The ‘great resignation’ is a term used to describe the increasing trend of employees voluntarily resigning from their jobs in huge numbers. Globally, this trend has been increasing since the start of 2021. In Australia, this may be starting to happen too. It is hard to predict why this is happening and what it could mean for Australian businesses. However, this article explores some considerations for your business, including.
- what the great resignation is;
- why it might be happening; and
- what this means for you as an employer.
What is the Great Resignation?
The great resignation, also referred to as the ‘Big Quit’ and the ‘Great Reshuffle’, has many Australian business owners considering what impact this will have on their business.
According to the Australian Bureau of Statistics, during the year ending February 2022:
- 1.3 million people (or 9.5% of employed people) changed jobs, the highest annual job mobility rate since 2012;
- the share of job mobility remained highest for Professionals, 22% of those changed jobs;
- 2.1 million people left or lost a job; and
- the annual retrenchment rate was 1.5%, which was the lowest annual rate on record (since 1972).
Why is This Happening?
The great resignation could be happening for a variety of reasons. For employees, factors influencing their decision to resign include pay, flexibility and mental health.
Pay
As the cost of living rises in Australia, especially in major cities like Sydney and Melbourne, employees are on the lookout for jobs with higher paying wages or salaries.
Notably, the Fair Work Commission (FWC) increased the minimum wage by 5.2% from 1 July 2022. While they are responsible for reviewing the minimum wage and, generally, increasing it every year, some people feel that it is not enough in comparison to the increased cost of living.
Flexibility
It is undeniable that the Covid-19 pandemic has changed the way that businesses operate. Likewise, business owners have learnt that most businesses can still operate with their employees working from home. As such, a huge percentage of employees are looking for greater flexibility in their job.
Flexible work options can include:
- part-time work;
- job sharing;
- working from home; or
- hybrid options.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
Mental Health
The pandemic was a very challenging time for a lot of people, which highlighted the desire for employees to work for a business that supported mental health and work-life balance.
As a business owner, empty words and gestures surrounding your stance on employee wellbeing are not sufficient. To put your words into action, it is recommended that your business introduces policies surrounding health and safety in the workplace. Your business might already have one in place, though it may only cover physical health risks. If that is the case, it might be time to update your policy to include processes for when your employees are feeling mentally burnt out.
For example, your policy might include details on:
- what internal or external processes are in place for an employee to seek mental health support;
- whether your business provides stress leave to employees; and
- how an employee can raise a grievance relating to their mental health at work.
What Does This Mean for Employers?
The great resignation means that employers may need to be creative and competitive to attract and retain employees. Your business might decide to offer:
- higher than average wages for the role or industry;
- greater flexibility within the job or business;
- incentive schemes or equity (e.g. Employee Share Option Plan), or additional discretionary leave entitlements on top of the National Employment Standards.
Key Takeaways
Over the last few years and in light of the pandemic, businesses have changed the way they operate, and employees’ have reevaluated their priorities. As an employer, it is in your best interest to understand and respect the shift in priorities, otherwise, it may be very hard to attract and retain good employees.
For more information about your options in relation to prospective or current employees or employee resignations, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
The ‘great resignation’ is a term used to describe a trend in which we see employees voluntarily resign from their jobs in huge numbers. Globally, we have seen a lot of this starting from the beginning of 2021. In Australia, this may be starting to happen too.
The great resignation could be happening for a variety of reasons; some of these considerations for employees are pay, flexibility and mental health. It is undeniable that the Covid-19 pandemic has resulted in employees reevaluating their priorities.
Employers may need to be competitive in order to attract employees and retain them. This could mean offering higher than average wages for the role or industry, greater flexibility within the job or business, or offering incentive schemes or equity (e.g. ESOP).
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