one feels unappreciated (or underappreciated) and/or a job that inhibits their ability to do the things that really matter to them.
“Farrell (2021) mentioned the strong demand for workers means options, so some quitters are off to greener pastures. The latter often includes better pay, increased security, advancement opportunities and a host of other benefits. Other quitters are driven to find a more purposeful path, to pursue entrepreneurship, or to follow a job or career opportunity that requires less travelling for work so more time can be spent with family (Farrell, 2021). Parker and Horowitz (2022) explained that a Pew Research Center survey found that low pay, a lack of opportunities for advancement, and feeling disrespected at work were the top reasons why Americans quit their jobs in 2021. Other major reasons included child care issues, lack of flexibility to choose hours, and a lack of good benefits such as health insurance and paid time off (Parker & Horowitz, 2022). All of these reasons reflect employees’ desire to feel appreciated and to live their best life.”
Is the Great Resignation an American phenomenon or a global one?
“This is definitely not an American phenomenon. All over the world, the Great Resignation (or some version of it) has disrupted industries and markets, and impacted all stakeholders, including employers, employees, and the community. When workers quit, an organization risks a decrease in productivity and profitability as experienced talent is lost, an increase in costs to hire and train new talent, and at the extreme end of the spectrum, decreased chances of organizational survival. The employees that did not quit face an increased workload that can lead to increased stress, burnout, decreased job satisfaction, loss of commitment, withdrawal, and their own voluntary exit. The community, also, is affected as service in restaurants and retail establishments is often lacking, and supply chain disruptions and hold ups make goods and services scarce resulting in higher prices.
“Tharoor (2021) noted that in Europe, millions have exited the labor market in a number of industries including meatpacking and hospitality. Also, China has experienced younger workers leaving manufacturing jobs, and Vietnam has faced labor shortages as migrant workers who left for their rural homes did not return to the big cities when lockdowns were lifted (Tharoor, 2021). In India, the information technology industry has lost a stream of employees who have quit their jobs (Anand, 2022). South Africa, too, has seen an increase in employee turnover by 16% across all sectors (Fast Company, 2022). The Caribbean has not been spared. Some Jamaicans, for example, have been willing to venture into their own businesses rather than be employees (Loop News, 2021). These are just some examples of the many regions and countries that have been impacted. The Great resignation is certainly a global phenomenon that organizations worldwide must innovatively navigate.”
“People just don’t want to work” is a phrase we hear a lot. Is there any truth to that statement?
“Such a blanket statement oversimplifies a very complex issue. Yes, when stimulus checks were distributed, many workers quit their jobs, prompting some claims that people don’t want to work. However, as Fuller and Kerr (2022) explain, many of these workers may otherwise have quit had there been no pandemic. People want to work, but they also want to be valued and fulfilled. The pandemic caused disruptions that enabled, empowered, and enlightened employees. They wanted better for themselves and there were opportunities to pursue better for themselves. For example, some workers experienced telecommuting and realized that they could be just as productive or even more productive when working at home, and still benefit from being close to family members and spending more time with them. Thus, when their old jobs demanded that they return to the physical office work space, they decided to accept jobs that allowed remote work instead, or, at least, flexible hours. Work-life conflict has always been problematic because employees have always craved some semblance of work-life balance. The pandemic, however, has really driven many workers to actively seek and pursue it.”
What are some of the lessons we can draw from the Great Resignation?
“Without a doubt, there are lessons that can be drawn from the ‘Great Resignation.’ Both employers and employees need to possess an ethic of care, empathy, as well as reason so both sides can be mutually beneficial to each other.
“Employers must understand the real value and importance of their employees and reflect this understanding via fair policies, fair compensation, fair workloads, authentic recognition, and equal employment opportunity including opportunity for advancement. Employers must also understand that workplace dynamics are changing and employees need flexibility to achieve much needed and deserved work-life balance. Employees can indeed be productive and meet performance expectations using alternative work arrangements like flextime, telecommuting, and hybrid work models. Technological advancements have made flexibility possible, and it is crucial for increased employee satisfaction, involvement, engagement, commitment, and performance. Think, for example, about employees with children, especially women, because women have been disproportionately affected by the pandemic as childcare predominantly falls on them.
“Employees are not without responsibility. Of course, they should be reasonable with their expectations after considering their organization’s resources (or lack thereof). Of course, they should not take advantage of a noble organization that believes in and demonstrates fairness and justice, but is genuinely experiencing hardship(s) due to the pandemic. Of course, they should exhibit organizational citizenship behavior (OCB), where they voluntarily engage in positive actions that aren’t part of their job description. However, these actions are more likely to occur if the employers are perceived as fair, caring, and supportive, and the leaders are perceived as trustworthy, open to two-way communication and honest feedback, and sincerely interested in nurturing a positive organizational culture.”
What else?
“Organizations must urgently find solutions to favorably address the ‘Great Resignation.’ One recommendation, that reflects the aforementioned lessons employers can glean, is for organizations to strive to achieve what Prieto and Phipps (2019; 2020) call a cooperative advantage. We were inspired by African traditions of cooperation, and specifically by the philosophy of ‘Ubuntu,’ which can be translated to mean ‘I am because we are.’ Therefore, we conceptualized and defined cooperative advantage as the benefits an organization can possess and accrue due to its people-oriented approach to engendering spirituality (i.e., wellbeing), dialogue, and consensus-building for the benefit of stakeholders, including employees, customers, and the community.
“Organizational leaders must consider what employees need for their wellbeing, intentionally communicate with and listen to them when they voice their needs, and work together with employees to reach an agreement. For employees to stop quitting their jobs en masse, they must feel heard and valued. To end the “Great Resignation,” and prevent any future ‘Great Resignations,’ unbridled capitalism must become a thing of the past, and organizational leaders must focus on our shared humanity.”
Dr. Simone T. A. Phipps is, in addition to being an associate professor of management at MGA, is an associate research fellow at the University of Cambridge Judge Business School’s Centre for Social Innovation (UK). She is also a member of the Thinkers50 (aka ‘the Oscars’ of Management Thinking) Radar Class of 2021. Her research interests include management history, entrepreneurship, HR practices, leadership, social Issues and innovation, social sustainability, and relationships between the organization and society. Usually, her research involves the exploration of gender, racial, and ethnic minorities, with the aim of highlighting their struggles and contributions, as well as finding possible solutions to improve the minority experience in business and society.
References
Anand, S. (2022, February 3). India: Retaining talent amid the great resignation. The Society for Human Resource Management. https://www.shrm.org/resourcesandtools/hr-topics/global-hr/pages/india-great-resignation.aspx
Farrell, C. (2021, July 23). Older workers and ‘the big quit.’ Forbes. https://www.forbes.com/sites/nextavenue/2021/07/23/older-workers-and-the-big-quit/?sh=4b88b9933e47
Fast Company (2022, April 13). The state of the great resignation in South Africa. https://www.fastcompany.co.za/lifestyle/the-state-of-the-great-resignation-in-south-africa-32e41d9e-5940-42c4-a04c-018aa3494d38
Fuller, J., & Kerr, W. (2022, March 23). The great resignation didn’t start with the pandemic. Harvard Business Review. https://hbr.org/2022/03/the-great-resignation-didnt-start-with-the-pandemic
Loop News (2021, November 21). The great resignation trend has spread to Jamaica. Jamaica Loop News. https://jamaica.loopnews.com/content/great-resignation-trend-has-spread-jamaica
Parker, K. & Horowitz, J. M. (2022, March 9). Majority of workers who quit a job in 2021 cite low pay, no opportunities for advancement, feeling disrespected. Pew Research Center. https://www.pewresearch.org/fact-tank/2022/03/09/majority-of-workers-who-quit-a-job-in-2021-cite-low-pay-no-opportunities-for-advancement-feeling-disrespected/
Prieto, L. C., & Phipps, S. T. A. (2019). African American management history: Insights on gaining a cooperative advantage. Emerald Publishing Limited.
Prieto, L. C. & Phipps, S. T. A. (2020, September 15). Cooperative advantage: Rethinking the company’s purpose. MIT Sloan Management Review. https://sloanreview.mit.edu/article/cooperative-advantage-rethinking-the-companys-purpose/
Tharoor, I. (2021, October 18). The ‘great resignation’ goes global. The Washington Post. https://www.washingtonpost.com/world/2021/10/18/labor-great-resignation-global/