These days, you practically need a crystal ball to predict what will happen next in the labor market.
While the Great Resignation may have felt like a once-in-a-lifetime event, as people moved to new jobs at record-high rates, there’s been some speculation that it could happen again, and soon. However, recruitment experts who spoke with HR Brew had varying opinions about whether that may transpire.
For a second Great Resignation to occur, experts agreed that several things would need to happen: Businesses would need access to more capital, allowing for more hiring, and the labor supply would need to tighten, creating more competition for talent. Some experts that spoke with HR Brew said the combination of low employee engagement and workers sitting tight in a slowing economy suggests employers are sitting on a ticking turnover time bomb. Others believe the Great Resignation was too rare an occurrence to repeat itself.
“There’s a lot of dominoes that have to fall to create a Great Resignation 2.0,” Adam Stafford, CEO of recruitment marketing platform Recruitics, told HR Brew.
Let’s dive into what each camp says.
Round two? Some indicators could point to an imminent uptick in mass quits. Workers are generally very dissatisfied with their jobs, and their unhappiness has only worsened in recent months. At the same time, employees are staying put at their jobs, citing economic fears. If the Federal Reserve Bank starts cutting rates in the fall, as it’s expected to do, businesses could see cash loosen up, allowing them to ramp up hiring and free up workers who may feel stuck in their jobs.
“People get very uneasy, and so they stay put. But the minute things shift, that’s when you start seeing people get really assertive, both in hiring and in their job search,” Shannon Gabriel, VP of the leadership solutions practice at TBM Consulting, told HR Brew. Should the Fed cut rates, Gabriel predicted that may encourage more hiring. “We’re going to start [seeing] people relax, companies will relax. They’re waiting on it.”
What the naysayers think. Other experts think that mass quits across the labor market aren’t likely to happen again. The resignation rate in July 2024 was 1.3%, down 52% from October 2021, according to data from Visier, an HR analytics platform with more than 23 million employment records. And there’s currently no indication, based on Visier’s data, that will change, Andrea Derler, Visier’s principal of research and value, told HR Brew.
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“We can’t see that there are any indications currently for more resignations,” Derler said. “Currently, people are hunkering in. It doesn’t mean that can’t change, of course. But we don’t have a crystal ball.”
One driving force behind the Great Resignation was workers quitting for jobs with higher pay, driving up wages across the board. But wage growth in the US has continued to decline since its peak in January 2022, according to Indeed’s Wage Tracker.
“Even though employees certainly want to earn more and need to earn more across the board, employers seem to have also reached a point at which they said, we can’t just pay you a lot more,” Derler noted.
Additionally, while there is still competition for top talent, Stafford and Derler both said employers aren’t facing the steep labor shortages seen at the peak of the Great Resignation.
“It’s back to where it was pre-pandemic, like in 2016 [or] 2017, which represented a much more balanced labor market when it came to supply and demand of talent,” Stafford said.
No matter what, engagement is important. Whether or not a Great Resignation 2.0 is on the horizon, it seems employees are staying still for the moment. Experts agreed that now is a good time for employers to invest in their workers before they head for the door.
“Regardless of whether there’s a groundswell and opportunity for people to switch jobs, or there's less opportunity, fundamentally engaging with employees and ensuring that people are connected to the why behind their work is going to help companies,” Stafford said.
HR may want to focus on managers in particular, Gabriel said. Supervisors, she added, can have a significant impact on employee engagement, and those who aren’t equipped to be leaders can have a detrimental effect on retention.
“There’s a lot of positive benefits to spending the time, the money, and the investment in [supervisors] to make sure that they’re equipped to be effective leaders, and they can handle difficult situations,” Gabriel said. “Because if they’re not, and they can’t communicate effectively, or they create their own bad culture inside their department, the runoff with turnover is tremendous.”