M. Ray Perryman
The Economist: The Not-So-Great Resignation
Among the most widely discussed economic phenomena in our post-pandemic world is the so-called “Great Resignation,” a phrase used to describe what seems on the surface to be unusually high numbers of people leaving their jobs after the arrival of COVID-19.
It goes without saying that the toll the pandemic has taken on the health and well-being of our country’s workforce has been profound, and there is no doubt it has been a contributor to the behavioral changes. Individuals who are experiencing burnout or stress are more likely to quit a job and look for one that is a better fit for their personal needs and lifestyle, and there have certainly been instances of people deciding to retire early, start a business, or otherwise leave the traditional workforce.
Even so, most individuals who quit do so to change jobs, and economists typically see this as a positive sign because it means workers are finding better positions. In 2021, a record 47.8 million Americans voluntarily quit their jobs (excluding people who retired or transferred to a different location or role within a company).
However, despite all of the churning, the workforce is only down about 600,000 from pre-pandemic levels (less than 0.5% of the total workforce), and that number is shrinking. What we are really seeing is more of a “Great Reshuffling” as the effects of the pandemic understandably cause many to reassess how and where they want to work, but relatively few are putting themselves out to pasture.
How we work has been evolving for years. Some practices, such as remote work, had become increasingly common prior to 2020, and COVID-19 greatly increased the proportion of jobs that have some work-from-home component. This element has given workers more negotiating power; when an onsite office presence is not a requirement, people can more easily and quickly leave one job and find another. This opportunity is especially true among white collar employees in the information, finance and insurance, and professional and business services sectors, where hybrid work is more prevalent.
Ultimately, the shifts that began with long-term population dynamics and were intensified by the pandemic look to have staying power, and that fact will present challenges to businesses of all sizes.
The Great Resignation wasn’t so great, and it really just sped up shifts already in place. Throngs of people changed jobs; comparatively few quit permanently. Going forward, we will likely see even some of those who left prematurely trickle back to the workplace, but the underlying long-term trend toward fewer available workers is driven by inescapable demographic patterns which were well established before the pandemic came along. It will be with us for quite a while. Stay safe!
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of over 2,500 clients over the past four decades.