Why employees quit. Explanations behind the market shift

Staff turnover has been increasing in markets all over the world. This economic shift has been particularly pronounced in the US, since the extensive availability of the COVID-19 vaccination program has led to a decrease in covid-related laydowns and shutdowns.

Seemingly, this reclaimed safety for employees, alongside the very real and continuous safety concerns related to the pandemic, have contributed to many deciding to leave their jobs – flipping the tables on their employers.1

Career Management English

2021.05.24

Local HR Development Strategies of Japanese Companies in Germany

https://career-management.de/en/blog/local-hr-development-strategies/2437/

When the Japanese economy swept over the world market and many Japanese companies expanded overseas, plenty of papers addressed the topic of Japanese management policies - many favorably. However, among these, some critical opinions were also expressed, one such regarding the topic of the development of host-country nationals (HCN) in Japanese multinational companies. In "New challenges for Japanese multinationals", Bartlett and Yoshihara, professors at Harvard and Kobe Universit...

The Increasing Staff Turnover

This movement is not, however, limited to the US market. In fact, in Germany, the willingness to change jobs is even higher than in the US; compared to 10 percent of the polled US workers who claimed to be on the active search for a new position, 14 percent of German employees are in active pursuit of a job change.2 Furthermore, out of the employees polled, 23 percent of the German workers plan on leaving their current workplace within the year – and a whopping 42 percent announced that they wish to leave within the upcoming 3 years (Gallup Engagement Index 2022).

This trend can also be seen in the sheer amount of open positions in Germany (which has been on the rise for quite some time now). The term “the Great Resignation“ describes the movement and trend itself, and was coined by Anthony Klotz. Klotz states that due to uncertain times there are “[…]pent-up resignations that didn’t happen over the past year.” (How to Quit Your Job in the Great Post-Pandemic Resignation Boom). Accordingly, the Great Resignation is a large movement; affects positions of all pay grades, and is not simply limited to low-income jobs.3

The stock of registered job vacancies¹ in Germany from July 2020 to July 2022: Mehr Statistiken finden Sie bei Statista

However, as noted by the Harvard Business Reviews, when observing the cumulative number of monthly resignations in the US from the year 2009 to 2021, one can see that these resignations have been increasing every year since 2009. It can thus be argued that the rise of resignations is not necessarily or exclusively linked to the pandemic. Instead, some additional factors that contribute to a higher number of people leaving their jobs may include retirement or relocation purposes, etcetera. However, those reasons alone are not sufficient to explain this wide-ranging phenomenon.4

Since we stand at the junction of two counterparts, (namely; the employers and the potential employees) it is of interest to us to discuss why so many employees are feeling ready to leave their current workplaces – and what this may entail for the individuals as well as the job market.

Reasons for Quitting

Employees all around the globe have provided several reasons as to why they wish to resign, and while some cases might be quite unique – certain causes and motives are recurring.

Reconsideration of one’s work-life balance

Some researchers have suggested that people witnessing others within their own social environment falling seriously ill, perhaps even dying, from contracting Covid-19, may reevaluate the significance they assign to work in their own lives. Especially those in high-demanding jobs tend to nowadays question whether the stress and time invested in their work is actually worth it – or if they should settle for a less demanding job in order to maintain a healthy work-life balance. This might be a consequence of society becoming more sensitive and responsive towards mental health issues such as depression and occupational burnout. Particularly affected groups are frontline workers, caregivers, and people in positions that come with a high amount of responsibility. Moreover, occupational burnout seems to be especially common amongst younger workers in fields such as consulting and finance.

Working from Home

Due to social distancing rules and methods imposed by governments around the globe, the pandemic has forced a multitude of employers to offer their employees the possibility to work from home. Consequently, many office workers have come to appreciate the benefits of remote work. Most employees tend to list saving time and money on commutes, the flexibility to customise their schedules according to their personal needs, and the increased interaction with people and pets living with them, as advantages of working from home – making it a preferred alternative to an office setting and the entailed everyday commute.

Additionally, many people are feeling uncomfortable returning to their office as the physical proximity to their colleagues heightens the probability of contracting viruses. In fact, plenty of workers have reported that they are not willing to give up the previously mentioned benefits in favour of travelling to the office everyday – ever again.5 Thus, the reluctance to commute, and the risk of contracting Covid-19, have resulted in a heightened readiness amongst employees to resign if their bosses insist on a return to the office, or alternatively, deny them a hybrid option. Therefore, whether the company is willing to provide workplace flexibility is now linked to how attractive a company is perceived as a place to work by job seekers as well as current employees.

Weakened Bond

Employees have started to feel less of an emotional bond towards their employers. This trend is especially profound in Germany, where 69 percent of polled employees report that they feel a minor emotional connection to their place of work. Furthermore, 14 percent claim that they feel no such bond to their workplace whatsoever. This is quite clearly problematic for employers, seeing as having a high emotional affiliation to the employer has been linked to employees being less inclined to pursue a change of jobs.

In the cases where employees feel less of an emotional connection to their employers, workers oftentimes complain about the lack of respect from their superiors, or simply the lack of advancement opportunities. At times, the only way to receive a pay raise is by changing jobs.6 Additionally, the incentive of a higher income might be impactful amidst the rising costs of living. Inflation, with the entailed increased grocery-, gas-, and electricity prices, might prompt workers to consider ways to increase their incomes.

Collective Movement

The motivation to change is considered to be of a contagious nature. One employee leaving may lead to others wondering why they chose to do so – the reasons behind such a big decision must be of great significance. Consequently, this may lead to colleagues thinking about their own status at the company. Dissatisfaction with the workplace is in fact not only something that applies to a single employee, but might be a collective feeling throughout the company. If it turns out that said employee’s resignation proves to be a change for the better – it might inspire others around them to take the same risk.

Albert Hirschman proposed the theory of the tunnel effect already in 1973, which explains how positive changes in some can bring an optimistic outlook to another about their own situation. Accordingly, the resignations of a few employees can trigger a chain reaction, which, in turn, can be boosted by other contributing factors. Furthermore, the fact that such a large number of workers are leaving their workplaces at the same time might also increase the leverage workers have on potential employers, and thus empower even more employees to use this power shift to their own advantage. 7 8 9

Basically, if there is nothing holding the workers from leaving their current workplace, employees may show less restraint before, inevitably, submitting their resignations. This, coupled with the fact that uncertain times have led to pent-up resignations waiting to happen, will (and is perhaps already) lead to a chain-reaction that in the end could enable a power shift – benefitting employees and job seekers.

Career Management English

2022.01.31