No end in sight for the ‘Great Resignation’ as inflation pushes workers to seek better-paid jobs

·6-min read
No end in sight for the ‘Great Resignation’ as inflation pushes workers to seek better-paid jobs

Workers are still thinking about quitting their job en masse in Europe and the United States, as inflation and a cost of living crisis are fuelling the post-pandemic phenomenon dubbed the “Great Resignation”.

Over four million American workers have quit their jobs since the post-pandemic recovery started in 2021, a phenomenon that was mirrored on a smaller scale in countries in Europe. In France, the number of resignations reached a record peak in the third quarter of 2021, the highest since 2007. In the United Kingdom, the rate of people moving from job to job was at an all time high between October and December 2021.

The workplace exodus did not decrease as life settled into the new normal, mainly because things around the world did not settle down at all - if anything, new circumstances have added up to the reasons why people are not happy with staying in a job that does not offer them enough.

A recent survey of over 52,000 workers across 44 countries conducted by the accountancy firm PricewaterhouseCoopers (PWC) shows that one in five respondents said they are likely to change employers in the next 12 months, with the majority of those seeking to switch jobs for a better salary.

Why are people quitting their jobs?

While the Great Resignation was initially ascribed to a cultural change in the way workers approached their work-life balance following the pandemic and increased burnout, workers’ motivations seem to have fundamentally changed as the world navigates an ongoing economic crisis.

Soaring inflation and a cost of living crisis triggered by the pandemic and worsened by the war in Ukraine are really weighing down on households across Europe, likely pushing workers to seek jobs that allow them to feel financially secure in times of uncertainty.

PWC’s survey found that more than a third of respondents are planning on asking their employer for a raise. The percentage was even higher in the tech sector, where 44 per cent of workers surveyed said they planned on asking their employer for a wage rise.

Philip Bacon, director of digital marketing company Bacon Marketing, told Euronews his company is witnessing this phenomenon first-hand.

“We are seeing clients lose team members from Eastern Europe who are going after US jobs with better pay,” he told Euronews.

While some companies are trying to keep their employees by adding new perks to the job and increasing salaries, many cannot afford to spend more under the current circumstances.

“Everyone, businesses and employees, are affected by the cost of living crisis sweeping the US and Europe,” David Stone, Chief Executive of recruitment consultant MRL Consulting Group told Euronews.

“Companies are looking at ways of reducing running costs, most notably by getting rid of their physical presence and moving to a remote-working framework.

“Employees are now demanding compensation increases to the tune of 10-20 per cent across multiple industries, and rightly so; they know they’re in demand and they know their worth, they won’t be settling for less anytime soon, especially with record rates of inflation”.

Shifting priorities

But it’s not just about money. Among the top three motivators for looking for a new job, PWC’s survey respondents mentioned looking for a more fulfilling job and finding a workplace where they could truly be themselves.

“As a recruiter, we actually rarely talk about people moving for pay now, it is way more around people being inflexible in working practices, insisting people work from the office,” Alexander Dick, founder of Alexander Lyons Recruitment, told Euronews.

“People are asking questions like, ‘What's your flexible working policy? Does it matter where I'm based in the world? What's your holiday policy? I want more of it,’ all that sort of stuff that historically employees didn't feel that they had, that they thought was reserved for the upper echelons of management”.

Remote work, a pandemic discovery, is also influencing workers’ decision to stay in a company or seek better conditions in another one as they weigh the possibility of flexible working against going back to the office. Half of the respondents to the PWC’s survey said they prioritised a job where they could choose the location they work from.

“The lockdown gave people time to think and reevaluate what’s important to them,” said Stone.

“People no longer want to spend hours commuting, they want more time with their families and more time for themselves. Companies that transitioned to a fully remote or flexible model really resonated with these people. Workers have also become frustrated with the smoke and mirror some companies place around career progression, incentives and commission, moving to competitors who they feel will value them more.”

Employees in the driver’s seat

The discoveries made by many workers during the pandemic - that work does not have to be your life’s focus, that bad bosses don’t deserve your talent and you don’t have to stay stuck in an uninspiring job - remains, but the solution they inspire now seems to include a better consideration of salary expectations.

In Europe, employment is on the rise and at levels higher than before the pandemic. According to Eurostat data, the number of people employed in the EU increased by 0.4 per cent in the first quarter of 2022 compared with the previous quarter, after it had already grown in the third and fourth quarter of the previous year.

The ones who are struggling to retain talent are businesses, Sander van 't Noordende, CEO of recruitment agency Randstad, told Euronews.

“Businesses across the world, including in Europe, are struggling to fill talent gaps. The global pandemic has added to structural skills shortages, causing people to rethink their priorities and make them more willing to ask for what they want out of employers,” he said.

“Despite current economic trends, unemployment remains at record lows and therefore businesses will need to continue to prioritise talent experience to be able to attract and retain staff.”

Rather than people just quitting their jobs, it’s more likely that we will see more people willing to reshuffle around the labour market, change industries and try to climb the career ladder in search of ever-better conditions in what has now been dubbed the “Great Reshuffle”.

“The ‘Great Reshuffle’ is a way better description,” said Dick. “The term ‘Great Resignation’ almost makes it sound like a recession, like everything's going wrong, but it's not going wrong,” the recruiter explained.

“It's just that people aren’t happy to sit there and take nonsense from bosses in their ivory tower anymore. They now want to be treated properly. And if they're not, they will happily find somewhere that does”.

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