The Great Resignation - How was it Started and Who is Driving it? [Case Study]

Harshit Verma Harshit Verma
Jan 14, 2022 18 min read
The Great Resignation - How was it Started and Who is Driving it? [Case Study]

It was a march of 2020 when a virus spread over the world and changed the whole world. This instant change was not really instant but it was for sure very sudden. The pandemic forced everyone to get inside. Inside their houses. However the world was not totally halted, but it was forced to crawl with its knees.

Technology was the only refuge that we got apart from the ruins of the world. It helped us to be connected with others. It helped us with a load of education and the heaviness of the work. Technology literally took all the weight of every other field. Be it education or the work culture.

Two years into the pandemic and the world is changing drastically. Technology is still trying to meet both ends for the world and we have seen countless lockdowns. Out of all the side effects that the world saw due to the pandemic, there was this one unique ruckus that we all witnessed. This one thing was so uniquely attached with the pandemic and life, that we can’t explain. The affecting thing we witnessed was an ever-increasing resignation in the world.

Often abbreviated as “The great resignation”, this was so unique to the year 2020, and still counting that it amazed many. This article talks about the initiation of the “Great Resignation” and how it went viral all over the world. We will get to the skin of the matter and reveal some super important points in the journey. Hop on, to increase your knowledge about the greatest resignations ever.

What is 'The Great Resignation'?
The Beginning of The Great Resignation
Was India Affected by The Great Resignation?
What is Driving The Great Resignation?
How Employers Can Improve Employee Retention?
Advice for Companies Shifting to Remote Work
FAQ

What is 'The Great Resignation'?

When the covid 19 virus got out of Wuhan and travelled across the world, it did great ruins. One of the aftereffects of ruins is what we call the great resignation of the epidemic epiphany. The number of people who resigned from their respective jobs last year is tremendous. The trend didn’t just stop there at the beginning of the virus and in the mid of the year 2020. But it stretched to the whole next year, that was 2021. This magnitude of people leaving their jobs is not normal at all. That is the reason, the trend has captured many people’s attention.

Every consecutive month there were more and more tides for resignations and it shook the world. Months were more troublesome in the United States and in fact, that was the place from which the resignations started. Or was the place where it was noticed, to be precise. If we look at the numbers we will see that there were about 4 million people (Americans) who quit their jobs in the month of July only in 2021.

Number of People Quitting their Jobs in United States
Number of People Quitting their Jobs in the United States

The story does not end here, it is quite the beginning. In April 2021 the resignation peaked. After April of 2021, the word became a common slang among people. The shift of resignation was huge. The number of open jobs went up to almost 11 million in the months following April. This made employers think about ways to improve employee retention and find ways to make the number improve.

There was this one common factor of resignations all over the world and that was the age limits of resigners. The resignation rates were the highest among mid-level (or Mid Career) employees. These are the employees which fall in the age group of around 30 to 45 years. It is also reported that the average increase in the number of resignations in this age category has been a good 20%. This percentage of growth is seen from 2020 to 2021.

It is also seen that the turnover is the highest among the younger employees. In other later studies, it was found that the resignation number has decreased for the workers in the age group of twenty to twenty-five. This likely happened due to a higher level of financial uncertainty or dependency. Or it happened due to the reduced demand for some jobs that are placed on the entry-level of an organisation.

Another interesting factor that the world saw was that resignation rates were falling for employees that were in bigger age brackets. For people in the age bracket of 60 and 70, it was a normal time for them in their respective jobs. The tides were only high in the age group of 25 to 30 and the age of about 45. However, the most significant changes or resignations were seen in the age group of the 30s, people who are in their thirties or late twenties.

The Beginning of The Great Resignation

Until the beginning of 2021, the world was suffering in tackling the Wuhan virus. Every continent in the world was struggling to figure out a vaccine and then manufacture a vaccine. Efficacy was thought of again and again but soon we figured out how to make a vaccine and eventually get everyone vaccinated.

In April 2021, the covid 19 vaccination rates increased many folds. Well, that was not the only thing rising. The thing that began rising as the number of resignations. The first and by far the most noted waves were witnessed in the United States. That month, about 4 million Americans quit their jobs, reports say.

Then it was thought that the resignations would calm down. The hope was proved wrong and in the next month of June 2021, approximately about 3.9 million Americans quit their jobs. It was also noted by specialists that the situation was more prevalent in the southern part of the country. It alone accounts for about 2.9% of the volunteer resignations. It was followed by the midwest that accounted for 2.8 percent and then the west 2.6%. It was reported that the northeast was the most stable region with about 2% of the employees/workers quitting in the month of June.

Microsoft came up with their own set of data and reports. The “Work Trend Index” strives to be a data-dense information bucket for workforces around the world. According to Microsoft's Work Trend Index, in 2021, there were resignations that covered more than 40% of the global workforce. It is said that these mentioned people that are about 40% of the total workforce have some time or the other have thought of stepping down from their employment.

Another report said some more about the resignations in the year 2021. This time the report came from the Price water house coopers survey. They conducted a survey in early August 2021 and found out that about 65% of the employees said that they are looking for a new job. It also entails that about 88% of the executives said that their company is witnessing a higher turnover than the regular turnover.

In October 2021, the United States Bureau of Labour statistics also reported that workers leaving the premises were clocked at a rate of 6.8%. The industry they were talking about was the food service workers industry. The resignation rates were higher than the normal average amount of 4.1%. The average rate has not changed much since the past 20 years and the highest it went in those years was a top 5% and not more than that. The retail industry has also witnessed some abnormal quits. They saw a quitting rate of 4.7%.

A similar report from Fortune Magazine also showcased some rising and alarming numbers. That was the Deloitte study of October 2021. It said that the top thousand companies fear a great resignation. Out of the top 1000 fortune companies, about 73% of Chief executive officers think that these work shortages will disrupt their businesses in the next 12 months.

Out of those fortune companies, there was a solid percentage of 57% who think that attracting talent is going to be the biggest challenge in the future. 35% of the total CEOs believe that they have already expanded the benefits to bolster employee retention. Another report mentioned that beginning from the start of the epidemic to November 2021, approximately one in five healthcare workers quit their jobs.

Amidst all the chaos that was generated by the great resignation, the world was hit by one more uncertain event. Popularly known as the Striketober. It was the time when about at least a hundred thousand American workers started a strike.

Protest in U.S
Protest in the U.S

They all participated in the strike which was focused on the ill-treating working conditions and low wages. Reporting the matter, The Guardian wrote that some economists described the Great Resignation as workers participating in a general strike against poor working conditions and low wages.


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Was India Affected by The Great Resignation?

We just discussed that the event of the great resignation started off in the United States and it crashed up in the whole world. The next few countries with vast damages were China, Europe and India.

India is the second-most populous country in the world and any damage to the world can really magnify if entered inside the borders. India was in ruins too, due to the pandemic. The GDP was down, the work from home or anywhere was really hard to follow and manuals for remote work seemed blurred for most of the organisations in India. Having said that, let us see how the Great Resignation affected the Indians and the country of India.

Reports from the past year can shock any Human Resource manager. This was the effect that was initiated by the great resignation. It prompted people to not only shift careers but to jump to new careers where they had little or no past experience at all. This was probably the most unique and ubiquitous trait of the resignations.

A study commissioned by Amazon India showed the coinciding results. The report that was conducted in September 2021 showed that about 51 percent of the potential employees (Job seeking employees) were looking for opportunities in industries where they had no or little experience. And about 68% of the people were looking to switch industries.

When it came to resignations, there was also a shot of increasing demand for people with skills. As the world went virtual and online became the new normal for everyone, the technology sector saw a boom. This was the time when technology skills were demanded the most and industries of all sorts began their hunt for talent in the sector. It was the first nine months of 2021 when the demand saw the highest point in the graph. According to a report from Forbes India, the top five Information Technology companies hired as many as 1.7 lakh people in those peak times of technology. The rate is not that high now but it is in the green colour of growth.

According to the report by the YouGov Mint CPR Millennial Survey, it was found that 24 percent of the post-millennials (Generation after the millennials) reported a job loss compared in 2021 to 17 percent of the pre millennials. Those with some poorer education backgrounds faced a higher burn in the face.

Out of all the people who completed their school level of education, 30% were laid off. About 16% of those with professional degrees faced the same consequence. In late 2021, in the month of December, it was reported that only 8 percent of those in the job market still remained unemployed at the time of the survey. The survey covered responses of about 12,900 attendants across 206 cities. The survey was conducted by the Mint, Delhi based Centre for Policy Research (CPR) and the Indian arm of the global research firm known as YouGov.

As the difference between white collar and blue collar faded away in the pandemic, everyone came into the same room. Everyone was working through an electronic device. Be it working adults or be it, kindergarten kids. With that fading of the designated spaces for work, the difference between life and work faded too. This came with its own unique sets of problems and made a ruckus (Like your baby hanging out in between a zoom call). This was a big reason why people of young ages decided to resign and transition in their careers.

According to the reports from the surveys, the pandemic situation became near to normal, hopes for jobs also brightened. About 15% of the respondents believed that the economy had returned to the normal force. The data can be compared with only 9% of people believing in the economy in the last year. Thus, the reports of two consecutive years (2020-2021) show that as the resignations turn up, there was also seen new hopes for jobs and economic normal workings.

The topmost sector to be hit by the pandemic was undoubtedly the labour market of India. It was devastated with long and continuous lockdowns. The lockouts were crucial but they also affected the poor labourers severely. India’s labour market was devastated by the long and continuous lockdowns. Which were crucial but it also affected the poor labourers. Construction was affected and as a result, labourers were affected too.

After the first lockdown, as the situation worsened, it was getting better with the economy opening up in between. During that phase when people could see recovery signs, it was estimated that 60% of those who were forced to quit their jobs have found a way back into the organisation. It was also noted that urban Indians were trying to search for jobs in between the ruins of the pandemic. They are now also taking better control of their careers, the survey reported.

The effects were huge on the employers and the companies but the shift in resignations caused many surges. The rise in resignations came with a rise in the number of startups in India. It is a closely related metric that can be traced to get a clear picture. In 2021 alone, India saw around 33 Unicorns. Around the time of uncertainty and the pandemic, people who left jobs and others started up with their own ventures. They tried their luck and hard work in this unprecedented year. We saw the biggest surge in the Indian startup ecosystem last year.

What is Driving The Great Resignation?

The current trend of resignations has worried employers the most. They are not able to get things done and the effectiveness and efficiency of whole organisations keep ongoing. It is normal to minimise the damage by any means possible. This is why here we are discussing the reasons for the surging resignations. Later we will also point out some ways on how an employer can save the retention rates and minimise the resignations rate. It is not a hidden fact now that people are quitting for one of the biggest reasons. The reason can be hard to layout in one descriptive paragraph but let us try to get to the nerve of the issue.

As the pandemic started everything became hard to do. As the government frequented lockdowns, normal activities became hard to be done. Among the most affected areas of life, including education and the workspace. Everything became online and we all were staring at screens for most of our time. This was when the problem began. Earlier there was a designated place for education and corporate work, but now this was to be done within the same house boundaries. This created a ruckus.

Welcome to a more congested work and life balance. Work-life balance became super hard to manage and that was the most probable reason why resignations topped the charts everywhere. This was the time when people got attacked with responsibilities both from the home and the workplace. This was when they felt congested and crowded with responsibilities and it seemed impossible to work their way up the pile of work.

People became more and more concerned about their life and their family. As the lockdowns and the virus gave them more and more reason to live more fully rather than just postpone things for tomorrow. This made them realise that they are not able to handle both ‘life’ and ‘work’ at the same time. This also made possible the transitions and the resignations feel easy. People shifted to their local lands (or suburbs) to get back their lost lives.

It was also seen that the pandemic made people more aware of their life. It was as confronting as stirring the hell out of everyone. Rightly so, the stir caused by the Wuhan virus was so great that it made everyone rethink their life and careers again. It gave people a reality check about their lives. It showed them the fact that life is so fragile and anyone can die at any point in time. They also were more cautious and concerned about the time they spent with their family. If an employer does not respect that, resignation or walking out of the organisation was the second-best option for people last year.

The great resignation is really close to being called a “Worker’s Revolution”. The reason is the fact that workers or employees from all over the work world, made enormous shifts in work and life. Many studies found out that many of the transitioning employees reported bad working conditions for their careers. As the pandemic made everyone realise that life is more than ‘just work’, employees began realising their ill-treated jobs. They began questioning if they want this life of ill-treats or they want a life of more freedom. Most of the people chose freedom over their perilous jobs.

It is evident from all the resignations that money is not the only thing that employees may want from their workplace. It is more about flexibility in their work schedules that interests them. Work flexibility is considered as new money. It is the feature that allows employees to walk their pets any time they like or drop their kids at school at 8 A.M. That is the thing which attracts people more now. All of these ‘life’ things can be enabled only through a work from home model or a flexible hybrid model of work. Now people want employers who respect their time and work efforts.

Employees did not just shift from their jobs but they transitioned in their careers. Many chose an opposite stream of work with little or no experience. Many switched to freelancing as their way out of the rat race and accepted it as a full-time job. Many people moved back to suburbs (Rural areas) from cities to their families. Most of these decisions allowed people to spend more time with their parents or kids and families. It is easily evident that people now would choose ‘Life’ more than ‘work’ any day, in their work-life balance model.


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How Employers Can Improve Employee Retention?

The great resignation obviously ruffled the feathers of the employers and made them rethink employment and employee motivation. It was obvious that the old models had to be rethought. Here in this paragraph, we will provide some actual tips that helped employers to do their jobs.

First and foremost, employers have to identify that the threat is more of a qualitative sort. After realising the effect, focus on the cause which caused such an effect. After noticing the cause, you should set up a metric for ease. Then one should target specific targets to implement the new solution. It can be anything that fosters retention.

The most common goal can include targeting specific problems first and after targeting these specific problems you can see quick results. This feedback loop that you will create will help build more and more feedback loops, which eventually affect the retention of the whole organisation.

When you go out to search for the root causes, it is important to not fear any depth. Addressing the root cause is in fact the best statistics to solve problems that seem difficult to solve. The path to the root cause often starts with a “Why” in the head. There are also a few factors that can help to understand the question of why we are witnessing such numbers in resignations. Let us see what are the prompts that we saw last year.

The first reason that researchers have suggested is the trait of employability and experience and training. Before the pandemic, it was easier to hire people with less or no experience at all, and then provide them with training in an offline environment. This makes the new employees get a better understanding and equips them with knowledge of the work culture.

During the pandemic, the training became a luxury and an impossible task to take up. This forced companies and corporations to look for alternatives for that. They soon came to a point where it was hard to train people with knowledge. So they stood firm with hiring only experienced folks.

Since new experienced employees won’t need experience or will need little experience, the companies were sorted. This transcended the resignations and the unfilled vacancies. This would create greater demand for mid-career employees, thus giving them greater leverage in securing new positions. However, it is also possible and highly likely that medium-level employees may have postponed transitioning for their roles due to the uncertainty caused by the pandemic.

We all know the uncertainty that the pandemic caused and the effects afterwards. So, it is said that the rising number of resignations could also be a sort of stifled resignation. These resignations were postponed earlier in the pandemic and it was venting out just somewhere in the middle of the consecutive year of 2020 or 2021. It is also likely that these workers may have simply reached a turning or breaking point after months and months of high workings. It can include hiring freezes and other pressures causing them to rethink their work and life goals.

The second thing that the world noticed was the resignation rates in some specific industries. It was noted that the technology and healthcare industries saw the biggest jump in the number of resignations. Both these industries and other industries saw turnover rates that were different in different types.

In the manufacturing and finance sectors, resignations actually decreased slightly. In the health sector, the number of people who resigned was 3.6% more than the previous year. In the technology industry, there was an increase of 4.5% from the previous year of the pandemic.

In general, we got to know that the resignation rates were higher among employees who worked in fields that required some experience and more skillsets than others. It is generally assumed that they left their workplaces due to extreme demands and increased workloads that they faced. Thus, burnout was a huge reason for such great resignations.

There are more questions that people can ask themselves. Here we are talking about employers here. This new dynamic is a sure challenge for all the employees as well as for the employers. Beginning with it, if you are an employer ask yourself-

  • Did the productivity of the employee fall during the quarantine?
  • Do you need employees that work all the time in the office? The nine to five culture?
  • Are you willing and Can you afford your employees work from all or any part of the world? This question addresses the flexibility of work offered.

Employers also have seen one more thing work for the employees. That method is to develop tailored approaches. Personalised approaches can be provided to each and every employee or team can work in that fashion too. It is just a fact about effectiveness.

If you have a marketing department that can work at the same efficiency as before in a remote fashion, then make it remote. Accordingly, identify those departments and teams and areas of your organisation that can work independently or remotely. This way you can better handle the efficiency of the whole organisation by categorising teams as remote, workspace and hybrid setups.

The lockdown also has caused much of an attack on the mental health of the employees. An employer should note this down very seriously. Employees were stuck at home and working for the organisation did loads to get things done in time. They had to adapt to their surroundings and they did that. If there was one thing that the pandemic organised to the whole world, it was a sense of missing out. We all suffered from FOMO at some point or the other. Theatres went online, work happened over zoom calls. Employees balance work and life together and simultaneously. Now, They need a smooth shift back to offices with the least resistance and also a pat in the back.

Advice for Companies Shifting to Remote Work

​​GitLab follows a DRI approach to WFH decisions and it is very uniquely identified by the company. DRI stands for Directly responsible individuals. This means, At the software company, everyone can make a suggestion to the point of discussion, but the person who is actually making the decision can choose whatever he/she wants without having to explain themselves. This ensures that responsibility and decisions are not vanishing at any point in time and it is all over the workspace. Otherwise, there would be just too much work and the responsibility and accountability will be separated. ‌‌

Despite its many and probably advantages only, all-remote work isn't made for everyone. It can have disadvantages for potential employees depending on their lifestyle and work preferences, as well as the organisation. If the arena is different, the rules should bend too.

After all, it is a new dynamic work view. So replication of office experience will lead to turmoil. It is vital to reorganise and recalibrate at this point. It is also important to note that the shift to remote will not happen automatically and rapidly. It is a slow process, where everything needs to be checked twice before relying totally upon it.

Conclusion

The world has seen enough of the pandemic and its side effects. The pandemic was devastating for every one of us and it totally and permanently changed our lives. As our lives get affected, work gets affected. Pandemic has mixed the two aspects of a person’s life, the work aspect and the life aspect.

With this mixing, many people are getting a reality check about their lives and how they should be lived. People are reconsidering their life decisions and eventually choosing options that allow them to spend time with their family and with themselves. Hence, the resignations and the transitions in the work world.

After the great resignation, not only the employees but every workspace is reconsidering their work schedules. It is amazing to witness that change happen on a large scale. This is true for people and this is true for organisations as well.

Modern skilled employees now demand fewer work weeks and more flexible working conditions. This is not something that we can call ‘unfair’. It is just that the pandemic accelerated hope in all directions. We have arrived at a point in which everyone has to respect other people’s time and energy. This is how we measure life fundamentally.

FAQ

Who coined the phrase the Great Resignation?

Professor Anthony Klotz coined the term "Great Resignation".

How many people quit their jobs in 2021?

Over 38 million people have quit their jobs in 2021.

Why are so many people leaving their jobs?

Lack of Work-life balance and remote working are some of the major reasons people are leaving their jobs.

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