- Anthony Klotz, a psychologist and professor at Texas A&M, came up with the term “Great Resignation.”
- He told Insider that events like the pandemic make people step back and rethink their lives.
- In some cases, that can cause people to change up careers – and companies will have to adjust.
- See more stories on Insider’s business page.
For four months in a row – a third of the year – a record number of Americans quit their jobs.
It’s like nothing else we’ve seen in two decades. So when organizational psychologist Anthony Klotz coined the phrase “the Great Resignation,” it resonated across the workforce – and media. He said it took off after he was quoted by Bloomberg Businessweek on how to quit your job.
“I don’t know why I used the word ‘great’ and called it ‘the Great Resignation,'” he told Insider of his interview with Bloomberg, but said he had been using that phrase at home, when he was talking to his wife about what would happen to workers.
Klotz, an associate professor of management at May Business School at Texas A&M University, said he anticipated that it would be a huge resignation wave based on a few different things. First, not a lot of people quit their jobs during the pandemic; in August, Glassdoor economist Daniel Zhao told Insider that there were still 3.7 million “missing quits.” That basically means that, if not for the pandemic, 3.7 million more people would have quit their jobs by then.
So, probably a lot of people who wanted to quit just hadn’t yet; as Klotz anticipated, a rush of quits might be making up that deficit. Burnout, too, is weighing on many, especially in service jobs. Workers in the service industry have been leaving en masse, prompting employers to hike wages, benefits, and get rid of tips.
He was right: In July, the last month for which the Bureau of Labor Statistics published data, 3.98 million workers quit; that’s slightly lower than the record-smashing 3.99 million quits in April.
The profound element to the Great Resignation
It’s more than just “missing quits,” though. It’s an understatement to say that the past 18 months have changed how some people think about life, work, and what they want out of both.
Given work’s elevated place in American culture, Klotz said he knew the existential crisis of business was bound to lead to an existential crisis for workers.
“Especially in the United States, who we are as an employee and as a worker is very central to who we are as people,” Klotz said. But whether you were yanked from the office, or laid off, or experiencing burnout, you may have felt more removed from work – and able to try out “other elements” of life more.
“From organizational research, we know that when human beings come into contact with death and illness in their lives, it causes them to take a step back and ask existential questions,” Klotz said. “Like, what gives me purpose and happiness in life, and does that match up with how I’m spending my right now? So, in many cases, those reflections will lead to life pivots.”
Stories abound of workers taking the leap into new careers, or following their passions. For instance, Insider’s Phil Rosen profiled Dane Drewis, who left behind his job in finance to make music a full-time job. Respondents to an Insider survey that asked “Which of the following would attract you most in a job offer or incentivize expanding your job search?” ranked higher wages and remote flexibility the highest.
Employers, take note
This should create a moment of reflection for employers, according to Klotz.
“I think we are entering a period of time where companies are trying to figure out, ‘Who are we in this new world of work? What kind of schedule do we want to give our employees?'” Klotz said.
Economists have told Insider that current labor shortages might be due to employers not offering enough – whether in wages, benefits, or working conditions – to win back workers.
That marks a break from recent historical work trends. For five decades, wages have been declining. The increasing switch over to an independent contractor model and gig work leave many without benefits. The US still doesn’t mandate paid leave, and workers are at the mercy of their employers on whether they’ll get time off for everything from pregnancies to COVID-19 vaccines paid.
But one lingering question is how long the Great Resignation will stick around, or if it will ever end.
“Is this just a permanently raised rate of resignation? Or is it an inflection point, and we get back to normal?” Klotz said. “I think a lot of that’s going to depend on what we learn about who is quitting, why they are quitting, and how companies respond.”
He added: “One hopefully silver lining of this horrible pandemic would be if the world of work transitioned to a more healthy, sustainable place for employee wellbeing.”