A roundup of the Reasons to be Cheerful Podcast
In our latest instalment of our roundup of the Reasons to be Cheerful podcast, I take a look at five takeaways from the episode on ‘the real story behind the great resignation’, which has seen record numbers of job vacancies advertised as people leave their roles.
Has Covid really revolutionised the world of work and changed the nature of the relationship between employers and employees? Here’s 5 things we learnt from the latest episode:
1.What is the great resignation?
The great resignation was a term coined in the US to refer to record resignations, referring to the current ongoing trend whereby workers are resigning from their jobs en mass. Joe Fuller from Harvard Business School tells Ed Miliband and Geoff Lloyd that one of the great paradoxes of the great resignation is that while growing numbers of people resign, there is still a declining unemployment rate. That’s because in the US the findings show that people are changing jobs rather than leaving them altogether.
Joe points out that part of the great resignation has also been driven by a higher retirement rate among older workers.
The automation of the job search process has also made it easier for workers to resign. The great resignation is a trend that some economists think is being replicated in the UK.
2. Covid has changed nature of relationship between employers and their workforce
One of the themes this episode on the great resignation explores is how Covid has changed the nature of the relationship between employers and their workforce. Covid, Joe claims, has allowed workers to engage in a sort of ‘great reconsideration’, with people reflecting on the role of work in their lives. This is mainly true of ‘higher skilled workers’ or white collar workers, after employers during the pandemic, publicly at least, prioritised their workers’ health and wellbeing.
The balance of power according to Joe has changed, with employers able to demand more when it comes to their health and wellbeing.
3. What’s driving the great resignation?
According to David Zentler-Munro, an economics lecturer from the University of Essex, there has been something similar when it comes to a pretty big rise in job resignations in the UK.
The driving forces for Zentler-Munro are a big increase in vacancies, while the supply of workers has remained subdued.
Did furlough play a part in allowing people to really think about the future of their careers and lead to a higher number of resignations?
Zentler-Munro says that a rise in resignations has also happened in countries with no furlough schemes, and has been partly driven by an imbalance between demand and supply. A bounce back factor after lockdown so people return to work, however on the supply side we’ve also seen a rise in early retirements among older workers as well as those leaving due to sickness. During the pandemic, among younger workers there was also increased educational enrolment, leading to a fall in supply.
4. Why the disappearance of older workers could be an economic risk
Abigail Adams-Prassl, professor of economics at the University of Oxford, says that although she challenges the idea of the great resignation, a significant factor behind the recent rise in mass resignations is older workers retiring, having increased their savings rates during the pandemic.
Analysis by the Centre for Ageing Better indicates there are now 208,000 fewer over-50s in the UK’s labour market than there were before the pandemic.
What should be of concerns is that while the number of economically inactive people over 55 has increased, so has the number of people describing themselves as “long-term sick”, figures from the ONS show, a factor older people are more likely to cite when they drop out of the workforce.
There are also older workers who want to get back into the labour market but find themselves on the receiving end of age discrimination.
5. The changes in work patterns have mainly been to the advantage of higher wage workers
While the pandemic may have altered the relationship between workers and bosses, it’s primarily higher wage workers who are gaining the benefits rather than those in low-paid, insecure jobs, says Adams-Prassl.
Although more gig economy workers are asserting their ability to assert their own terms, many have not been able to switch jobs so easily as those from higher income brackets the term ‘labour flexibility’ obscures this.
Basit Mahmood is editor of Left Foot Forward
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