From the Great Resignation to the Great Reshuffle
9th Apr 2024
Recent economic data suggests the UK is in mild recession, with weak activity starting to take its toll on the labour market.
Whilst unemployment is slightly increased, the jobless rate remains below 4%. The number of people fell slightly and job vacancies continued to decrease, although the total of 908,000 remains above pre-pandemic levels.
Data provided by Reed Recruitment and analysed by Bloomberg show listings for open positions fell by almost a quarter in three months to February 2024 compared to a year earlier. The number of applications rose by a fifth year-on-year for February, adding to evidence that what was once a red-hot labour market has cooled significantly.
During the pandemic and its immediate aftermath, we witnessed the Great Resignation, where huge numbers of employees were leaving the workforce, primarily for financial reasons.
However, the final death knell of the Great Resignation has rung. Data from the US Bureau of Labor Statistics shows that workers are now quitting their jobs at the same rate as in the six months that preceded the pandemic. Another shift n the labour market shows that while workers were changing jobs at rates well above historic levels, they are now sticking with the same employer.
Salary was a key driving force behind the Great Resignation. Pay gains from switching jobs began to accelerate dramatically in the spring of 2021, with media year-over-year increases for job changers reaching a record 16.4% by June 2022.
Those gains are now slowing. Median annual pay growth for job stayers reached a high of 7.8% in September 2022. Since then, median annual pay growth has fallen steadily, reaching 5.9% in September 2023.
Employers have reacted positively to the challenges of the recent talent wars. Work for many people has improved over the past two years. Many jobs are paying more, improving benefits, investing in employee wellbeing, and becoming more flexible, inclusive and diverse.
However, a new trend is emerging in workforce data – move over Great Resignation and let us introduce the Great Reshuffle. Employees have begun to shift away from some industries into more sought after ones. Unskilled or semi-skilled workers are now moving from sectors into new sectors where benefits and wellbeing allow them to work from home. For example, we are seeing cashiers moving to call centre positions to work and enjoy the benefits of working from home.
The labour-market continues to change as the traditional norms of work adapt into different ways of working, driven as they are by changed employee behaviours and underpinning both micro and macro-economic performance.
