The Great Resignation: 3 Quick Thoughts

The Great Resignation has been building since at least April. People are voluntarily leaving their jobs in numbers not seen in a long time. The best thing is the number of companies that are hyping up the issue and using it to scare you into needing their services. I do not profess to have all the answers, but let’s delve in a bit and discuss what is probably happening. This is a quick article so I won’t bury the lead.

1. “Everyone” isn’t discontent with working from home. Firms that depend on you using their office space, relocation, in-person training, etc. would like you to believe that people are resigning in droves because they are sick of working from home. They say that stopping the resignations is dependent on you immediately using their services. Working from home isn’t ideal for some, mainly earlier career professionals. But it is certainly not the whole, or even the main, story.
2. “Everyone” isn’t quitting because returning to the office is become a reality. The purveyors of WFH solutions and consulting practices would like you to believe that asking people to return to work will make them quit. Demanding that people return to the office is probably a bad strategy, but making the office a welcoming place to have a better workspace, not be hounded by kids or pets, have access to IT help and faster internet (and friends and coffee) are things that will resonate with many people.
3. We Knew This Would Happen. The 800-pound elephant in the room is that the Great Resignation is not that impressive, and it isn’t a surprise to anyone who has been tracking resignation patterns in the past (basically economists, HR, and compensation professionals). During the last 18 months, resignations in most industries have been lower than in prior periods. People with safe jobs tend to stay during risky periods.

If the Great Resignation is mainly a multi-faceted marketing hype, what is a better way of looking at things? For all of 2020 and half of 2021, there were three kinds of workers.

1. The essential workers were working risky jobs on the frontlines and dealing with scared and/or angry customers and patients. Their jobs were fairly secure and their pay really didn’t increase the way a traditional “supply and demand” economy might have predicted. These people include nurses and doctors, grocery store workers and janitors, and tons of other jobs that our consumer economy needs to keep going. (These people really deserve a material raise.)
2. There were people who lost their jobs or could consistently make enough (and stay safer) being on enhanced unemployment. These people are quickly looking for new jobs as safety returns and unemployment benefits expire. Sadly, these people returning to the workforce will give many companies an excuse not to give their former essential workers their earned raises.
3. There were the people who had decent jobs. People with decent jobs resign all the time to get slightly more decent jobs. These people moved from expensive metro hubs. They worked from home, helped teach their children, and cared for kids or infirm relatives. They stopped driving in rush-hour commutes. They damaged their backs (and sofas) working in free space they could find. They updated their LinkedIn profiles, but they did not tend to resign.

The jobs market has been like a giant hairball clogging a drain. The reopening of society is like a big blast of Liquid Plumr clearing the clog. The so-called “Great Resignation” is just the kick-start to things going back to some version of a new normal. Resignations will slow down quickly, but our issues will remain.

Pay still needs to be adjusted to reflect the new reality of both the remote and hybrid workforce. Incentives need to be better designed, communicated, and managed to flex and evolve with unpredictable times. Essential workers finally need to get the respect they have earned in the form of better paychecks. And, mostly, we need to accept the fact that there is no time like the present to start fixing things.

Areas of the world will see lockdowns again in the Fall or Winter. How will your company pre-act? Some workers are never going to want to return to the office full-time. How will your policies and tools reflect this new reality? The Great Resignation is more like the Great Wake-up Call. How will you compete in the new days ahead?

Dan Walter is a CECP, CEP, and Fellow of Global Equity (FGE). He works as Managing Consultant for FutureSense. Dan is also a leading expert on incentive plans and equity compensation issues. He has written several industry resources including a resource dedicated to Performance-Based Equity Compensation. He has co-authored ”Everything You Do In Compensation is Communication”, “The Decision Makers Guide to Equity Compensation”, “Equity Alternatives” and other books. Connect with Dan on LinkedIn. Or follow him on Twitter at @DanFutureSense.