The Great Resignation: An Australian Context and Advice for Employers
Throughout history, economists and scientists have shown extraordinary fondness for one hyperbolic adjective - ‘The Great War’, ‘The Great Depression’, ‘The Great Moderation’, ‘The Great Recession’. More recently, ‘The Great Resignation’ has caught the eye of headline writers. But is it really as ‘great’ as some journalists want you to believe?
Certainly, in the US and, to a slightly lesser extent, the UK, the Great Resignation thesis is most pertinent. ‘Job quits’ - the number of people quitting their job per month - are very high in both countries, as is wage growth, while job creation is relatively low. This suggests that employers are being pushed to respond to the threat of staff turnover and struggling to find workers. However, this supposed resignation crisis becomes ‘not-so-great' beyond an Anglo-American context. In Canada and New Zealand, there is no suggestion of such phenomena, figures are inconsistent across the EU, and measures of resignation are at an all-time low in Japan.
In Australia, although nowhere to the extent of that in the US and UK, there is some evidence of increased resignation. This includes low unemployment and record numbers of people swapping jobs. According to LinkedIn metrics, job competition was down 63% at the end of 2021, compared to the previous year. Let us explore the forces behind this shift.
New year, new me, new priorities
In the midst of the COVID-19 pandemic, there were high degrees of uncertainty. Employees helplessly watched as those in hospitality, retail, and arts and entertainment sectors became jobless. Those who were able to work from home clung onto their positions, grateful for any security and stability.
However, much has changed since. We welcomed vaccines and farewelled lockdowns, just in time for the holiday break. These past couple of months have given employees the opportunity to unwind and reflect. After enduring the challenges of the pandemic, many have readjusted their priorities - in the workplace, ‘intent to stay’ and discretionary effort are at record lows. People are re-evaluating their career paths for 2022 and beyond, and this naturally foreshadows extensive movements in the labour market.
Labour shortages
Lack of migration has prompted labour shortages across sectors. One response from employers has been to increase wages, creating even greater incentive for workers to quit their current job for a higher-paying one.
In the white-collar workforce especially, skills shortages due to international travel bans means employees have increased individual bargaining power. Having confidence in their job security and the option to work from home, workers are more likely to demand better working conditions, flexibility, and work-life balance. If dissatisfied, they may simply resign and work elsewhere.
Similarly, in sectors like hospitality, where employees are paid barely above the award, border closures and high vacancies mean that existing workers are often choosing to leave their jobs in search of a more secure one.
Relocation out of cities
Many employees have found working from home extremely attractive. They have enjoyed greater productivity and work-life balance, not to mention replacing the time spent for long work commutes with time spent with family, friends, or to pursue other hobbies.
Last year, two of Australia’s leading tech companies, Canva and Atlassian, both famously instituted workplace policies that require employees come into the office fewer than eight times a year. Atlassian also announced a ‘work from anywhere’ policy which allows employees log on from anywhere in the country.
Flexible work is becoming a key method of attracting talent, and its increasing popularity means that people will no longer have to live in major cities. With the option of remote work, coastal or countryside lifestyles, and their lower costs of living, are now feasible. CoreLogic’s January report revealed that regional areas continued to outperform the average capital city home, with prices up 1.8% last month and 6.3% over the past three - more than twice the quarterly price increase of the big cities.
What can employers do?
Organisation must acknowledge that the pandemic has dramatically changed people’s perceptions around work. Simply reverting to pre-pandemic norms will only risk high-attrition rates amongst staff. Employers should consider the following:
Flexible working arrangements, if possible. Work-life benefits will be expected by employees, rather than being seen as an added extra.
Clear and structured channels of communication for feedback and support.
Learning and development opportunities prioritised. This includes providing development, meaningful work, and career opportunities.
Understanding how employees work. Do they prefer explicit direction or a more hands-off approach? Striking a balance between autonomy and structure for each individual can ensure high motivation and performance levels.
Elements of ‘The Great Resignation’ are evidently present in our workforce, although not so severe a ‘crisis’. Generally speaking, Australia has better working conditions and places greater value on work-life balance, compared to the US. Nonetheless, the 2022 work landscape is expected to undergo major shifts as we begin to move away from the pandemic. Employee retention will be a challenge for employers, but it all comes down to one thing – listening to workers and acting on their concerns.
How we can help
Certex offers various resources for employers regarding mental health, working from home, legal obligations, and more. Please explore the links below or contact us for more information.