It has been two years since the outbreak of Covid-19. As the pandemic ploughed its way through the world, it has brought radical changes in the labour market. One of the most baffling phenomena it had ignited is workers’ mass exodus from the labour market, known as the ‘Great Resignation’.
Initially, the mass departures started in the United States, with almost 3 per cent of the nation’s labour force quitting their jobs in September 2021 (4.3 million in Sept., 24 million March-Sept.), according to the US Bureau of Labor Statistics. Many Asian countries and European countries such as Germany, China, and Japan are seeing similar trends. China is experiencing the rise of the ‘lie flat’ movement, where workers protested against the 9am-to-9pm work schedules. In the
2021 Work Trend Index report from Microsoft, it surveyed over 30,000 workers around the globe and found that 46 per cent are planning to quit or switch jobs.
It gets more puzzling if we chart the phenomenon along with the overall positive macroeconomic trends of these nations. For instance, despite the Delta variant outbreak, the EU Commission raised its growth projections for 2021 from 4.3 to 4.8 per cent. The stock markets continued to show positive growths. In the US, at the start of the third quarter in 2021, the country reported the best job creation rate since March 2020, with 943,000 new jobs created. The only thing missing from the positive outlook of these countries is people willing to work. Why are so many people quitting?
The departures may be partially explainable using conventional wisdoms. One conventional argument is the side-effect of governments’ Covid-19 stimulus packages. Countries including Singapore and other G20 countries have provided households with several relief funds without any work requirements (e.g., one must have a job to be eligible). The funds essentially serve as welfare benefits that can potentially disincentivise many to stop self-sustaining.
Yet, researchers believe that such conventional explanations cannot fully explain the mass departures. We are witnessing several new drivers at play, which have led us to believe that workers are thinking differently about the meaning and the mode of work.
1. Changes in priorities
Before Covid-19, most of us used to assess the value of work mainly by the compensation—how much my job pays the bills in relation to how much effort I put into work. The pandemic around the globe has given us reasons to re-evaluate the meaning of work. If I can lose my loved ones to the pandemic, is it okay for me to work this much and not spend enough time with my family?;Those who had to maintain physical contacts with others at the height of the pandemic came to think hard about whether their jobs were worth risking their lives. Resignation rates were the highest in hospitality or services industries, which required face-to-face contact with co-workers and customers. Moreover, the introduction of remote work has highlighted traditionally overlooked work features: How important are the interactions with co-workers, a physical office space, a separation of work and personal life? Should I re-evaluate my job when these arrangements break down?
2. Hello, remote work
The pandemic and its variant strains has also accelerated the utilisation of technological capital to launch remote work (‘work from home’). In Singapore alone, almost half of employed citizens worked remotely in 2021. Since its introduction, some of us have found our productivity increasing. The remote setting allowed us to tailor work-hours according to our needs and tastes, removed distractions from colleagues and reduced the hassle of commuting. Others found their productivity declining, with more distractions from family, fewer chances for peer-to-peer information sharing. Despite the polarised experience of workers, many agree that the availability of remote-work options opened up more work opportunities, leading to many workers to search for ‘better jobs’ without worrying as much about the physical locations or commuting burdens.
Some workers’ newfound fondness for remote work was so strong that this ‘mode of work’ was prioritised over the job itself. The public health concerns fuelled by the Alpha, Delta, and Omicron variants justified this priority. As more countries proposed to ‘live with Covid19’, urging workers to return to the traditional modes of work, many resorted to quitting and look for other jobs that maintained remote-work options.
3. Unconventional strategies
Given the fundamental shifts in the way we view ‘work’ in the Covid-19 era, conventional work incentives—raising monetary rewards and in-kind benefits—are unlikely to stop the mass departures. Several new management tactics are being suggested, including a push for employers to better understand firms’ retention risks by conducting exit-interviews to identify push factors and stay-interviews to identify what keeps employees.
Employers can aspire to foster a better work environment that respects workers’ mental and physical well-being through actively reconnecting with employees despite the remote mode of operation. More varied efforts to promote a stronger sense of job security and identity via providing skills training as well as raising the employee inclusivity by engaging employees’ feedback in re-designing work structures and team dynamics can bridge job insecurity gaps.
The fact that one mode of work (person-to-person) does not suit everyone anymore suggests that employers may need to accept the hybrid mode of work as the new normal in order to future-proof their firms. For office jobs, ‘work-from-anywhere’ may be what it takes to retain workers and attract new ones, especially given that over 70 per cent of workers want flexible remote work options to continue participating in the labour force.
Effective hybrid modes of operation require a strong culture of trust, firm-identity, self-discipline, and new ideas to foster collaboration and networking. Employers now have accrued ample first-hand experiences and data on the effectiveness of the hybrid mode of work through the trials and errors in the past two years. Augmenting the systems, structures and resources for hybrid-work arrangements that fit the employees’ needs and operations will help encourage their return to work. For jobs requiring in-person contacts with co-workers and customers, allowing for more flexibility and autonomy in scheduling could be a solution.
Paths back to work
If the departed workers remain unemployed due to the persistent public health threats posed by Covid-19 and the continued labour market volatilities, such mass unemployment can worsen the fiscal burden of the governments to provide social safety-nets. Policy-makers and agencies should join forces with employers to lead workers out of the Great Resignation to avoid further strain.
While much has been done to understand why the Great Resignation is happening in many countries in the face of the ongoing pandemic variant strains, more efforts need to be made to stop or to avoid the phenomenon. Despite that about 56 per cent of the nation’s labour force are considering quitting or switching jobs in Singapore, according to the 2021 Talent Trends report by Michael Page, the country’s resignation rate is still steady at 1.6 per cent during the first half of 2021. As the Great Resignation not yet a reality, Singapore may be able to stop this from happening through its active and continual policy-making efforts and engagements—which rolled out since 2020 and generated a rise in resident employment by the third quarter of 2021.
Countries will need to consider if subsequent Covid-19 stimulus funds are deemed necessary, and if they are, such benefits could be provided with embedded work incentives to encourage work. In addressing the labour market changes brought by the global pandemic, policy-makers will need both insights from the past experiences and new creative strategies to ensure that nobody falls through the cracks in the years ahead.