Understanding the Great Resignation in Australia 2022

As turnover reaches new highs in the US, the Great Resignation continues to dominate headlines. The Labor Department's Job Openings and Labor Turnover report showed that 4.5 million US workers left their jobs in November.  

Klotz mentions that "The Great Resignation" has inspired other terms to describe the work revolution we are witnessing, such as "The Great Reimagination," "The Great Reset," and "The Great Realisation." but these terms miss the consequences of the quitting wave and what it means for employees. 

"It's not just about getting another job or leaving the workforce; it's about taking control of your work and personal life and making a big decision – resigning – to accomplish that," Klotz told CNBC Make It. "This is a moment of empowerment for workers that will continue well into the new year." 

The big question to which we need to know the answer is 'Is the Great Resignation a thing in Australia?'. 

What is the Great Resignation? 

The Great Resignation, The Great Reshuffle, The Big Quit, The Great Reimagination or The Great Realisation are all trending in the news and are all the same.  

Anthony Klotz says, "There's all this talk about people wanting more flexibility post-pandemic," says Klotz. "There's an opportunity here for organisations to get together with workers who have to be in person and say, 'Within the constraints of our business, let's raise wages and benefits, but let's also think about flexibility more innovatively.'" 

Its' time to rethink, reshuffle, refocus, and reset to overcome the Great Resignation. Human-centricity, agility, resilience, and sustainability are opportunities for organisations to embrace to retain people. 

Three key predictions by Klotz: 

1. Competitiveness will increase for remote jobs.  

Due to the great resignation, companies are turning to automation and remote workers to fill open positions. Social distancing and virus fears are reasons companies have adopted digital platforms and automation technology. 

The World Economic Forum surveyed approximately 300 global companies in 2020, and 43% expect to reduce their workforces due to the great resignation due to innovative technology and labour shortages. The same benefits push companies to hire more international candidates for remote roles and create even more competition for remote jobs, which in turn means that the labour cost for a company could decrease depending on the location and pay grades for roles. 

2. We will see a slower pace of the Great Resignation.  

According to Klotz, quitting rates will remain high over the coming year, but he is unsure if "we'll see another big quitting wave in 2022." The tighter labour market has made companies offer more or better benefits to prevent employee turnover. 

3. Flexible work arrangements will be the norm, not the exception. 

According to Anthony Klotz, "Leaders are starting to ask, “How can we give people more power over their schedules? How can we be more flexible?" more companies need to embrace flexible work arrangements to attract and retain talent. 

Flexible working culture helps to improve employee mental health and work-life balance. "A silver lining of this horrible pandemic is that the world of work will make a hugely positive step forward for workers," says Klotz. "Work will fit around our personal lives rather than our personal lives fitting around work." 

Is the Great Resignation happening in Australia? 

Australians have chosen to reassess their career and lifestyle options due to on and off lockdowns and increased workloads due to labour shortages. They have also had time to think, and work-life balance has been at the forefront based on the radical changes to the way of working due to Covid.  

PwC Australia surveyed over 1,800 Australians to help employers understand what workers want as the labour market changes - this was the first Australian study to look at The Great Resignation and what workers want at this scale. The PwC study, What Workers Want: How to win the war on talent, found that 38% of Australian workers intend to leave their current employer during the next 12 months, and 61% of those who left an organisation last year intend to leave their current employer in the next year. 

On the other hand, 55% of Australian workers expect to stay with their employer for at least five more years - meaning people will either leave soon or remain for a long time. In addition, 93% of Australian workers feel trusted, and 77% are engaged in their roles, which are essential for hybrid working effectiveness. Although this may reassure employers, especially after a particularly challenging period for employers and employees alike, it does not necessarily foster loyalty. 

Future of Work Lead at PwC Australia, Dr Ben Hamer, said, "Australia is on the precipice of The Great Resignation. This phenomenon will be in full swing by March 2022, driven by market stability, increased consumer confidence, the softening of interstate borders, and the usual post-summer holiday recruitment activity. 

"The balance of power has shifted from the employer to the employee. Competition for talent has intensified, and those that fail to adapt take a big hit. To protect themselves from the full force of The Great Resignation and attract the right skills, companies need to know what workers really want and reimagine their employee value proposition to deliver on expectations." 

According to former Australian treasurer Josh Frydenberg, the labour market in Australia is undergoing a 'Great Reshuffle' rather than a Great Resignation. The Treasury estimates that over a million workers found and started new jobs between November 2021 and February 2022. 10% more than the pre-COVID average. Over 300,000 employees moved up the ladder and got better pay after leaving their jobs.  

Treasury also confirmed that workers who changed jobs received 8-10% salary increases. Frydenberg confirmed that these workers also moved to more productive firms that helped them grow. The great resignation will eventually fade when we prioritise the company's employees who serve as assets. 

It is important to note that not all aspects of the great resignation are bad as it does allow for companies and employees to review and reset. When employers and employees can be open and honest, their workplace is a better environment, and the business will grow. According to Frydenberg, "it is time for business to get back to business". 

When did the Great Resignation start? 

In the US, the great resignation was first discussed in May 2021 by Organisational psychologist Anthony Klotz in an interview with Bloomberg. The basis for the discussion was the ongoing Coronavirus pandemic and how people have been quitting their jobs due to evaluating their work-life balance and why they work. 

In Australia, the great resignation has been gradual, as we see a shift in attitude toward work, life, and careers. The push for change has come with COVID-19, as employees have become more self-serving. Delta and Omicron variants have made it easier as employees have taken the opportunity to review, reset and move. 

Why is the Great Resignation happening? 

A few key factors ignited the great resignation but, it is employees assessing everything from flexible working, remuneration, working hours and work-life balance.  

PwC’s 'The Future of Work - What workers want: Winning the war for talent' highlights the top reason for employees switching jobs remains higher pay; however, employees and job seekers are getting savvy about mental health benefits. Workers expect their employers to prioritise their well-being.  

Work-life balance boundaries have blurred with Covid, and mental wellness insights have become the forefront of the conversation. Most employers are reviewing the employee value proposition and the focus for change is workplace environment, culture, and employment practices. Employers are incorporating employee well-being to stand out in an employee-driven labour market.  

Key well-being focus areas are:  

• Minimising stress and burnout by adopting flexible work policies, such as remote or hybrid arrangements or even a 4-day week. 
• Creating a psychologically safe work environment where mental health is open to discuss 
• Access to digital mental health services as part of health benefits. 

• Offering mental health breaks and non-conventional leave, such as pet bereavement leave. 

How to combat the Great Resignation. 

The Harvard Business Review reported that employees are 23% more likely to experience mental health issues if their managers do not communicate effectively. The global pandemic has pushed the bar on remote working. Most employers have embraced this new way of working. Communication has become harder with remote working, but every business needs to ensure that they have reviewed how they communicate to ensure their workforce is kept informed and engaged.  

For retention and growth employee movements need to align with business changes, industry trends, and the business's overall economic outlook. These insights are invaluable. Employee turnover rates should be at the forefront of every industry to understand who, when and why an employee left the company. Here are 5 strategies that will help you on what to do when a key employee quits.  

Five ways to combat the great resignation:  

1. Review your employee value proposition - ask your employees what they want and align what you offer for retention and recruitment. Pulse surveys are an effective way to gauge what your employees are thinking.  
2. Review your workplace environment to minimise stress and burnout, offer a safe work environment, and offer digital mental health services and mental health breaks.  
3. Review your remuneration policy, there is an odd relationship between compensation and performance. A strategy could be to make both transparent. 
4. Review how you communicate with employees and change what is not working for retention and engagement. 
5. Keep abreast of business changes, industry trends, and overall economic outlook to ensure your business remains agile, attracts, and retains the best workforce for your business.