The Great Resignation – Why workers are quitting and starting their own company?

There is no escaping the fact that an economic catastrophe came into our country along with the coronavirus. It walked on the streets, came up to our doors, welcomed itself and took over our lives. A number of various applicable and unprecedented studies have shown that the pandemic created a demand shock, a supply shock and financial shock all at once.When the pandemic caused us to shut our doors and stay hidden in our homes, a lot of people suffered. Not just physically and mentally but equally financially. Several thousands were cut out from their jobs because their employers had to make ends meet, others were driven to the point of exhaustion where workload increased due to lack of workers but pay decreased due to lack of funds. Those without jobs were either re-hired by different companies at a much lower level job role with an equally low pay cheque or they had to do several odd jobs working over sixty hours a week. Either way, it led to a rise of, what Associate Professor Anthony Klotz of Texas A&M University coined, ‘The Great Resignation’.

The pandemic basically drove people to essentially re-evaluate their priorities, giving rise and encouraging people to really pursue their passions and kind of start their own businesses. An Economist working at the University of Maryland, John Haltiwanger, objectively discovered that the speed of business applications being submitted since the middle of 2020 has been the highest. A fairly recent survey hosted by Digital.com discovered that thirty two percent of Americans chose to quit their jobs and start their businesses. According to a statement by the Department of Labor, In the United States of America alone, more than four million people quit their jobs. This of course, resulted in job vacancies at a twenty year record high.

If we remember the pre-pandemic days, a little after the Great Financial Crisis, certain decisions were taken when it came to policies. Decisions that were brought about to enforce low interest rates and bolster asset prices. This led to the increase of housing prices, stocks and more. However, it is extremely important to note that this was primarily driven by the labour left, a decision that in it’s essence should have raised wages at the lower quarter of the socioeconomic spectrum. And then suddenly, everything stopped. Suddenly, we were lost and confused because the states and the government weren’t helping anyone and companies’ only apparent fit option was to lay off.

However much we try to pin the blame on the pandemic, it was nothing but a final push into the abyss for most workers to quit. The mass departure of workers took place due to the employer’s lack of onus.

Now, with things slowly reeling back to normal, companies have high vacancies and more businesses have stepped in to increase the competition- giving a rise for the need of workers. An Associate Professor of Business at Columbia Business School, Meyer Feldberg recently commented on how employers and businesses have reached a turning point in their businesses- a moment in time that will decide whether they will risk losing thirty percent of their workforce due to the existing status quo or reinvent their working methods and introduce healthier working environments. Either way, we will have to wait and see.