‘Slightly elevated’: New data shows Australia’s Great Resignation is a myth – at least so far

Much has been said about fed-up workers quitting their jobs amid COVID, but the theory isn't stacking up. Photo: Getty

You’ve probably seen the headlines – a global ‘Great Resignation’ is supposedly underway as workers quit their jobs in droves to look for better pay and conditions in the wake of the pandemic.

It was one of the major stories of 2021, particularly in the United States, and also among local commentators in Australia, with warnings workers would use newfound bargaining power to put bosses in a tricky position.

Workers are said to be looking to re-balance their entire relationships to work, with shorter hours and more time to spend with family and friends.

But there’s a wrinkle in the narrative – at least as far as Australia goes: the latest data indicates this wave of resignations isn’t so great.

Bjorn Jarvis, head of labour statistics at the Australian Bureau of Statistics (ABS), said on Thursday that the number of workers leaving their jobs to find better ones is actually only “slightly elevated” as a rolling two-year average.

In other words, the latest ABS data – published in a spotlight on labour market mobility – suggests the “great resignation” is actually a big fizzer.

The ‘slightly elevated’ resignation

Mr Jarvis noted the number of Australians who said they resigned to take a “better job” or because they “wanted a change” rose from 228,000 in February 2020 to more than 300,000 in August and November 2021.

But that came after it fell to 129,000 in May 2020 as COVID set in and many local workers opted to hunker down with their existing employers.

“Given the reduced job mobility during the first year of the pandemic, some of the increase in 2021 will reflect delayed/deferred job mobility,” Mr Jarvis said on Twitter.

“The rolling two-yearly average for this reason was around 206,000 in November 2019 and around 222,000 in November 2021.”

These figures are nothing like what happened in the United States – where the purported great resignation has also been challenged – after almost a third of its workforce changed jobs during November 2021.

Rather, they make headlines like “here comes the great resignation” and “great resignation likely to occur in Australia” look out of place.

Professor Jeff Borland, a leading labour market economist at Melbourne University, said the ABS data shows no evidence of a resignation wave.

“At the moment there’s no evidence of a great resignation in Australia,” he said.

Professor Borland said a key measure – the percentage of employed people who do not expect to be with their employer in 12 months – has not shown a big increase that can’t be explained by catch-up effects.

“It’s a little bit above where it was, but that’s completely explicable in terms of catch up,” he said.

This doesn’t mean the pandemic hasn’t driven big changes in the way workers think about their employment though – look no further than the huge rise in remote working in Australia and around the world.

The latest jobs data also suggests businesses are finding it harder to locate workers, with unemployment sitting at a decade low 4.2 per cent.

So, what’s going on? And does the lack of a great resignation Down Under mean workers are less likely to get better conditions in 2022?

Workers still have more power in 2022

APAC Indeed economist Callam Pickering spends a lot of time looking at how Australians are moving around the jobs market.

He says the so-called great resignation hasn’t shown up in the data, but argues this isn’t because workers aren’t in a position to secure better pay and conditions if they decide to leave their current roles.

Rather, he said many workers are underestimating the benefits of moving jobs and overestimating the risks, particularly given the labour market currently favours workers more than it has over the past decade.

“Employees are still in a favourable position – there’s still a shortage of talent and still a lot of jobs available,” Mr Pickering told The New Daily.

“But, overwhelmingly, people aren’t taking advantage of that.”

Tweet from @Bjorn_Jarvis

Mr Pickering said workers are still navigating COVID-19 with a mindset that job security is more valuable than new and better opportunities.

Structural factors are at play here as well, including the rise of insecure work in Australia over the past decade, which has made workers less confident about their prospects in the labour market.

But Mr Pickering said there hasn’t been a better time since the GFC for workers to test conditions, with job ads near record highs as bosses look to open up again after two years navigating lockdowns and restrictions.

“I don’t know whether we’ll see a great resignation here or not, but I certainly think we have the conditions for it,” Mr Pickering said.

Much has been said about stronger wages growth in 2022 as the jobs market tightens, and the latest data suggests those workers that have left their jobs have had luck securing better pay and conditions.

But a spike in inflation over the December quarter is threatening the outlook for workers, who may see their wage gains eaten up by higher prices – particularly if the Reserve Bank is forced to raise interest rates.

Professor Borland agreed workers are valuing job security highly, adding that it may take time for workers and businesses alike to change their approach to the jobs market in the wake of the pandemic.

He said this would be consistent with a jobs market that’s recovering from a shock like the pandemic though, not any huge shift in the way people are thinking about work itself.

“There is likely to be some increased mobility,” Professor Borland said.

“Partly because of catch up to the mobility that’s been surprised and maybe because the labour market in Australia will be so strong that there will be good opportunities for people to move.”