Resign yourself to the fact that the sparkly new ‘great resignation’ is not a thing

In a typical example of media groupthink, almost overnight “the great resignation” has become a thing.

If there was any doubt about the legitimacy of the meme, any such doubt was put to rest when KPMG partner Bernard Salt wrote an op-ed in The Australian about it, claiming “the effects of fewer skilled immigrants and foreign students, as well as heightened demand for workers in logistics, technology, healthcare and agribusiness, and it’s no surprise that skilled workers are most likely to lead the charge into the great resignation”.

The sudden fear of mass resignations was apparently sparked by a single month’s data in the United States that suggested the resignation rate during August was 2.9% (compared with 2.4% in 2019).

Leaving aside that a single month could be an anomaly (and that the year-on-year growth was barely noticeable anyway), the whole notion of a great resignation makes little sense. Where are all the workers going to go? To a beach in Thailand for the rest of their lives? If anything, we may encounter a short-term “great switch”, but even that is unlikely.

Professor Mark Wooden and Professor Peter Gahan from Melbourne University were far more percipient, observing in The Conversation that not only is there no evidence of a great resignation in Australia, but resignation rates are in fact at an all-time low (only 7.6% of Australians changed jobs in the year to February) and even if people were resigning, it wouldn’t necessarily be a bad thing.

In their desire to fill clickbait-driven column inches, Australia’s intolerably lazy and time-poor media rolled out a yarn based on limited US data while neglecting to undertake the barest of critical thinking.

The US labour market has been a mess for years; weaker labour laws and the growing power of tech have meant shareholders and customers have run roughshod over workers. While many correctly point out the overall anaemic levels of wage growth in Australia, at least there has been some wage growth (minimum wage levels in the US remain at an appalling US$7.25 an hour):

There has been a significant tightening in some areas of the labour market, which like global supply chains have been impacted by pandemic-led border closures and, moreover, rampant money-printing which is finally leading to the long-awaited breakout of inflation.

However, long-awaited wage rises, which in many cases fall far short of general inflation levels, are quite different to a “great resignation”. Instead, businesses that treat employees well — not merely in terms of remuneration, but through career progression, respect and learning — will continue to attract great talent. Those who treat them poorly will naturally struggle to attract and retain outstanding staff.

That is more creative destruction than great resignation.