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The Great Resignation Report

July 29, 2022
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About the Authors

Joyce Jiang is an intern at Cultural Infusion from Hong Kong. Having a background in Political Theory and Counselling, she has worked in both the social service and marketing industry prior to her internship at Cultural Infusion. She enjoys working with people from different backgrounds and aspires to create an inclusive and harmonious world. She is also a coffee lover and has a strong passion for learning more of this world. 

Sam Lin is an intern from Hong Kong studying economics and sociology. He is passionate about working in non-governmental organisations to make a positive change for the world.

Boris Chung is an intern from the University of Hong Kong, majoring in Politics and Public Administration while interested in Sociology and Culture. He believes that society should be more equal and that discrimination in many aspects should be gone.

Current situation 

The Great Resignation (also known as The Big Quit and The Great Reshuffle) is an ongoing economic trend since early 2021, in which employees voluntarily resign en masse from their jobs. Some economists have described the Great Resignation as akin to a general strike. According to the Harvard Business Review, the cohort between 30 and 45 years old had the greatest increase in resignation rates (Ferrazzi & Clementi, 2022).

The Great Resignation has been seen all around the world. In Australia, 1.3 million people, which account for 9.5% of employed people, changed jobs, resulting in the highest annual job mobility rate since 2012 (Australian Bureau of Statistics, 2022). The recent rise in job mobility was more pronounced for women, rising from 7.6 per cent to 10.0 per cent, than men, rising from 7.5 per cent to 9.1 per cent. The share of job mobility is highest for professionals, such as engineers, architects and pharmacists; 22% of professionals changed jobs. On the other hand, the annual retrenchment rate, which represents the rate employers terminate employees due to the surplus of labour, was 1.5%, the lowest annual rate on record since 1972 (Australian Bureau of Statistics, 2022). 

In the United States, a similar situation has occurred. The US Bureau of Labour Statistics reported that 4.5 million Americans quit their jobs in March 2022. Among all industries, the manufacturing industry has taken the largest hit in terms of workers quitting from pre-pandemic to late 2021 rates, jumping nearly 60% (Long, 2022). In Asia, the Great Resignation has also been observed: In Singapore, Mercer conducted a standalone Hiring and Retention Survey for over 150 companies across 13 industries.  Of the respondents surveyed, 69% reported an increase in staff turnover in the first half of 2021 from the same period last year. 

COVID-19: A period for reflection 

The emergence of the Great Resignation at the time of COVID-19 was not merely a coincidence. Many consider the space of reflection COVID-19 brought employees to rethink their career or deeply question the role of work in their life  to be the catalyst. 

Firstly, the pandemic has provided a space for employees to rethink the psychological contract with their employers. A psychological contract is the deal someone makes with their employer about what they get in exchange for their labour, time and effort (Jiskrova, 2022). While this contract used to be about material benefits such as a good salary, job title or how many benefits companies can offer, it has now shifted to whether or not companies are able to enrich their employees’ lives. People are increasingly concerned with whether the job is a field they really enjoy working in, the meaning of the job and the job satisfaction they can get from work experiences. During the pandemic, a lot of people experienced losses and this has made them rethink profound life questions, such as the purpose in life and their meaning behind their job. 

In addition to the meaning of work, more employees started prioritising flexibility in their evaluation of a good job. After a period of being able to work remotely during the pandemic, a lot of employees have experienced the benefits that working flexibly from home can bring, including having the time to take care of children and the better work–life balance. This continues to top the priority list today (Jiskrova, 2022). 

Individualisation in late modernity: the driving factor of employees’ changing mindset 

The spark of reflection during COVID-19 is important only if we consider the changing mindsets of employees in sociological and historical terms: How does the space of reflection relate to the employer–employee relationship?

Most sociologists would agree that we have moved to the era of late modernity, characterised by growing complexity in economic, cultural, and political fields, and increasing reflexivity (Giddens, 1991). The drastic increase of leisure time, real disposable incomes and the social security system of the welfare state has raised individuals’ social mobility. Individuals’ actions and decisions as such are less and less determined by external social constructs such as communities, nations and class structures (Beck, 1992). Following the introduction of democratised and interactive information models since the information revolution in the 1980s, the ever-changing economic and political landscape – driven by information overflow, where the enormous volume of information is beyond individuals’ comprehensibility – adds the dimension of insecurity and risk to the table (Bauman, 2000). These social structural changes have led to the process of individualisation where individual decisions are made alone – rather than collectively with social communities – as the primary point of reference (Rasborg, 2017). As sociologists Ulrich Beck and Elisabeth Beck-Gernsheim had put it, individuals increasingly inclined ‘. . . to lead a life of their own – is now being demanded of more and more people and, in the limiting case, of all.’(2002).

The increasing individualisation promises freedoms where one can make decisions outside external social constructs, and tandemly an all-encompassing, democratising social dynamic. Given that the relevance of class stratification as an external construct is downplayed by individualisation, it is no surprise that individuals are now less likely to submit themselves to a class-related, economic bureaucracy in late modernity. This is particularly relevant to the Great Resignation when we consider the leading factors of the Great Resignation identified by the predictive model of Donald Sull, Charles Sull, and Ben Zweig (2022), all of which are directly related to employees’ personal wellbeing.

Leading factors of the Great Resignation: toxic work environment 

Donald Sull, Charles Sull, and Ben Zweig (2022) identified that undesirable corporate culture is the leading element of resignation, so powerful in fact that its impact on a company’s attrition rate is 10.4 times more significant than that of compensation. Examples of toxic corporate practices include inability to promote diversity, equity, and inclusion; disrespectfulness towards workers; and unethical behaviour (Sull et al, 2022). When the corporate culture is undesirable, employees tend to look for jobs elsewhere. 

In addition, when the performances of employees are not recognised within the company – both informally and financially – research has suggested that they are more likely to leave the company (Sull et al, 2022). Employees with high performance are most likely to resent a lack of recognition for their endeavours, resulting in companies losing their most productive workers during the Great Resignation. 

Burnout and high intensity workload in fast-paced corporations is another driving factor of resignation. The Predictive Index showed 36% of respondents think their managers are burned out, 40% consider themselves worn out, and 45% believe other team members are burned out too (Olvera, 2021). Among all industries, the attrition rates of innovation companies, such as Nvidia, Tesla and SpaceX, are three standard deviations higher than those in their respective industries (Sull et al, 2022). This is likely because innovative companies typically require employees to put in longer hours, work at a faster pace and endure more stress. Along with the innovation industry, health and education professionals also reported a high burnout rate. Nurses report there was insufficient staffing and a desire for emotional stability during the pandemic  (Fry, 2022). Educators claimed that stress, increased levels of burnout, and the shortage of assistants increased the workload and hindered their research (Poindexter, 2022). 

These factors’ direct correlation to one’s personal wellbeing – rather than to economic and structural factors – has provided insights of employees’ changing mindsets and how individualisation is motivating the Great Resignation.

The future of the workforce: how should we view the Great Resignation?

It is thus no surprise that the reflection on work–life balance during COVID-19 kickstarted the Great Resignation. The decision to resign after finding jobs unfulfilling and stressful is clearly in line with how personal benefits and expectations have been prioritised over external constructs under individualisation. The emphasis of a healthy work–life balance is the testament of how structural economical controls are making ways for individuals’ personal wellbeing. 

Individualisation is a macro-social structure deeply rooted in our society, regardless of the pandemic or the Great Resignation. It is thus arbitrary to assume the wrestling between employers and employees will be over once and for all once the Great Resignation and the pandemic are under control. Instead we should see it as a reminder of the employment model’s revolutionary changes in the future. Therefore, real changes have to be made to abandon the untimely traditions of strict bureaucratic practice. 

Suggestions

To improve the retention rate under the Great Resignation, the first step is to escape from the arbitrary conclusion of insufficient compensation and acknowledge the significance of a toxic working environment. Work as a meaningful and personally rewarding activity is essential for a healthy employer–employee relationship under individualisation. (Hancock & Tyler, 2001)

While the determinant of corporate culture varies between industries and companies, the model of CultureX by Donald Sull and Charles Sull (2021) has been very helpful in identifying some of the most important factors of a healthy work environment. Accordingly, a respectful environment is the single best predictor of a company’s culture score. Its significance is not to be underestimated in predicting a company’s overall culture rating: its significance is nearly 18 times as important as the typical feature in the model, and almost twice as important as the second most predictive factor. 

From the employees sampled in the model, the leading source of disrespectfulness can be summarised as ‘being demeaned and degraded, viewed as nothing but disposable cogs in a wheel or robots’. Short-term actions with employees’ personal wellbeing in mind can undoubtedly boost retention rates in light of this. Actions in line with this include 1) more predictable, mutually agreed schedules for front-line employees (contrarily to cancelling/increasing employees’ shifts at the last minute), 2) offering remote work options to help employees achieve the right work/life balance they are comfortable with, and 3) provide opportunities for lateral job moves to fight against monotonous, unchallenging, and tandemly unsatisfactory work.

Yet a respectful environment can only be sustainable with long-term corporate cultural changes. Failure to promote diversity, equity and inclusion remains one of the largest elements and source of disrespectfulness. Employers should thus consider long-term actions such as company-organised social events (happy hours, team-building excursions etc.) and intercultural training programmes to reinforce an interpersonal, respectful relationship within teams.

Conclusion

In this report, we have outlined how employees’ mindsets and expectations of jobs have shifted over the course of individualisation in late modernity. The pandemic as a space for self-reflection of personal wellbeing is an amplifier to the underlying organisational loopholes of the preceding strict bureaucratic practice. Given that the individualised social structure is unlikely to diminish in the foreseeable future, we conclude that change to the existing problematic work culture is much needed to remain a healthy employer–employee relationship.

References 

Bauman, Zygmunt. (2000). Liquid modernity. Polity Press. 

Beck, U. (1992). Risk society: Towards a new modernity. SAGE Publications . 

Beck-Gernsheim, E., &; Beck, U. (2002). Losing the traditional: Individualization and ‘precarious freedoms.’ Individualization: Institutionalized Individualism and Its Social and Political Consequences, 1–21. https://doi.org/10.4135/9781446218693.n1

Ferrazzi , K., & Clementi, M. (2022, June 22). The great resignation stems from a great exploration. Harvard Business Review. Retrieved July 20, 2022, from https://hbr.org/2022/06/the-great-resignation-stems-from-a-great-exploration

Fry, E. T. A. (2022). Resigned to the “great resignation?” Journal of the American College of Cardiology, 79(24), 2463–2466. https://doi.org/10.1016/j.jacc.2022.05.004

Giddens, A. (1991). The consequences of modernity. Polity Press.

Hancock, P., &; Tyler, M. (2001). Work, postmodernism and organization: A critical introduction. https://doi.org/10.4135/9781446218365

Job mobility, February 2022. Australian Bureau of Statistics. (n.d.). Retrieved July 20, 2022, from https://www.abs.gov.au/statistics/labour/jobs/job-mobility/latest-release#:~:text=During%20the%20year%20ending%20February,left%20or%20lost%20a%20job.

Ksinan Jiskrova, G. (2022). Impact of covid-19 pandemic on the workforce: From psychological distress to the great resignation. Journal of Epidemiology and Community Health, 76(6), 525–526. https://doi.org/10.1136/jech-2022-218826

Long, H. (2022). Why manufacturing workers are voluntarily leaving jobs at rates never seen before. The Washington Post. Retrieved from https://www.washingtonpost.com/opinions/2022/01/09/why-manufacturing-has-seen-biggest-spike-workers-quitting/. 

Olvera , M. (2021). People Management Report 2021. https://doi.org/https://humanostics.com/wp-content/uploads/2021/08/2021-People-Management-Report.pdf 

Poindexter, K. (2022). The great resignation in health care and academia: Rebuilding the postpandemic nursing workforce. Nursing Education Perspectives, 43(4), 207–208. https://doi.org/10.1097/01.nep.0000000000001003 

Rasborg, K. (2017). From class society to the Individualized Society? A critical reassessment of individualization and class. Irish Journal of Sociology, 25(3), 229–249. https://doi.org/10.1177/0791603517706668

Sull, D., & Sull, C. (2021). 10 Things Your Corporate Culture Needs to Get Right. MIT Sloan Management Review, 63, 1–7. https://doi.org/https://www.proquest.com/docview/2587950989?accountid=14548&parentSessionId=790F1pTPVjhdJxr%2BD8wTLJto9CpA65OawzHriJJvzvc%3D&pq-origsite=primo

Sull, D., Sull, C., & Zweig, B. (2022). Toxic Culture Is Driving the Great Resignation. Massachusetts Institute of Technology, 22, 1–9. https://doi.org/https://www.proquest.com/docview/2633007986?accountid=14548&parentSessionId=IUC06w6LU36qZCkMILt00nxcO3WVtd5ZjgLgMXKNz5g%3D&pq-origsite=primo 

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