The Great Resignation: What We Can Learn from the Employee Exodus

Photo Credit: CFI Education

A recent article in the American Prospect  by David Dayan caught my attention with this simple quote: “You can measure a worker’s worth by how they were treated in the pandemic.”

Mark Cuban made a similar comment earlier in the pandemic to the effect that companies will be judged by how they treated employees in a time a crisis.

Of course, the pandemic of 2020, 2021, and soon to be 2022, has generated a combination of factors that are unique for just about everyone alive today, but one, unexpected outcome has been the rebellion of many workers, across the spectrum of employment, to working conditions that employees previously broadly “put up with,” despite often debilitating effects. Although we’ve seen frequent mention in the media throughout the pandemic of the need for organizations and their leaders to support their employees needs as people as well as employees, my sense is that the “great resignation” suggests that huge numbers of employers have failed the test. Of course, there are almost certainly multiple potential variables driving the exodus, such as increased savings for some families, historically low unemployment (and thus availability of other jobs), stimulus and unemployment benefits, etc. However, what is likely at the core of the massive, collective decision to quit jobs, sometimes in dramatic fashion, is the calculus now shared by so many Americans that even if they have to give up income and make different life choices, working conditions in many cases have simply become untenable to the point that they would rather make potentially substantial sacrifices to avoid the drudgery, disrespect, health-risk, and even abuse that come with many jobs. In fact, we’ve learned that even $15 or $16 per hour is not enough to compensate misery for many workers.

Just how big is the phenomenon?

In August and September of this year combined, over 6% of the entire U.S. workforce quit, followed by another 4.2 million workers in October, for a staggering total of over 12.5 million! That has never happened before in American history. This trend has continued through November and December, but we don’t have official USBLS data yet for the most recent two months.

One thing the unprecedented labor realities of the pandemic has demonstrated is that showing tangible care for employees may itself turn into a significant competitive advantage over time even if it compromises profits in the short term. And in many cases, it will actually drive growth and profits, even in the short term. An interesting example is in the shipping and logistics industry. UPS has experienced a fraction of the turnover during the pandemic experienced by FedEx and Amazon. Why might this be? UPS has a stable, unionized workforce, that not only makes more money, but receives good benefits, and works in more employee-friendly and stable environments. Amazon had to spend billions of dollars in just the second half of 2021 to hire both new and replacement workers and suffers substantial turnover. Only one small part of FedEx’s workforce is unionized, and with the exception of their pilots, have suffered significant turnover as well. To be clear, this is not an argument for unionization per se. In fact, unionization does not make sense in many smaller, modestly paid workplaces. It is an argument for recognizing that workers/personnel/employees/labor also happen to be human beings and that even when wages are low, the work environment can be fair, respectful, stable, and supportive of employee wellbeing. When it’s not, employers will pay a far higher cost in the long run.

If your organization is ready to transform its view of human capital and reap huge rewards, reach out to us at the Transformation Collaborative™ for a complimentary consult on what that might look like for you.

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