Will The Great Resignation Lead to The Great Competition?

The Great Resignation Is an Opportunity for Freelancers

A record number of U.S. workers quit their job during the pandemic. This phenomenon has since come to be called The Great Resignation. As more workers seek remote and hybrid employment, how will it impact online freelancers? Is this the beginning of The Great Competition?

The Great Resignation is, indeed, perplexing. Based on the averages for the first three quarters of 2019 and 2020, 9.6 million employees lost their jobs. Even so, U.S. workers are quitting in record numbers. For example, between April to September 2021, 24 million people tendered their resignations.

The economic cost of employees leaving can be high for some businesses. Instead of using their resources for core activities, they have to hire new employees. Furthermore, they have to spend more time during the onboarding and training process.

Companies need to fill the gap, and they can do that by assigning more tasks to other employees. Although temporary, the added responsibilities may not sit well with some people. Besides the economic cost and hampered operation, the disruption also affects workplace dynamics.

On the plus side, The Great Resignation may present opportunities for online freelancers. But at the same time, they could be facing stiff competition too.

The Great Resignation Phenomenon

Anthony Klotz is a Texas A&M University Mays Business School’s Associate Professor of Management. He is also an Anderson Clayton Professor of Business Administration. During an interview with Bloomberg, he coined “The Great Resignation” (Cohen).

“When there’s uncertainty, people stay put,” Klotz explained. “So, there are pent-up resignations that didn’t happen over the past year.”

But the COVID-19 crisis brought about many pandemic-related epiphanies. And people quit their jobs in record numbers. In September 2021 alone, the quit rate reached 3% (“Job Openings and Labor Turnover Survey”). That is 4.4 million U.S. workers quitting their jobs.

With millions of employees losing their job during the pandemic, one would think they would hold on to their jobs. Instead, 2021 became the year U.S. workers quit their jobs at historic rates. Klotz called it The Great Resignation, and other economists called it The Big Quit.

Who Is Quitting Their Jobs?

As of the last working day of December 2021, there were 10.9 million job openings. And that is despite 6.9 million unemployed people as of November – the previous month. No doubt The Great Resignation accounted for staggering numbers.

Generally, the highest quit rate occurred among employees aged 30-45 years. Compared to previous years, the average rates for 2020 and 2021 increased by 20%. Likewise, the resignation rates in the 25-30 and 45+ age groups also increased but not as much.

The rate decreased for the 20-25 age group, juxtaposing the usually high turnover rate. One plausible reason is the reduced demand for entry-level workers.

As the pandemic rages on, companies adapted by having employees work from home. And they also prefer hiring mid-career employees.

Table 1. Hiring preference of employers with regards to experience

Hiring Preference

2017

2016

2015

2014

2013

Candidates have relevant work experience

64.5%

64.2%

72.5%

74.1%

71.0%

Candidates with any type of work experience

26.1%

27.0%

20.1%

20.7%

19.9%

Work experience is not usually a factor

5.1%

6.3%

3.9%

1.1%

4.8%

Other

4.3%

2.5%

3.4%

4.0%

4.3%

(“Employers Prefer Candidates with Work Experience”)

Hiring experienced workers is cost-effective for companies. One reason is that they spend fewer resources on training. In some cases, the new employees would possess advanced knowledge or skills to help the company grow.

For those in the 25-45 age group, the preference for mid-career employees is an opportunity. But that also means fewer opportunities for the 20-25 age group. And that is why most of them stayed working for the same company.

Before COVID-19 became a pandemic, the world watched in horror as the virus wreaked havoc in Wuhan. Over the following months, the U.S. was severely affected. Hence, fear and the realization of mortality may have led many to rethink their life and work goals.

Consider employees who have been thinking of quitting for some time already too. Some left for the proverbial “greener pasture.” Others, though, reached a breaking point. For example, these employees struggled with high workloads or unappreciative managers. The pandemic became the catalyst that led them to take a break from work.

Why Are Employees Quitting?

Individual circumstances vary. Nonetheless, there must be underlying reasons for The Great Resignation.

Among the most common themes and theories are:

  • The pandemic made people think and reevaluate their life priorities. Many of those who quit thought leaving their company leads to a better work-life balance.
  • Some employees were “burned out” and undergoing tremendous stress, even before the pandemic. The psychological shift caused by the scourge led many of them to leave.
  • Some employers were not flexible in work arrangements. Requiring their employees to return to on-site work did not sit well with some. As a result, some of them decided to quit.
  • Millions of people may have lost their jobs, but there were opportunities too. Low-wage workers, for instance, switched to better-paying jobs. Even if some of the jobs were risky, there were still takers.
  • The traditional reasons for switching jobs remain. Employees change employers if they can receive better compensation or career advancement opportunities.
  • Some employees did not feel that their company was responsible enough. During the pandemic, some companies mistreat them or their customers. Because of that, they chose to leave.

Pew Research Center can also shed some light (Parker and Horowitz). On Feb. 7-13, 2022, they surveyed thousands of non-retired American adults, and the results are:

Top Reasons Why US Workers Left a Job in 2021

Which U.S. Industries Have the Highest Quit Rates?

The Great Resignation peaked in December 2021. According to the U.S. Bureau of Labor Statistics (BLS), the following industries have the highest quit rates.

Industry or Sector

Quit Rate

Accommodation and food services under leisure and hospitality

6.1%

Retail trade under trade, transportation, and utilities

4.9%

Arts, entertainment, and recreation under leisure and hospitality

3.7%

Professional and business services

3.6%

Transportation, warehousing, and utilities under trade, transportation, and utilities

2.6%

Healthcare and social assistance under education and health services

2.5%

Construction

2.4%

Non-durable goods under manufacturing

3.1%

Real estate, rental, and leasing under financial activities

2.2%

Information; durable goods under manufacturing

2.1%

The heaviest sector hit was Leisure and Hospitality, with an average quit rate of 5.8%. Only one other industry exceeded that rate – trade, transportation, and utilities, which had a quit rate of 3.8%.

The Great Competition

Google search revealed that “The Great Competition” is anything but related to employees. But I did coin this term, thinking of The Great Resignation and its impact on employers and employees.

Businesses would want to keep their employees and prevent disruptions as much as possible. But more than that, they have to spend time and money recruiting and training new hires.

The Great Resignation, though, can also be an advantage. An example would be companies scaling their operations. When hiring more people becomes necessary, they have a larger pool of experienced candidates.

And that brings me to The Great Competition.

Most people leaving their jobs would also be looking for new and better jobs. In other words, applicants would have to compete with more people. As mentioned earlier, too, companies prefer mid-career employees. It may be more challenging for some people to secure a job when others have better credentials.

Are There More Employees Preferring to Work from Home?

One can say that the online freelancing industry, where people primarily work from home, grew during the pandemic. It was the only option in many countries when their economies locked down. And having tasted the home-based setup, many traditional employees now prefer to work under such arrangements.

Already, the number of people who prefer flexible working arrangements has risen. Envoy, a company that provides tools to improve workplace management, recently conducted a survey that showed (Smith):

  • 48% of 1,000 respondents prefer to work remotely on some days and from the office on other days
  • 41% are willing to take a hybrid work model job even if the salary is lower.
  • Up to 47% of employees will leave their job if the company does not offer a hybrid work model after the pandemic.

Gallup’s survey also showed a similar trend (Saad and Wigert):

  • Among employees working from home full-time, 49% prefer remaining fully remote, while 45% prefer a hybrid work model.
  • 70% of employees working from home prefer a hybrid work model. 15% of them would want to work remotely full-time, while 15% prefer in-person.
  • Among employees working on-site, 37% prefer hybrid, while 11% prefer working from home full-time. 52%, meanwhile, are open to continuing working on-site.

Recent trends show that the work model is one of the drivers of The Great Resignation. More people quitting traditional jobs means more people are searching and applying for hybrid or remote positions. Under this circumstance, the only logical conclusion is that online jobs have become more competitive.

What Is the Impact of The Great Resignation on Freelancers?

There were indeed more freelancers in the market during the pandemic when businesses closed. The Great Resignation further increased that number. Based on the trends, the number will remain higher post-pandemic than pre-pandemic.

Instead of getting stressed, freelancers should focus on personal development and enhancing their skills. Besides, The Great Competition (as I dubbed it) may not even be a genuine concern. Quite possibly, The Great Resignation may turn into The Great Regret.

In early 2022, The Muse conducted a survey involving 2,500 respondents (Tomb). One of the most significant results was that 72% said they experienced “Shift Shock.” Kathryn Minshew, The Muse co-founder/CEO, described shift shock as the feeling of the discrepancy between expectations and the reality of a new job.

In essence, 7 out of 10 U.S. employees realized that the new job was not what the new company led them to believe. Nearly half also mentioned that they would want to return to their old company if they experienced a shift shock.

It is reasonable to believe that many of the people who quit during The Great Resignation now realize the grass is not greener on the other side. While the sheer number of traditional job quitters is astonishingly high, competition in securing online gigs may not be as fierce as feared by some freelancers.

The Great Resignation Could Be The Great Opportunity

People generally tend to focus on the negative. Psychologists call this tendency negativity bias. Such being the case, many see problems instead of opportunities.

The Great Resignation is one example. Because many people lost their job (voluntary or otherwise), the number of online freelancers increased. Now, someone may view this negatively and easily disheartened by the difficulty of securing a gig.

On the other hand, companies in the U.S. are having difficulties filling positions. Ten million job openings, but where are the employees?

The pandemic changed the way businesses operate. Many companies had to revise their business model and shift to digital platforms. Some of them also now realize the benefits of hiring offshore workers. Because of that, the reasonable expectation is that there will be more positions open for online freelancers.

So, what should online freelancers do?

Stop thinking about The Great Competition. Focus on enhancing your skills, acquiring more knowledge, and taking advantage of The Great Opportunity.

Sources and Further Reading

Cohen, Arianne. “How to Quit Your Job in the Great Post-Pandemic Resignation Boom.Bloomberg, 10 May 2021. Accessed 22 Mar. 2022.

Employers Prefer Candidates with Work Experience.National Association of Colleges and Employers, 5 Apr. 2017. Accessed 23 Mar. 2022.

Job Openings and Labor Turnover Survey News Release – 2021 M09 Results.U.S. Bureau of Labor and Statistics, 12 Nov. 2021. Accessed 22 Mar. 2022.

Parker, Kim, and Juliana Menasce Horowitz. “Majority of Workers Who Quit a Job in 2021 Cite Low Pay, No Opportunities for Advancement, Feeling Disrespected.Pew Research Center, 9 Mar. 2022. Accessed 23 Mar. 2022.

Saad, Lydia, and Ben Wigert. “Remote Work Persisting and Trending Permanent.Gallup, 13 Oct. 2021. Accessed 23 Mar. 2022.

Smith, Jillian. “Envoy Survey Finds Employees Want Companies to Embrace Hybrid Work, Mandate COVID Vaccines.Envoy, 16 Mar. 2021. Accessed 23 Mar. 2022.

Tomb, Devin. “72% of Muse Survey Respondents Say They’ve Experienced ‘Shift Shock.’The Muse, Mar. 2022.

ROBERT LEE

I write articles that people actually read and Google loves.

No Comments Yet

Leave a Reply

Your email address will not be published.

©2022 by The Filipino Writer. All Rights Reserved.