Corporate Culture & Productivity

The Great Resignation: Why it’s really a workplace revolution

Darin Herle
February 22nd, 2022

The Great Resignation is having an unprecedented effect on the labor market, with dramatically different results not only from industry to industry, but also from company to company and worker to worker. 

It’s striking fear in many organizations—especially those entrenched in negative work cultures and outdated ways of thinking about work. 

Meanwhile, for companies that learn the right lessons from the Great Resignation, it can become an opportunity to strengthen their culture, better support their employees, and create a more sustainable, future-proof office. 

The Great Resignation is intimately connected to the future of work. That’s why forward-thinking companies are primed to survive it—assuming they see it for the workplace revolution it really is.

In this article, we explore the Great Resignation. We also look at the strategies and technology that can help companies both weather the storm, and come out stronger on the other end. 

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What is meant by the Great Resignation?

The Great Resignation is a massive workplace revolution that is forcing companies to reexamine how they prioritize employee experience. It also requires that companies look at how they use workplace technology to support workers. 

Especially over the last year, workers have been leaving their jobs in large numbers. This is leading companies to reevaluate how they can better attract and retain top talent. 

Yes, some amount of turnover is part of a healthy job market. But 2021 saw record turnover, which has raised alarm bells inside many companies. 

Specifically, in their Job Openings and Labor Turnover Survey (JOLTS) publications, the US Bureau of Labor Statistics reported that what they call ‘quits’ (i.e.: people voluntarily resigning) first reached a historic high in September 2021. 

At 3%, the September quits rate was indeed the highest rate since the bureau started publishing this data in 2000. Only to be beaten again in November.

All said, since Spring 2021, about 33 million Americans have quit their jobs.  

And beyond these numbers, we know from Microsoft research that 41% of workers globally are thinking about quitting. This means they’re more than open to new opportunities that might come along, even if they don’t quite have their resignation letters written yet.  

Which industries does the Great Resignation affect?

We’ve seen an exodus of workers in the healthcare space. This is unsurprising, since these are the frontline people who have borne the brunt of the worst of the pandemic. 

But like many economists predicted, no industry has been safe from this sudden departure of staff. Services industries like retail, hospitality, and food service are seeing employees leaving in droves. 

Thankfully, while these numbers sound scary, it’s not all doom and gloom.

Like Ron Carucci helpfully points out, while Microsoft’s 41% number is alarming and certainly salacious enough to make it into countless think pieces on the Great Resignation, it also points to the fact that 59% of workers arent planning to quit, and aren’t looking for new opportunities.

Clearly, retention should now be top of mind for all smart companies. They should also consider the benefits they can add to new jobs to stand out in a crowded employee market. Companies that take the time to listen to employees and understand their concerns are putting themselves in a much better position to retain their top talent and weather this storm. 

“Employers should be talking to their labor force to preempt or limit the amount of employee turnover … If managers are preemptive, asking employees if they’re happy and finding ways to address burnout, it’s easier to retain them. The cost of a complete staff turnover could be astronomical.”

Arran Stewart, co-founder of Job.com

Who coined the phrase the Great Resignation?

Organizational psychologist and professor Anthony Klotz is famously credited with coining the phrase ‘Great Resignation’ in a Bloomberg article in May 2021.  Pointing to pent-up resignations due to uncertainty from the pandemic, he predicted—correctly—that resignation rates would pick up speed as companies reopened and people started to adjust to the ‘new normal.’ 

Of course, Klotz wasn’t the only one to predict the Great Resignation. 

For example, Melissa Jezior, president and CEO of Eagle Hill Consulting, warned of an upcoming ‘talent tsunami’ in March 2021. She pointed to a poll her firm conducted that found 57% of workers were reporting burn out. A reality she predicted would play out in some amount of job shuffling ahead. 

Thought leaders also refer to this phenomenon as the ‘Great Reshuffle,’ ‘the Big Quit,’ or the ‘Great Attrition.’

And given the shift in the balance of power between employees and employers, with employees now able to demand better pay and working conditions, the team at Planet Money suggests calling it the ‘Great Renegotiation.’

Either way, no matter what we call it, we are in uncharted territory in the world of work. Which can be scary or exciting, depending on a company’s perspective and willingness to change. 

great resignation drivers

What is driving the Great Resignation?

Like any complex phenomenon, many factors are driving the Great Resignation. 

Certainly, in the early days of the pandemic, people were worried about the future. They held on to jobs they might not have otherwise, leading to what Klotz called pent-up demand for resignations. 

Coupled with the fact that this time period also saw American job layoffs at the lowest rate since 1993, some amount of churn was to be expected when the economy reopened.

Plus, now that it’s an employee’s job market, there’s no reason to stay in a low-paying, unsatisfactory job in one restaurant. Especially when you can easily get a better one at the restaurant across the street. Which is why there’s now particular stress on the service and retail industries. 

Ultimately the pandemic created an inflection point. It also created an opportunity for economists and thought leaders to continually analyze and reanalyze the many factors that caused it. 

Of course all this analysis may miss a larger point. 

The coronavirus wasn’t just a turning point for businesses, and it certainly isn’t only affecting the world of work. A once-in-a-lifetime event, not only has it made the ground beneath us a little less solid. We also must now think more deeply about that ground beneath us in the first place.  

Especially in the scary early days of the pandemic, we all learned first-hand how quickly life can change. We also learned how important the little things are and how much it matters to spend quality time away from work and with loved ones. Perhaps more than anything else, the Great Resignation simply speaks to the fact that American workers want more from their jobs. 

Workplace culture and quit rates

One need only peruse the ‘Antiwork’ subreddit to find scores of workers who feel fed up by a system that many feel is stacked against them:

As you get older you realize that spending all your time for your company isn’t worth it and not spending time for yourself will make you snap mentally. Enjoy your life,” says one user. 

Time to quit,” is another user’s not-so-subtle advice to a story of a manager giving an employee a hard time about trying to book time off.  

Of course, employees also struggle with more than just tough managers. Pre-pandemic research showed that 40% of employees felt isolated in the workplace, too. 

Add in the forced isolation brought on by COVID restrictions, and suddenly you have a labor force that is fed up, unhappy, and ready for something better. 

Specifically, critical new research from Revelio Labs shows just how important workplace culture is to workers’ quit rates. Attrition rates can actually vary wildly, from 2-30%, depending in large part on how well a company treats its staff. 

This new research highlights a fact that no company will be able to ignore. Dissatisfaction with company culture (not pay) has been the biggest driver of resignations during the Great Resignation. 

In fact, the top five predictors of attrition, in order, are:

  1. Toxic corporate culture 
  2. Job insecurity and reorganization 
  3. High levels of innovation 
  4. Failure to recognize employee performance
  5. A poor response to COVID-19

Note that salary doesn’t even make it into the top five here. In fact, this research found that a toxic culture is 10 times more important in predicting turnover than compensation. 

In short, people simply no longer want to work in negative and unstable workplaces. They’re taking this opportunity to make better lives for themselves. It’s the employees themselves who are demanding a workplace revolution, and they’re in the perfect position to demand it. 

“Americans are burnt out. I like to think of it as– it’s a, ‘Take this job and shove it,’ measure. It’s just a sign of people saying, ‘You know, I don’t need this.’”

Karin Kimbrough, Chief Economist at LinkedIn

Which key groups of workers are embracing the Great Resignation?

The Great Resignation is global in scope, driven by both white-collar and blue-collar workers and all generations in the workplace. Virtually no American industry is left untouched. 

That said, there are certain key groups of workers who are leading the charge.   

Early on in the pandemic, many older workers bumped up their retirement dates. They were often citing well-being and health care concerns, burnout, or shifting priorities. 

Specifically, the time period from February 2020 to April 2021 saw 1.5 million more people retiring than in the previous year. 

New opportunities and career changes

Many people have also used the Great Resignation as an opportunity to make that industry or career change they’ve been dreaming about. For example, we’re seeing record numbers of employees quitting their jobs to become self-employed and start their own companies. Workers who have the privilege to walk away from a paycheck are now realizing there’s no time like the present! 

According to new research, quit rates are highest among employees who are mid-career, as well as those in the technology and healthcare spaces. 

And like we’ve covered, low wage workers in leisure and hospitality have been happy to take advantage of a job market suddenly stacked in their favor. These industries tend to have high voluntary turnover in the best of times. So perhaps it’s not surprising that we saw record numbers of employees in this space quitting in 2021. 

The impact on parents

Finally, a troubling side note is that the Great Resignation also seems to be driven by parents. And especially mothers, more than other workers. In fact, 1.4 million fewer mothers were working in the fall of 2021 than in the previous year. 

“We know that parents are out of the labor force because of ongoing Covid-related care responsibilities” says Heidi Shierholz, president of the Economic Policy Institute. 

In what Misty Heggeness, an economist at the US Census Bureau, calls “care insecurity,” some increasingly burdened workers are struggling to balance their caregiving duties with unpredictable work hours and responsibilities.

Like we’ll cover further below, offering caregivers flexible hours and embracing agile working in particular can dramatically improve the ability of parents and other caregivers to stay working while also keeping up with their real-life duties.

“Both Millennials and women report higher levels of burnout, as do employees with kids remote learning at home. Leaving is often viewed as the best option for employees to address burnout.”

Melissa Jezior, president and CEO of Eagle Hill Consulting
great resignation effect on workers

What is the effect of the Great Resignation on workers?

The Great Resignation is dramatically empowering workers. Employees are no longer disposable (not that they ever really were), and companies ignoring their needs do so at their own peril. 

Prior to the coronavirus pandemic, 83% of workers were concerned about losing their job. This was due to factors like automation, foreign competition, and the gig economy. 

But today, they are now in a position to demand real benefits. This can include things like better childcare and health care options, more flexible hours, and better pay. Perks are great, but workers don’t want superficial fixes—they want lasting change. 

In other words, because of the Great Resignation, employees are now in a position to demand a better work-life balance, as well as a better company culture.  

Work-life balance

Yes, better pay may be a factor in some quits. And companies with typically low-wage jobs like Amazon, McDonalds, and Walmart have started boosting wages

But what employees are really asking for is a much better employee experience. This includes having a seat at the table when it comes to developing new working strategies. 

Even before the pandemic, employees were beginning to demand more flexible working options.  

For example, in 2013, a Deloitte study found that 92% of Millennials already ranked flexibility as a top priority at work. And one in three workers ranked work-life flexibility as the most important factor in choosing a job. 

The reality is that life is messy, and rigid hours don’t work for everyone. Having to be at the office every day can be challenging for some workers—and expensive, too. Even when employees only work from home part time, they can save between $600-$6000 per year. These savings include things like travel and parking, as well as up to 11 workdays per year in commuting time. 

Ultimately, thanks in part to the effects of the Great Resignation, employees can now expect more flexible work options in happier, healthier work environments. And the more flexibility employees have, the better their work-life balance will be, too. 

“When the stars align as they’re aligning now, workers gun for better pay, perks, flexibility, and treatment. Bargaining power has shifted in their favor.”

Greg Rosalsky, Planet Money
great resignation effect on workplaces

What is the effect of the Great Resignation on workplaces?

In response to the Great Resignation, workplaces are becoming increasingly flexible, remote, and innovative, in an effort to attract and retain workers. This is fueling a once-in-a-generation workplace revolution that is changing how we’ll view the office for decades to come. 

Remember that some leaders are now thinking of this new era of work as the ‘Great Renegotiation.’ It’s part of a transformation that is forcing companies to think about whether they’re actually adding value to their workers’ lives. Companies need to ensure they are both helping their employees to be their most productive, and also to feel included and valued. 

This means that first and foremost, companies are having to rethink what they are offering their employees, beyond salary. They will have to ask themselves some important questions: What does it mean to be flexible at work? Are we really offering employees a good company culture and work experience? Do they have all the tools they need to be inspired and productive?

For example, in knowledge jobs like those in the tech industry, if employees are able to work remotely, they are going to want to, at least part of the time. 

Like Stewart Butterfield, CEO and cofounder of Slack Technologies, said at the Fast Company Innovation Festival, “If we say that everyone must return to the office, or we expect people to, and one of our competitors says you can work remotely, who wouldn’t take the second option there?”

Moreover, a disturbingly large number of people feel a disconnect at work. This leads to a feeling of isolation, which remote work can exacerbate. 

The hybrid workplace

So as more emphasis is on inclusion and improving company culture, this may include implementing hybrid workplace models. These models can be customizable to fit each company’s needs and better support their workers.

That’s why we can expect to see more hybrid work in general. We’ll also see a variety of new work environment types in which employee satisfaction and engagement are key driving factors.  

For example, don’t be surprised to see agile working pick up steam in the near future. This is a working model that puts employees squarely in the driver’s seat. They get to pick when, where, and even how they work. Companies that use agile working strategies trust their employees to ‘do the work,’ as well as to make choices that allow them to do their work better. Even if that’s working unorthodox hours or in different public spaces each day.  

Companies should also expect to include employees in the decision-making around office design and workplace strategy as much as possible, which will require good collaboration in the workplace

Finally, workplaces will have to be upfront about their workplace strategy and culture from the get-go. There’s no point in hiring new employees who want unlimited flexibility, if your company is not in a position to offer that. 

“There may be some tension initially between employees and employers as their desires for a certain style and application may not match, and that’s totally fine” says OfficeSpace CEO David Cocchiara. “Workplace style is becoming just another qualifier that people consider when they’re searching for jobs. Employers will simply have to be clear with their candidates about the way their office works.”

flexible work

The workplace revolution: how to recreate the workplace for sustainability

Clearly, workplace leaders need to reframe the Great Resignation and see it for what it is. It’s a unique opportunity to create a new and dramatically improved office that is better for both workers and the bottom line. 

The future of remote working can be one that greatly benefits both employees and employers. But only if workplaces embrace hybrid and flexible working options that make sense for their unique needs, along with technology and other tools necessary to optimize new working arrangements. 

“I would expect to see a post pandemic work organization as one that moves away from a one-size-fits-all approach towards one that allows individual and asynchronous organization of work and work settings. For example, I expect that companies will allow a part of their workforce to work fully remote most of the time and allow another part of their workforce to come to the office only on 1-2 days a week.”

Professor Dr. Isabell Welpe at the Technical University of Munich 

The future of work is flexible and hybrid

As we’ve covered extensively, we now know that employees want a lot more flexibility. 

Moreover, as a recent OfficeSpace survey discovered, the majority of American workers are looking for a hybrid experience at work. So much so that 43% would quit their jobs if required to go back to the office full-time.

Also critical in this overcrowded job market, companies that adopt the hybrid working model are also opening themselves to a much bigger talent pool. Potentially even a global one. 

Thankfully for employers, ‘hybrid’ is a catch-all term that covers a wide variety of arrangements to meet their distinct needs. 

Specifically, Cocchiara identifies four hybrid models, each of which can match both a company’s corporate real estate needs, as well as their approach to employee experience. 

Companies that are unable to freely adopt hybrid work can stick with a ‘traditionalist’ model, where they remain office-focused but bring in digital workplace solutions wherever possible. And on the opposite end of the spectrum, companies that are ready to adopt the whole nine yards of hybrid work can embrace a ‘pioneer’ model that will see them giving all their employees complete freedom to choose where, when, and how they work. 

Meanwhile, most companies will likely find themselves falling somewhere in the middle, ready to offer a great deal of flexibility along with hybrid options, but in a more structured manner. The ‘architect’ model is often a good fit for consulting firms and startups, because it focuses on using hybrid work to reduce their real estate portfolio. On the other hand, the ‘nomad’ model is best for companies looking to focus on employee experience first. In both scenarios, the onus is on employers to ensure they’re creating a work environment that supports all workers. 

Working models to choose from

Of course, there is a wide range of flexibility within each hybrid model as well. Specifically, no matter where they fall on the spectrum, companies can experiment with a variety of new working models, including:

  • Activity-based work (ABW), which relies on using good activity-based workspace design to create offices where the task or activity directs how workers interact with the office
  • Agile working, which gives almost complete control and flexibility to workers and their individual preferences for completing tasks
  • Office neighborhoods, where employees in the same department, sharing a project, or meeting other similar criteria are in groups or ‘neighborhoods’ that inform where they sit and how they use the office 

Office neighborhood examples coming from companies like Google, Groupon, and Uber point to the particular effectiveness of this model. That said, any of these strategies has the potential to work for any organization. This is, of course, given they take the time to actively match it to their employees’ preferences and structural requirements. 

Improving the employee experience

Again, none of these strategies are one-size-fits all. There will also be companies that choose to respond to the pandemic and the Great Resignation by going fully remote. That’s why all companies will need to ensure they offer employees a solid digital workspace. They must give every employee access to the same tools and resources, no matter where they’re working.   

Lastly, workplace strategists will need to remember that it has been toxic company culture and high levels of burnout that have primarily fueled the Great Resignation. It’s easy to get lost in the weeds when developing a hybrid workplace strategy for the office. But the main goal should always be improving (or at least maintaining) employee experience, to improve culture and prevent burnout. 

Like Cocchiara stresses, “there’s a really broad range of possibilities and hybrid office environments that different companies are experimenting with. We can expect to see companies move through different models as they try to figure out how to maximize productivity and engagement.”

“Plenty of employees don’t really want to resign. If their company would let them keep working from home or do fewer hours, they would.”

Anthony Klotz, associate professor of management at Texas A&M University

A new office experience for American workers

Just like you can’t un-ring a bell, we can’t go back to an office experience that forgets the lessons learned from the pandemic. Virtually all office workers have worked remotely for some amount of time in the past two years. We now know that most offices can support some level of hybrid working. The way we see the office has therefore been permanently changed. 

Specifically, the office is becoming more of a destination, rather than the default and only place where work gets done. Working from the office is not inherently better or worse than working from home. But the office does have its own unique advantages—especially around collaboration and communication—that make it an attractive place to be some of the time. 

“For the majority of industries that are able to embrace flexible work, employees don’t just go to the office because they have to be there,” says Cocchiara. “They go because there’s something they’re trying to accomplish. Whether that’s collaboration with another team or within their team, planning, reviews, brainstorming and similar activities.

Companies that ensure that the office space is inviting and inspiring, while keeping health and safety top of mind, will be creating a sustainable hub of activity that can improve company culture and make employees more likely to stay. 

Technology to support visibility and the workplace of the future

There’s no doubt that the hybrid workplace and the employee experience are intimately linked. The better the tools and technology offered to hybrid and remote workers, the better their experience will be. Hybrid working tools can ultimately make a more cohesive working experience for everyone on the team. 

For example, hybrid workplace technology like desk booking and room booking software can help employees better adjust to flexible seating policies. Critically, when these systems are tied into better wayfinding and IoT sensors, and when they’re made readily accessible to all workers via a mobile app, they can also increase visibility in the office. 

“Companies need to make sure people have visibility around when they should and shouldn’t be coming into the office,” says Luke Anderson, VP of Product and Strategy at OfficeSpace.  “Offering more visibility can remove barriers to adopting the hybrid model. It should be easy for employees to find what they need, book desks, and feel comfortable and productive.”

In other words, companies can use technology to create more visibility. This results in a more inclusive and collaborative company culture for everyone. Better still, this technology can also offer reporting and analytics that can lead to more informed decisions for the workplace. 

Potential outcomes from the Great Resignation

Because losing employees drains resources and dampens morale, companies that resist this workplace revolution will struggle to stay competitive. 

Meanwhile, those that adopt the right workplace strategies and technologies will do more than just survive the Great Resignation. They’ll be future-proofing their organization. 

The reality is that as the world is becoming increasingly chaotic, it’s getting harder and harder to predict the future. If it were ever possible. 

Companies that embrace these workplace and technology changes are consequently establishing sustainable procedures that can help them weather the next storm. Whether that’s a somewhat predictable storm, such as an office reshuffle, or a completely unpredictable one, such as a new pandemic strain like Omicron.

These companies will have a better workplace culture that not only keeps employees happy but also leads to a more productive and collaborative workspace

And the tools a company uses to support a hybrid workforce can make it easier to adopt new technology.  

Finally, since workspaces that focus on streamlining and adopting new technology tend to be more efficient, companies can also expect more immediate cost savings from embracing all this change. 

Specifically, some companies may be able to use new data and technology to improve their space utilization. Therefore, they can cut back on their real estate portfolio. This can save money, while also cutting back on a company’s overall carbon footprint. 

why is the great resignation happening

Why is the Great Resignation happening? 

There is no one easy explanation for why the Great Resignation is happening, despite what any number of economists or journalists say. Employees are leaving different jobs and different industries for different reasons. 

But while there’s no easy explanation, the answer as to how to survive the Great Resignation is more simple. Put your people first. Companies that focus on employee experience are those that will survive this upheaval. 

Yes, change is always scary, and the Great Resignation may be no exception. That said, change can also be exciting. And the workplace revolution we’re currently experiencing can have profound, positive impacts on organizations that embrace it. 

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OfficeSpace offers comprehensive tools to help organizations create a better employee experience and survive the Great Resignation. Reach out for a free demo. 

Photos: Yan Krukov, Karolina GrabowskaAlexander Suhorucov, LYCS Architecture, Sigmund, Andrea Piacquadio