Is Australia facing ‘Great Resignation’ in workforce like the US?

Highlights

• Workers in the US have resigned at an alarming rate, making way for the “Great Resignation”.
• Some experts in Australia fear that the country may be headed for a similar scenario as seen in the US.
• Though labour force statistics continue to remain strong, they somehow fail to capture industry-wide shifts.

As news broke out about the US facing the ‘Great Resignation’, businesses across the globe became distressed amidst growing fears of an economic slowdown. A record number of Americans have quit their jobs since April 2021, even as the US economy has started showing signs of recovery.

These developments in the US have somehow flagged concerns in the domestic economy on whether a similar pattern could arise in Australia too. Given astounding labour market statistics in Australia, these concerns may fall flat. However, some experts suggest that while workers may not be quitting their jobs, they certainly are reassessing their expectations from their employers.

Also Read: ABS: Payroll jobs pick up in January, but at a slower pace

It is worth noting that the pandemic created shockwaves across all sectors, including the labour market, where several workers lost their jobs. Consequently, many individuals have had to work in companies where they were underpaid or were overqualified for the offered role.

In the given scenario, experts have time and again stated that most Australians are in a phase where they will prefer to shift to a better job as more openings are available now. Reports further suggest that many Aussies are planning to quit their jobs in the coming months.

But the question remains, could this lead to a similar scenario as seen in the US?

Lesser wages and longer leaves

The year 2022 started with the Omicron variant creating turmoil across the globe, prompting many workers to go on long leaves simply to protect themselves from the virus. The latest data from the Australian Bureau of Statistics (ABS) reveals that hours worked dropped 8.8% in January 2022 as many workers took sick or week-long annual leaves.

Also Read: Unemployment rate shows no change in January 2022

Hours worked dropped as individuals resorted to self-imposed restrictions. Meanwhile, many workers raised issues in working alongside unvaccinated staff. However, from a long-term perspective, these factors may subside, and workers might return to work more seamlessly. But things are much different in the US as high attrition rates have contributed to the “Great Resignation” phenomenon.

At the heart of this decline in workforce participation lies a search for a deeper sense of purpose and an overall shift in attitude. Workers are revaluating their jobs from a holistic point of view, possibly due to the volatility caused by the pandemic.

More specifically, the pandemic has taught the world the invaluable lesson that money and power can do little in evading a crisis that gripped medical systems by the throat. Perhaps, people have finally started realising the real meaning of the phrase “seize the moment” and are now looking for opportunities that better justify their interests.

Can Australia survive such a scenario?

If such a widespread decline in labour participation occurs in Australia, the country might be hurt more badly than the US. While domestic data paints a rather exquisite picture of the Australian labour market, some economic pundits fear that the market may be headed in the same direction as the US.

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Additionally, fears loom that such a shock to the workforce can destabilise the existing employment levels and the inter-industry balance. This can directly impact sectors that are currently facing a dearth of skilled workforce. Also, these sectors may face a hit harder than others.

In such precarious times, some small companies have been more successful in attracting the labour force than the big names in the market. Small companies often possess the flexibility to offer additional perks other than the traditional forms of remuneration, such as equity stake.

Thus, there is a growing need among employees to feel confident about their jobs by not being a small fish in a big see. Employees should focus on contributing more elaborately to a company by being involved in its overall growth.

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Bottom Line

While the statistics may not show it, Aussies are currently facing a dilemma about whether to engage in the process of daily monotony or to switch to a more meaningful way of earning their bread and butter. However, if companies recognise this growing need, they are likely to offer their employees a more habitable environment to work in. Thus, while Australia might not be experiencing the Great Resignation, it might certainly be headed towards one if employers do not knuckle down.

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