Lessons From The Great Resignation

What's up, everyone. This is Alex Lieberman, co-founder, and Executive Chairman of Morning Brew. Welcome back to Founder’s Journal, my personal audio diary, where I give you, the business builder, the tools you need to think better in order to build better, whether that's building a business, a team, or a new product. Today, I am talking about the Great Resignation. I'm also trying something a little bit different. Normally I script these episodes from beginning to end, but this time I'm going to try to make it a little bit more conversational, fire from the hip a little bit more. So if you hear just the episode sounding differently than it normally does, that's normal, but let me know what you think. I'm constantly trying to improve the show. And I want to hear what you think about this kind of new format. So let's hop into it. 

What is the Great Resignation? 

I said this show would be about the Great Resignation, but first it's probably important to tell you what the Great Resignation actually is, why the title and why are we even talking about it? So basically since the pandemic started in March of 2020, we have seen an above average amount of people choosing to leave their jobs. In April of 2021, so basically a year after the pandemic started, there was a record set for the number of workers who quit their job in a single month. And then in July, a new record was set, and August a new, new record was set. In July of this year, 4 million Americans quit their jobs voluntarily. And on top of that, there were a record 10.9 million open jobs at the end of July. But I think it's also important to drill into this a little bit and look at the Great Resignation, not just as this macro trend, but understand at an industry level at a tenure level, how do things look similar or different? So for example, if we look at resignation rates based on tenure, what's interesting is normally you see highest resignation for junior employees because typically people are trying to figure things out early in their career, but actually rates are highest for mid-career employees between the ages of 30 and 45.

And I think it kind of makes sense mostly because mid-career employees have the ability to quit a job and sustain their life for a little while where they don't necessarily need another job lined up. They have some money saved up in the bank to be able to live while they're searching. And also there's probably just more confidence from a mid-career employee. They've developed skills over the course of their career, that there will be demand for at some point in time. I think it's also possibly because it's riskier for employers right now to hire less-experienced people when you need to onboard them remotely, which just gives mid-career employees more leverage.

And then on the industry side, resignation rates are highest in a few industries: tech, healthcare, food, and accommodations. I think it makes a ton of sense in industries like food and accommodation and especially healthcare also, where I can imagine for the bulk of the pandemic from March of 2020 to let's call it April 2021, it was tough working in those roles. It was intense. I'm sure burnout was real. So seeing people leave those jobs now that there's an opportunity to, I think makes a ton of sense. Actually, in prepping for this episode, I ran a poll on Twitter where I asked people this question: Are you thinking of leaving your job in the next six months?

The 5 reasons people are resigning

And I didn't really have a reference point, but directionally it feels pretty high. The 1,200 people that answered this poll, 44% of the 1200 said, yes, they are thinking of leaving their job in the next six months. 38% said no. And 18% said not sure. So now I've set the stage of what the Great Resignation is. I want to talk about: Why is it happening? And the short answer is, none of us know exactly. Anyone who tells you that they know exactly why I think is lying or has too much confidence in their opinions. But I think there's a ton of reasons. And I think all of these reasons contribute to this patchwork of higher-than-average resignation rates from jobs.

The first reason is, there's more opportunity to make money than ever before. First, it's a tight labor market. There's tons of open jobs. There's more demand than there is supply. Demand for knowledge workers has never been higher. We're also in a 10-plus year bull market, so the economy is doing well. Right now on top of that, I've talked about this in a past Founder's Journal, but I think we're in a golden age of entrepreneurship. And we're seeing that in the stats. Starts of new businesses is going through the roof. So I think a lot of people are seeing the possibility of working for themselves as a real possibility, more than ever before. 

Second, I think the pandemic created perspective. Many of us were cooped up for months, spending time or being by ourselves with a few people. And I think rather than, you know, going out to dinners or activities with friends, we had a ton of time just to think and reflect on what it is that we actually want. I also think subconsciously that people start to really think about what matters to them in their work and in their life when they see a world-changing world pandemic happen, and you see hundreds of thousands of people in the U.S. dying, and likely people close to you are affected. 

The third reason, I think we're seeing the Great Resignation is the pandemic just changed expectations forever. The feasibility of flexible work was proven over this last 18 months. It made people realize that we probably should have been thinking a lot about remote work as employers and bosses prior to that, but now employees more than ever before expect to be able to work on their own terms because it's proven to be successful these last 18 months. 

The fourth reason is the pandemic burnt people out. Working from home sets new expectations of the ability to spend time with family, but also it blurs the lines between work and life. And so I think millions of people have been working themselves to the point of exhaustion. They haven't been able to create the same division between work and living that we had to do when we were actually commuting to the office. And so I think people have just reached their tipping point and they need a break.

 And then fifth, and finally, I believe the pandemic just delayed pent-up demand for people to leave. People were uncertain in the thick of the pandemic, what was happening in the world. And they were worried about their own finances. And so probably six-to-12 months of people that were planning on leaving got delayed because they didn't want to search while there was so much uncertainty in the world. Now they're starting to restart the search that was already supposed to happen a year ago. So I was personally interested in what was driving people leaving their jobs, because like I just shared, there were five of these big trends, but I wanted to see, was there one I could pick out? So I ended up running a second survey. And in that second survey, I asked people, why is it, if you are thinking about leaving your job, why is it that you're thinking about leaving your job in the next six months? I gave four options.

The first was, I don't like my job. The second was, I feel burnt out. The third is, I'm not compensated appropriately. And the fourth is, I want to start something. Now over 800 people have responded to this poll. And if you were to ask me before looking at the results, I would have said, absolutely the top response would have been people don't like their jobs. Like that just seems to me like the most all encompassing. But actually that was the least responded to answer. Number one was people want to start something. And number two is people don't feel like they are appropriately compensated. 

The Great Resignation is good for us

And so now we've talked about what the Great Resignation is and what the factors that could be causing it now more than ever. I believe that entrepreneurship is a big driver of it. Let's talk about as a founder, an employer, or a manager, how we work through this, how do we deal with people deciding to leave our companies? And the short answer is, all I think the Great Resignation has done, is it has taught us or forced us to do things we should've always been doing. The Great Resignation is a great thing. It is just holding owners of businesses and managers accountable for what should have been done before the pandemic. And before employees decided to leave en masse. All this environment does, is it creates perfect competition for us to run companies and manage people the right way. We should have ambitious, positive missions that people believe in. We should pay our people well. We should treat our people well. We should build cultures on strong foundations of values that we hire for those values. We shouldn't, we should overstaff our teams so that when we lose people, inevitably the machine of our company doesn't break. We should spend time upfront educating our team members on what our business is, the history, and how it works, so people buy into not just the mission, but the way we do business. We should provide as much flexibility to our teams as possible. We should reward our best performers. We should set the right expectations when we hire people so they don't come into a job that is so different from what they were planning on doing.

And we shouldn't try to keep people that don't want to be there. If you hear all of these things, it all sounds logical. It all sounds like things we should have been thinking about before. But the issue is, is in a market where you feel like if someone leaves, you can just instantly replace them, it leads to comfort and us being sloppy. And honestly, things like overstaffing, we hadn't been thinking about that in the past with Morning Brew. Things, things like setting the right expectation for people in their roles. I think we were poor at communicating those things in the early days. So I just think this is forcing us to run our companies in a better way. I actually think companies are going to be more successful because of this. And I think the best part is employees and people are going to be able to switch jobs and switch roles in a way that they will be able to optimize for making money, for doing what they enjoy, and working with people that they enjoy working with. So overall, I think the Great Resignation is a net positive, and I think it creates a ton of opportunity for us to be better builders.

 I'd love to hear your thoughts on this. If you have started a company or you're a manager, have you seen the Great Resignation happening firsthand and how have you dealt with a lot of people deciding to quit their jobs at your company? And then on the flip side, if you're an employee, have you thought about leaving yourself and why is it that you've thought about leaving if you have thought about it? Again, any responses I keep anonymous. I just love engaging these conversations with other founders or just people in the workforce. 

Shoot me an at alex@morningbrew.com or DM me on Twitter @businessbarista, with your thoughts on the Great Resignation, and also make sure to pound the subscribe button for Founder’s Journal on Apple, Spotify, or wherever you listen to podcasts. It is the number one way to grow the show. And finally, if you do subscribe, make sure to check out Founder's Journal content on Morning Brew’s YouTube channel. Go to YouTube, search Morning, Brew and click on our channel. There, you will see an entire playlist of Founder’s Journal videos, like how to deal with imposter syndrome, why Ethereum matters, and what the keys to success were for selling our company for eight figures.

Thanks again for listening. And I'll catch you next episode.