The Great Resignation

Millions of knowledge-workers engaged in daily interaction with people globally is a familiar image of the thriving services sector across India.  However, the latest phenomenon – the Great Resignation; wherein employees are resigning at an alarming rate, in search of better opportunities, is threatening the position of India as a leader in the services sector – a sector that has delivered consistent growth over more than two decades. The scramble to manage these employees has acquired urgency, compelling employers to find innovative ways to recruit more and retain them. 

The Great Resignation is a term that was coined in the US during the pandemic, as thousands of employees handed in their notice in search of better-remunerated or more rewarding work. Undoubtedly, we live in an era where more people than ever before are facing a career wobble. The term, The Great Resignation connotes a pure subtraction which means a company’s headcount has reduced. However, the contradistinction of these times is that the businesses are growing fiercely, like never before. Employers are vying to increase the number of workers to manage the heady growth they are now experiencing in the post-pandemic world.

It all began with the onset of the pandemic in March 2020. In the western world, employees started leaving jobs to be self-employed; while several others, altogether dropped out of the labour market. Another common reason for leaving work was either a protracted illness or retirement. While the US offered stimulus packages to protect growth, the UK doled out furlough payments to safeguard jobs. Countries, around the world, are devising strategies to cope with this situation. China’s ‘lie flat’ movement, in which young people turn their backs on the daily grind, is gaining popularity. Japan, known for extended office hours, is contemplating a four-day working week. A recent Microsoft survey found that more than 40% of the global workforce is considering putting in their papers. The reasons for this range from digital burnout amid Covid-19 to an increased sense of isolation.

As organisations in the developed countries lose their employees; the companies have come searching in India, intending to employ thousands in their newly set up shared service centres. They envision replacing their losses in their home countries with more employment being offered to Indians. It is now commonplace for Indian companies to lose employees not to competition but the new fad on the block, the shared service centre. They offer massive salary hikes, diluted responsibility to deliver, and a promise of work-life balance. For once, the power scales seem to be tilting in favour of the employees. Many among them are re-evaluating their priorities, opting for a new work-life balance aided by the spread of work-from-home arrangements.

The world over, businesses are experiencing the Great Resignation in different ways. Starbucks is facing a rapid increase in its wage costs, while McDonald’s described a very challenging staffing environment. One of the biggest employers globally, Amazon had predicted that labour inflation would add USD 2bn to its cost base in the last quarter of 2021 and potentially USD 8bn annually. It is hard for a digitally-driven business such as Amazon to admit that the growth constraint will be ‘labour’ in the foreseeable future and that worker shortages are affecting its productivity and service levels. Back home in India, IT companies are hiring in great numbers, and unsurprisingly, companies such as Cognizant admit that the record number of departures is impacting both business and growth. 

To top it all, the world is witnessing an existential shift in labour markets. In India, the Great Resignation is also referred to as the Great Reshuffle, where people are exploring job change rather than dropping out of the labour market altogether. In September 2021, an Amazon India study discovered that more than 50% of job-seeking adults were looking for opportunities in industries with little or no experience, and nearly 70% were looking to switch industries.

Amidst this churn, it is worth noting that Generation Z seems particularly disaffected. The Microsoft survey showed younger workers were less engaged by their jobs and less eager to bring new ideas to the table. Employers are deploying every trick in the book to retain employees. However, experts believe that investing in the organisation’s core culture is a magnet that could act as a deterrent for exits and doling out money is not the only solution. 

These are difficult days for those who would like to return to business as usual. While there was nothing normal about the Covid era, unfortunately, there is no new normal yet.

Source : Times of India