Will the Great Resignation Lead to a Big Backfire?
The COVID-19 pandemic changed a lot of things and we learned a lot. Probably what sticks in the majority of people’s minds is the willingness for people to brawl over the last pack of toilet paper.
But it really does go deeper than that. There were a lot of changes at work and many people got to experience working from home which gave them flexibility, more free time, zero time stuck in traffic thanks to no commute and a greater sense of work-life balance. Who doesn’t love being in PJs and getting laundry done all while working?
All of this gave people a taste of something that they aren’t willing to give up so easily. Which has led to what many have coined the Great Resignation. Workers who have been forced back into the office have been quitting in record numbers to find another job that will let them hold on to that flexibility and freedom.
This shift to a digital landscape means that a person in New York can apply for a job in California or even Japan. People are no longer bound by commute or even time zone. And that means you can have the job you want while living where you want–even if it isn’t in the same state or country.
But it’s not just those willing to quit that are making waves. Those who are staying, are demanding pay increases on top of wage hikes that have already been happening. They are also asking for flexibility with hybrid work.
Many have also realized that you don’t have to be tied to only one employer or have the traditional hours of 9 to 5. The gig economy has exploded as people have realized they can work fewer hours for multiple companies and make more than at their old job.
A lot of people have been cheering this on in favor of the worker. The ripples created by this upheaval have created these outcomes:
- Higher salaries
- Increased minimum wage
- Bigger benefits and retention packages
- Expanded paid leave, personal days and sabbaticals
- Flexible hours and locations
- Global access to jobs
- Additional programs/policies to balance inequities in opportunities
- Shifted allegiance from company to the individual
- Empowered resignation and reset
This all sounds great, right? But conversely, it has put many employers between a rock and a hard place as they try to hold on to employees or fill empty spots by offering competitive benefits. There are always consequences to these types of collective decisions.
The Big Backfire
For every action, there is an equal and opposite reaction. Didn’t think you’d be hearing Newton’s third law outside of high school physics class, did you? And even though this isn’t a scientific article about the laws of motion, it truly does apply here as well.
When people leave the workforce, it adds more costs and pressure to those who stay and to the companies who need to continue to operate.
- Those who stick around have to pick up the slack until open positions are filled.
- Employees who stay are faced with increased stress and anxiety.
- Companies are forced to become more efficient with less employees.
- Companies are spending more on hiring that they may not otherwise have had to do.
- Companies are spending more to attract workers with higher wages and benefits.
Think of it this way, would you continue to throw money at a problem like a bandaid on a wound that needs stitches? Or would you want to head over to your local urgent care to get those stitches?
All that money has to come from somewhere. And it will inevitably be passed on to the consumer. Then companies have to deal with lost profits from those who don’t want to pay the higher price for this ripple effect and there will be added stress to hold on to those clients and customers who are willing to pay that higher price. And when a company makes less money from consumers, that can mean reduced jobs. Those loss of profits can increase prices on goods further and many consumers will find this untenable.
We are bound to reach that inflection point where human labor just isn’t cost effective. That leads to automation and finding labor in places where people want the jobs that are available. The technology that enabled this wave could be what destroys us.
So how do we steer this ship to get off the wave that eventually crashes to shore? An obvious solution is for people to stay in their role at a company if they are still contributing something of value. But that’s easier said than done.
But there is a counterpoint to automation. And it’s full of the things that make people different from robots:
Technology is a long way off from providing those truly human elements. The most successful companies will find ways to use automation to enhance their workforce, not replace it. And if you aren’t thinking about this yet, you should be.