Is the Great Resignation over?

Is the Great Resignation — the phenomenon where people quit their jobs en masse across the globe — finally over? Some experts say that we’re now seeing a shift to employees staying in positions longer in a trend dubbed the “Big Stay.” In this article, we will explore the Great Resignation 2023 in more detail, including its causes, impact on the European labor market, the outlook for Europe in 2024, and how leaders can help prevent mass resignations in the future by focusing on employee job satisfaction.

The History of the Great Resignation

The Great Resignation — also dubbed The Great Reshuffle, The Great Rethink, and The Big Quit — is a term used to describe the mass exodus of people from the US labor force which occurred throughout 2021 and 2022. Anthony Klotz, Associate Professor of Management at Texas A&M University, coined the term. In May of 2021, he predicted a massive wave of resignations in the US following the pandemic. 

“The great resignation is coming,” he said in an interview with Bloomberg that month. “When there’s uncertainty, people tend to stay put, so there are pent-up resignations that didn’t happen over the past year. The numbers are multiplied by the many pandemic-related epiphanies — about family time, remote work, commuting, passion projects, life and death, and what it all means — that can make people turn their back on the 9-to-5 office grind.” 

His predictions turned out to be true. Unsettled by the pandemic, many Americans found themselves reconsidering their jobs. They started looking for roles that offered a better work-life balance, seeking new career opportunities or simply leaving the workforce altogether. 

According to an Indeed survey of US workers who switched jobs at least twice since the start of the pandemic, 92% said they felt life is too short to stay in a job they aren’t passionate about. This mindset shift resulted in around 47.4 million Americans quitting their jobs in 2021, a trend that remained strong throughout 2022. The quitting trend did wind down to a certain degree in 2023, with numbers leveling off to pre-pandemic levels by early 2024, but the early days of mass exodus created a ripple effect that slowly spread across Europe and the rest of the world.

The Great Resignation spreads to Europe

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Shortly after the pandemic, European-based companies watched the Great Resignation take hold of the United States from a safe distance, confident that their people would stay put. After all, many European countries had strong social safety nets in place to support both employers and employees during these disruptive times. While it’s true that the pandemic did not spur the same mass resignation sentiment amongst European workers as it did with their American counterparts, data shows a shift did take place.

The Great Resignation in Europe — Statistics  

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• The Netherlands: According to the Dutch Central Bureau of Statistics (CBS) the number of people in the Netherlands who changed jobs in 2021 and early 2022 significantly increased. In the first quarter of 2022, a total of 1.9 million people indicated they had started a new job that year.  That’s 400,000 more than in the first quarter of 2021. The number of people starting their own businesses or becoming freelancers also rose (in the third quarter of 2022, 1.2 million people in the Netherlands were working freelance, an increase of 127,000 compared to the year before).
• The UK: In the third quarter of 2022, approximately 365,000 resignations took place in the United Kingdom, and even more in the second quarter of 2022 when 442,000 people left their jobs. That is historically the highest number of resignations taking place in over a decade.
• Germany: Europe’s largest economy also showed signs of The Great Resignation. According to an IFO Institute survey, one-third of all German companies struggled with a lack of skilled workers as they gradually saw many of their best people leave. Gallup’s annual German workplace study showed a record number of employees looking for new jobs, and 4 in 10 said they would stop working entirely if they could afford it, which is 25% more than in 2016.
• France: At the end of 2021 and the beginning of 2022, the number of resignations reached a historically high level in France, with nearly 520,000 resignations per quarter, including 470,000 resignations from permanent contracts.
• Europe in general: As seen in the graph below, Europe saw a rise in job vacancies throughout 2022 and 2023 compared to before the pandemic: 2.9 % of jobs in the EU and 3.1 % of jobs in the Euro area were vacant in the third quarter of 2022. With 5%, Austria had the highest percentage of vacant positions, followed by Belgium and the Netherlands (both 4.9 %). 

Why did so many quit their jobs?

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With shorter working hours, longer holidays, stronger support from the government, and better (un)employment benefits compared to their American peers, why did so many Europeans also quit their jobs? It turns out the reasons Americans and Europeans decided to exit are very similar.

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•  The world changed

During the pandemic, the world changed. There were quarantines, lockdowns, and health scares, and many people started working from home for extended periods. This time of introspection led employees across the United States and Europe to realize what’s important to them in the workplace. Many decided they no longer wanted to work a job they weren’t passionate about and switched to an employer that offered more opportunities for growth, purpose, and a healthy work-life balance.

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• High levels of burnout

One of the main drivers of the Great Resignation in Europe was the high levels of burnout many people experienced. According to recent statistics, this is a major problem globally, with up to 50% of workers reporting feeling burned out at work. Experts say it’s one of the after-effects of the pandemic, with the healthcare industry hit especially hard. Others point their fingers to the increasing use of technology, which has made it harder for people to disconnect from work, leading to an “always on” culture that can contribute to burnout. The root causes of burnout are complex and highly dependent on personal circumstances, but these factors have undoubtedly contributed to the high number of people quitting their jobs in search of more fulfilling and less stressful work environments.

A 2022 study by Statista found that Poland topped the list for burnout, with 70% of those surveyed admitting to feeling burnt out or on the verge of it. Romania was second with 67%, and France and Germany came in at the bottom of the list. However, they still reported significant burnout levels of 51 and 50%. 

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• The hidden resignation

The Great Resignation was also fueled by a growing sense of disillusionment among younger employees in Europe. Many millennials and Gen Z felt their jobs could be more meaningful and rewarding and that they were not fairly compensated or appreciated for their work. This led to a rise in the so-called “hidden resignation” wave, where people remain in their jobs but are disengaged and unproductive. This can be even more damaging to organizations than overt resignation, as it can lead to a drop in productivity and morale, as well as a decline in customer satisfaction. This phenomenon gained momentum on social media in 2022, as the hashtag  #quietquitting started trending.

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• A lack of employee engagement

For more than ten years, European countries have topped the list of happiest places on Earth. In the 2022 World Happiness Report, Finland held the number one position, closely followed by Denmark in second place. The Netherlands, Switzerland, Luxembourg, Sweden, and Norway were also in the top ten. While this implies that quality of life in Europe is high overall, that isn’t always true in the workplace. According to Gallup’s State of the Global Workplace Report, Europe ranked low in terms of employee engagement. While the US and Canada saw 33% employee engagement, Europe scored a mere average of 14% — meaning Europeans were unhappier in their workplace than anyone else in the world.

Here are some of the main reasons people reported for wanting to leave:

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• 34% of respondents said they’re not happy with their work-life balance
• 23% stated their current employer didn’t offer them enough career development options
• 17% didn't feel appreciated at work and felt they deserved better
• 17% considered a complete change of industry or job role
• 14% blamed “bad management” as the reason to quit and were confident they could find a company that fosters better leadership styles

The costs of the Great Resignation 2023 and the significant shifts in the labor market were high. For example, Gallup estimated that replacing exiting workers cost one-half to two times the employee’s annual salary.

What’s the outlook for 2024? 

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As we move into 2024, the narrative around the Great Resignation is evolving into what some are calling the “Big Stay." This shift indicates a stabilization in the labor market with reduced resignation rates and a heightened focus on employee retention and satisfaction. So what’s causing employees to settle into their jobs for longer terms?

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• Wage increases are leveling out. The Great Resignation created competitive pressure among companies needing to attract new talent, but wage growth is beginning to stabilize with most increases due to inflation and the need to balance out the cost of living. Without the promise of higher pay, many employees don’t have the desire to switch jobs.
• Companies are enhancing their internal culture and growth opportunities. This approach helps in retaining talent and attracts new employees who prioritize personal development and well-being in their workplace.
• Flexible work arrangements are increasingly available. Companies are offering more flexible, hybrid, and remote work options to encourage employees to stay in their current jobs. A recent Forbes study shows that flexible hours is the number one desire of those surveyed with 98% of workers stating they want to work remotely at least part-time.

• Uncertain economic outlook. The global economic landscape remains unpredictable. While it's true that some sectors are recovering, the general uncertainty may lead employees to be more cautious and stay in their current roles until they have something more secure lined up.

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Overall, while the Great Resignation marked a significant shift in the job market dynamics during the post-pandemic years, 2024 looks to be the year of the "Big Stay," where both employers and employees seek to create more satisfying work relationships. The focus has shifted from mere job switching to building workplaces where people can thrive and find long-term satisfaction.

How can we prevent another Great Resignation?

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Keeping employees longer can reduce costs associated with high turnover, protect organizations’ reputations, and boost productivity through the development of experienced, engaged teams. Leaders need to understand the motivations of their employees so they can retain top talent. 

Over the last year, the emphasis among workers has shifted towards valuing work-life balance, job stability, and meaningful employment. This change highlights a critical dynamic shift between employees and employers, which can be positive as long as organizations take action to meet some of these needs with the following steps:

• Improve working conditions: Organizations can work to create a more positive and supportive work environment, including better support for work-life balance, more opportunities for development and career progression, and more effective communication and feedback.
• Address burnout: Employers can also take steps to prevent burnout by reducing workloads, providing more resources and support, and promoting a culture of self-care and belonging.
• Foster employee engagement: Encouraging employees to feel more connected to their work and the organization can help reduce the risk of (hidden) resignation and improve productivity.
• Offer fair compensation: Ensuring workers are rewarded for their work can also help reduce the risk of high turnover, as people are more likely to stay in their jobs if they feel they are being fairly compensated.
• Help employees acquire new skills: One of the main reasons people leave is a lack of professional development. By allowing employees to be less constrained by job roles and expand their skills, employers will be better able to retain their best talent while staying on top of the ever-changing world of work.

At Lepaya, we help organizations build stronger teams by offering innovative learning experiences through our Power Skills training. Request a demo to learn more.

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