Is the Great Resignation just a rumer?

It’s been in the news cycle since August, as the end of the CJRS (aka Furlough scheme) in September became visible on the horizon. Mass redundancies were predicted (although nothing like this “gem” was anticipated) as businesses still struggled to recover from lockdowns, and “work-life balance” became a requirement rather than management jargon. We’ve been told to expect the “Great Resignation”.

What is the Great Resignation?

Also known as the Big Quit, the Great Resignation is an informal name for the widespread trend of a significant number of workers leaving their jobs during the COVID-19 pandemic.

“The Great Resignation is typically discussed in relation to the US workforce but the phenomenon is international. It is thought to be the result of many different factors, notably workers’ dissatisfaction with current working conditions and personal reassessments of career and lifestyle due to the changes and hardships of the pandemic.”

Now, generally speaking, the Great Resignation isn’t presented as a predominantly American issue, although the States have a notoriously poor record when it comes to taking care of employees (little to no paid parental leave or vacation time, zero-hour contracts, no employee protections in case of redundancies etc). So, it’s not surprising that the “GR” is widespread in the USA. But what about the UK?

A perfect storm in our teacup?

This past summer has seen a shortage of hospitality workers (a knock-on effect of multiple lockdowns) and HGV/delivery drivers. In July, The Road Haulage Association (RHA) estimated there was a nationwide shortage of around 100,000 HGV drivers, caused by an exodus of European drivers after Brexit and as the ‘pingdemic’ forces many of the UK’s remaining drivers to isolate themselves at home.

In the UK, job vacancies soared to an all-time high in July, with available posts surpassing one million for the first time. In May, jobs site had its highest number of monthly postings since 2008.

Intense growth, coupled with the flexibility of remote work, means “white-collar” workers have more choice where they ply their trade than ever before. John Goulding, CEO and founder of employee communication platform Workvivo, stated: “someone can finish at a company on a Friday evening, have a new laptop delivered, and start a new job on Monday morning without leaving home.”

Given this new ease of job-hopping, the decline in unemployment and the increase in vacancies for highly skilled workers, where does the Great Resignation fit in?

The predicted redundancies don’t appear to have happened…

Redundancy intentions by sector, summer quarters 2020 and 2021

According to the CIPD, planned redundancies in 2021 dropped significantly compared to the summer of 2020. The focus shifted from replacing talent to nurturing it: flexible working has become mainstream, and other “soft” benefits have been introduced in an attempt to retain existing employees. As we can see in the diagram below, employers’ number 1 solution to a skills shortage is to upskill their existing team, followed by raising wages and improving job quality.

So, the expected redundancies are redundant (ba-dum tssh), yet the number of job vacancies has increased rather than slowed down, and the number of employers struggling to fill skilled roles has more than doubled in the past two years; it has increased from 35% in 2019 to 77% in 2021. Where is the skills shortage coming from?

Out with the old…

Undoubtedly, the UK’s exit from the EU has had an effect on hiring and retaining skilled workers from the continent, but it’s not solely to blame. Research conducted for Resolution Foundation and the Centre for Economic Performance at the London School of Economics (LSE), found that the number of 55- to 64-year-olds either in employment or seeking employment had dipped by 1.2 percentage points (from 68.5 to 67.4) between mid-2019 to summer 2021.

Historically, workers aged 50 and over have found moving jobs especially problematic, with the Centre for Ageing Better finding that more than a third (36 per cent) of 50 to 70-year-olds said they felt at a disadvantage in applying for jobs because of their age.

Kate Shoesmith, deputy CEO at the REC, has stated that now more than ever, diversity of age is critical to creating an effective workforce, helping both older and younger workers, companies and the UK economy to bounce back from the pandemic and build a stronger future.

So, the Great Resignation hasn’t really hit us over here in the UK, but we do have a skills shortage. We can tackle this by nurturing our existing workforce, upskilling where possible, and embracing diversity within this workforce.

No Comments

Post A Comment