What is The Great Resignation?

By Brooke Ash

The term “Great Resignation” refers to the significant number of employees expected to leave their current roles during or towards the end of the pandemic. [1] While the term often has negative connotations around it, this phenomenon is not always a bad thing. It is a bottom-up signal that various industries needs to undergo a massive update in their employment conditions. [2]

What is happening in the USA?

The United States is experiencing the Great Resignation with more intensity than Canada. At the beginning of 2020, only 3.5 million workers quit their jobs. [3] However, over 4.53 million workers left their jobs in March 2022 alone, beating the previous series high of 4.51 million in November 2021. [4]

What are we seeing in Canada?

As of April 2022, Canadian employers are attempting to fill 915,000 job vacancies, 80% more than in 2019. [5] In addition, according to Life Work’s Mental Index, 35% of Canadians are considering leaving their job. [6] Yet, prior to the pandemic in 2020, only 17.9% of Canadians said they were considering quitting their current position. [7]

Unfortunately, high resignation rates mean employers now face a limited talent pool. Desperate to fill positions in their companies, employers might not be hiring the right people for their business. During this time, some people are being hired based on their resume alone; there is limited due diligence about whether the candidate has the experience required to fill the role.

What are factors contributing to The Great Resignation?

While Canada has not seen the Great Resignation wave U.S companies experienced, the underlying factors leading to an unprecedented number of resignations are common in both countries. The pandemic brought the future of work into the present, and now workers worldwide are asserting their power and demanding flexible hours, higher pay, and remote work.

After the past two years of the pandemic, people have a new perspective on what is important to them; people are focusing more on their well-being. According to the Centre for Addiction and Mental Health, nearly 75% of the population faces increased mental health issues. With an increased focus on self, almost 95% of workers want flexible hours. Many Canadian employers take this challenge seriously by increasing flexibility with deadlines and hours. However, for many other companies, the problem of inflexibility persists. [8]

A survey in December 2021 indicates that roughly two-thirds of Canadians are considering leaving their job because of compensation issues. However, only 23% of employers said they plan to increase pay. Employers are finding that giving significant pay raises to current employees would create pressure to do the same for other staff with a similar position.

While it might be easier for Canadian employers to let people go than to give everyone a raise, the effect of this is foreign recruiting. Foreign employers, such as the U.S, are poaching Canadian talent at unprecedented rates. As such, workers have more opportunities to make more for the same work. For example, according to Business Insiders, young Canadian lawyers are leaving Canada to double their pay at a U.S law firm. [9]

With an increased desire for flexibility, it is no surprise that Canadians also want more freedom in where they work. The pandemic has led to a strong appreciation for remote work, with the amount willing to quit over its rescindment increasing by 20 points from last year to reach 53% today. [10] Despite many companies adopting a hybrid work model, Microsoft’s data suggest that Canadian employees may not be sold on it. Of those currently splitting their work week between the office and home, 51% said they are thinking about going fully remote. [11]

How can employers prepare?

As employers undertake this journey, its important to adjust to understand why employees choose to leave or change jobs and build target solutions. Some approaches might include:

1. Reimagine new work arrangements

The need for increased flexibility is something employers cannot avoid. Companies must reimagine how to structure work to support professional and personal success. With employees rethinking the place work holds in their lives, it is no surprise that an employee is far more likely to want to put in the hours if they are encouraged to take time to balance their personal lives between deadlines.

In addition, companies are also encouraged to modify or add a remote work policy. Employers might be relucent to adopt a remote or hybrid work model, however a study from Owl Labs found that remote and hybrid employees were 22% happier than workers in an onsite office. Remote workers not only stayed in their jobs longer, but they also had less stress, more focus and were more productive than when they were in the office. [12]

2. Provide employees with technology

Being in a digital world, good work requires access to adequate technology. However, equipping workers with updated tech and skills demonstrates an investment in them, the company, and customers. Training your team to use a new application or machine means most of them will learn how to work faster and more effectively. A position with these training opportunities will most likely attract more competitive candidates. [13]

3. Recognize employees for their work

It is essential to show workers how these new work arrangements and skills translate to more purposeful workdays. This means recognizing employees’ contributions and how they might help build a better society. With an increased focus on self, workers want to make an impact. In fact, organizations with formal recognition programs have 31% less voluntary turnover than organizations without any program. Furthermore, they are 12x more likely to have strong business outcomes. Aspects such as performance, goals, recognition, development, and manager effectiveness are inextricably linked to employee engagement. [14]

What can we expect in the future?

The past two years of the pandemic have left so many unanswered questions and unknown outcomes. However, one thing we know for sure is that people are making personal and professional changes to their lives. There is a clear trend in workers taking control of their lives and finding work that makes them happy. This includes a move for better wages, working conditions, and greater recognition.

Experts insist that companies will have to recognize that we have entered a new phase and understand there is no going back. Organizations should embrace what the data says about where employees are and how work has changed and try to meet them there. [15]

Disclaimer: The information provided in this response is for general informational purposes only and is not intended to be legal advice. The content provided does not create a legal client relationship, and nothing in this response should be considered as a substitute for professional legal advice. The information is based on general principles of law and may not reflect the most current legal developments or interpretations in your jurisdiction. Laws and regulations vary by jurisdiction, and the application and impact of laws can vary widely based on the specific facts and circumstances involved. You should consult with a qualified legal professional for advice regarding your specific situation.