The great resignation: Fact or fairytale?

The “great resignation” can mean a lot of things, from an exodus of exhausted parents from the workforce, to a widespread ideological movement of adults away from jobs they find meaningless, problematic, or inflexible, and into… something else, as yet unclear.

But is it actually happening?

Since the term was coined in May 2021 by Anthony Klotz, associate professor at Mays Business School, Texas A&M University, its use in the media has skyrocketed. A search on Lexis Nexis, which collates media mentions, reveals 5,493 uses of the term in newspapers, newswires, press releases, and blogs since it first came into being.

Yet for those seeking to move jobs, or unhappy in their current role, jumping into the void might still feel daunting, even impossible. Desperate to find meaning in the chaos of covid, are we just parroting a fictitious narrative of coherence when we talk about a “great resignation?” And can data help us see more clearly?

The main data point cited in support of the great resignation narrative is the US quits rate, which reached an all-time high of 3% in September 2021, and has since dropped slightly. The trajectory of that index, produced by the US Bureau of Labor Statistics, looks like this:

There are several things to note. First, 2021 does indeed represent an all-time high quit rate, but it’s still only 3%. An average of three in 100 people quit their jobs that month, and they didn’t all drop out of the workforce.

Second, the quit line has been trending upwards since a low of 1.2% in post-financial-crisis September 2009, as the economy has strengthened. There was a notable dip during the early pandemic and then, arguably, a surge of pent-up quitting once economies started to re-open. Third, as business school lecturer Jay L Zagorsky points out in The Conversation, these data have only been collected since December 2000.

Zagorsky also notes that some sectors, like hospitality, have much higher quit rates than others, which is pushing up the average.

There are other data that support the idea that a lot more people than normal are leaving their jobs—but mostly in the US, and even there it’s by no means cut-and-dried. The Economist points out that there’s more evidence in the UK and the US, but elsewhere the data don’t support the narrative. The new Economics Observatory says even in the UK, the evidence is thin. It points out that although UK quit rates were rising in the fall of 2021, that’s normal for the season.

Job vacancies are high in both the US and UK, meaning that people who do quit might be better able to find a new job—depending on their sector. But it doesn’t mean they are quitting.

One way of gauging how seriously company leaders are taking a trend is how much they mention it in earnings calls. This doesn’t mean they agree with it, but could be a useful barometer of how much it’s on their minds.

According to a search of earnings call transcripts on Sentieo, no one mentioned the phrase “great resignation” until July 2021. Mentions reached a high in November 2021, when the phrase came up in 71 transcripts. (It may also have come up multiple times in those calls, but Sentieo only provides the number of documents the phrase has been used in, not how many times it’s been used.)

Looking at the uses of the phrase in the transcripts themselves, CEOs and other leaders are often saying that the “so-called” great resignation, in their words, is not affecting their business specifically; rather, they might be hearing about it in the media.

The Economics Observatory writes of the UK: “It may be that as the economy opens up, with the renewed push to end home working in early 2022, that there will be a new chapter of great resignations.” But, it says, there isn’t enough evidence right now to support a “good story.”

If the US quit rate doesn’t rise any higher, we might have to abandon the notion that the great resignation is happening even there, and look for another interpretation of the confusing times through which we’re living.