• Research estimates up to 60 per cent of Australian workers could consider changing jobs, predicting the Great Resignation will ramp up in Australia in March 2022.
• The sectors experiencing significant skills shortages include hospitality, retail, IT, marketing, knowledge works, engineering and construction.
• Work-life balance remains the top motivation for Australians to seek a new job.

The Great Resignation, a buzz phrase that embedded itself in corporate lexicon during the 2021, has taken on a more urgent tone as the future of work comes into sharp focus for employees and organisations.

After studying the exits of hundreds of workers, Texas A&M University associate professor of management Anthony Klotz coined the phrase in late 2020, forecasting The Great Resignation was likely to occur as people turned their back on traditional working arrangements.

‘When there’s uncertainty, people tend to stay put, so there are pent-up resignations that didn’t happen over the past year,’ he warned at the time.

But pandemic-related epiphanies around family time, remote work, commuting, passion projects, life and death were expected to multiply the numbers of people resigning, as they shunned long commutes and traditional Monday to Friday office hours.

Similar to the US, during the pandemic Australia experienced the lowest employee turnover since the Australian Bureau of Statistics (ABS) started tracking labour mobility in 1972.

ABS data shows 7.5 per cent of Australian workers changed jobs in the year to February 2021 compared to the long-term average of 15 per cent. Meanwhile, border closures coupled with a reluctance for workers to change jobs in an uncertain market has led to have a record high number of job vacancies that haven’t been filled.

While there’s some trepidation among CEOs and executives about whether The Great Resignation is merely a US-based trend that’s unlikely to materialise in Australia, research and surveys suggest voluntary employee turnover is already gathering momentum.

Will everyone just quit?

No. Plenty of employees don’t really want to resign, Dr Klotz says of his US studies. If their employer would let them keep working from home or do fewer hours, they would stay put.

Surveys conducted by both LinkedIn and Microsoft’s global workforce in 2021 describe the trend more as a ‘disruption’ or ‘reshuffle’ as employees wanted to continue the flexible working conditions introduced during the pandemic.

A PwC survey of 1,800 workers, titled ‘What Workers Want’, found 38 per cent are looking for a new job. Similarly, a September 2021 survey of 1,000 people by HR platform Employment Hero, found 48 per cent of Australian workers planned to look for a new job in the next six months.

On the flip side, PwC research also revealed a significant portion of the workforce (55 per cent) had every intention of remaining with their current employer.

The Australian HR Institute is regularly polling its members for up-to-date voluntary turnover trends, CEO Sarah McCann-Bartlett says, with data for the 12 months to November 2021 showing voluntary turnover is already increasing.

‘It should be noted that the higher turnover now and in the short to medium term will also be a reflection of lower voluntary turnover during the pandemic when employees stayed put due to economic uncertainty,’ she said.

‘The lack of skilled immigration has created skills shortages, and this in itself will have created more job openings. And reports of higher salaries and signing bonuses will be incentivising employees to test the market, even if they hadn’t considered leaving previously.’

Responding to The Australian’s annual CEO survey, Aware Super CEO Deanne Stewart said flexibility has long been a core part the organisation’s employee proposition. Post-COVID the organisation — which employs more than 1,000 people around Australia – found more than 95 per cent of employees expect to work at least part of the week in an office.

‘If the last two years have taught us anything, it’s that people who feel engaged in an organisation and aligned to it, are capable of working productively from anywhere, provided their roles are capable of this and not customer facing,’ she said.

‘They are more productive being empowered and trusted to work out what works for them rather than being dictated to from head office. Where a role in our team can be performed from home, we will be encouraging our people to consider how they want to incorporate working from home in their usual working rhythm.

‘Equally we need to be clear about what the role of the office will be — and creating strong attractors for our people to come into the workplace to ensure we don’t lose the power of social connection and can protect our member-centric culture.’

Resignations to occur sooner rather than later

Research from global research and advisory firm Gartner estimates up to 60 per cent of Australian workers could consider changing jobs, predicting the Great Resignation will ramp up in Australia in March 2022 once people receive their Christmas bonuses and recruiting restarts.

AHRI member polling indicates that an upward trend in voluntary turnover is occurring already with anecdotal reports of significant skills shortages and difficulties in attracting qualified candidates.

But Ms Bartlett-McCann said a hiring spike was also likely to occur in 2022, as people opted to change jobs rather than leave the workforce completely.

‘While a small number may be looking for a complete reset, others will be taking a short break to refresh and reconsider before re-joining the workforce, and many will simply be moving to new roles as they change sector, role or employer,’ she said.

‘In the longer term, I expect that voluntary resignation will settle down again, although government forecasts of low unemployment may lead to a higher ongoing rate of voluntary turnover.’

Sectors and skill shortages

Skills shortages are now apparent in a wide range of sectors. Anecdotally, AHRI identifies those sectors experiencing significant skills shortages to include hospitality, retail, IT, marketing, knowledge works, engineering and construction.

Listed property developer Mirvac CEO Susan Lloyd-Hurwitz said sectors rebounding post-lockdown, particularly in the cities, arts and hospitality sectors were the most likely to see high demand for workers.

‘As a result, we think it will be a candidate’s market and we anticipate seeing increased wage growth in 2022,’ she said.

‘Our sector has been running particularly hot, with strong demand for high-quality employees in the industry.’

Aware Super’s Ms Stewart said their internal market research has identified an enormous uplift in the healthcare and education sectors as destinations for career switchers.

‘Certain skills will be in hot demand too, particularly in areas such as digital, tech and projects as so many more companies rush to embrace and enhance their newfound digital capabilities or attempt to transform their organisation, and so pressure on salaries will heighten,’ she said.

Drivers of attrition and attraction

While salary is still important to employees when considering their options, higher wages are not the full story, despite reports of wage hikes, PwC research shows.

Remuneration and reward, working environment, flexibility and automony, wellbeing and career development are the key considerations PwC lists as priorities its ‘Employee Preference Index.’

The Gartner research found work-life balance remains the top motivation for Australians to seek a new job, while the number one driver of attrition is manager quality and the top reason employees reported for leaving their role.

Compensation is now the number three reason why Australians would leave their current employer. Two years ago, compensation did not appear in the top ten reasons for leaving.

Employees are considering a wide range of factors when deciding whether to change employers.  While this includes renumeration, other important factors include flexibility, the role itself, autonomy, personal development, organisational culture, career prospects, and the wider social and community contribution of the organisation.

Preparation the key to success

Gartner HR Behavioural Scientist Aaron McEwan says there is still an opportunity for organisations to get ahead of the problem, by providing clarity to employees on what to expect in 2022.

‘We’re already seeing organisations pilot innovative solutions like four-day work weeks, more flexible working arrangements and more comprehensive leave policies including paternal, miscarriage and menstrual leave,’ Mr McEwan said.

‘Even when an organisation’s policies allow flexibility, the implementation often still comes down to the employee’s direct manager. Workers dissatisfied with their employer’s attitude and policies towards management and flexibility will likely use the holiday period to plan their next career move.’

To protect themselves from the full force of The Great Resignation, and attract the right skills, PwC says organisations must identify what their workers really want and reimagine their Employee Value Proposition (EVP) to deliver on these expectations.

Ms McCann-Bartlett agrees and said organisations and HR departments need to urgently develop strategies that would support their workforce and for employers to better understand what existing employees and new recruits wanted.

‘This will include renumeration, flexibility, the role itself, autonomy, personal development, organisational culture, career prospects, and the wider social and community contribution of the organisation,’ she said.

Organisations that are re-evaluating their EVP should consult with employees about their needs she said and by including them in this process will add to the organisational culture and support engagement.

‘As there is no longer a ‘one size fits all’ EVP for organisations, this means developing a flexible suite of benefits that change as employee needs and priorities change,’ she said.

‘Career and development discussions should be happening between managers and employees on a regular basis. Communication, regular consultation and transparency will help ensure that employees remain engaged, happy and challenged at work.’

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