Last updated: May 28th, 2024
Increased competition in the job market may be ahead of us in 2024, with signs that ‘The Great Resignation’ is now behind us. In contrast to workers shopping around for jobs with better conditions during the initial years of the Covid-19 pandemic, pundits now say employees want job security.
Recent data shows more people may be holding tightly to their jobs, which could be in response to higher satisfaction.
Or conversely, greater uncertainty about the state of the economy.
But given that post-pandemic labour markets are starting to slacken, how far are things turning in the opposite direction, and what does it mean for Australians’ career prospects this year?
(Related: What Is The Average Salary In Australia?)
Is The Great Resignation Over? Did It Even Happen?
The so-called Big Quit or Great Resignation was a US-led phenomenon, as evidenced by data from the US Labor Department, which found:
- Resignations in the United States reached an all-time high in November 2021 — with 4.5 million people leaving their jobs that month (compared to 3.3 million in November 2020).
- 50 million people voluntarily left their jobs throughout 2022 – the highest annual level since the Department started tracking this metric.
Unprecedented rates of quitting were driven by many factors, including workers’ desire for higher pay, more opportunities for advancement, a better culture and more flexibility.
Above: The Great Resignation was a continuation of a long-term trend that started in 2009.
In their article for the Harvard Business Review, Joseph Fuller and William Kerr argue that the impact of COVID in 2020 exacerbated an existing trend towards people ‘reshuffling’ their careers and resulted in more people changing jobs to avoid a return to the office.
Important!
At the height of this reshuffle, the US experienced a record-high national ‘quit rate’ of 3%.
Indications of an exodus were less noticeable in Australia, and didn’t emerge until 2022.
A 2021 survey of more than 1,800 Australians found that 38% were considering leaving their jobs within 12 months.
Job mobility figures from the Australian Bureau of Statistics (ABS) show that 9.5% of employed Aussies changed jobs in the 12 months to February 2022. That was the highest percentage in a decade and an increase from 7.5% in 2021.
However, it doesn’t seem as significant when you consider:
- The average job mobility rate in the 10 years between 2012-2022 was 8.5%.
- The average rate at which Australians changed jobs in the decade prior to that was 10.8%.
Can Employers Expect A Decline In Departures?
People have been speculating about The Great Resignation being over since 2023, but some commentators say we’re now witnessing workers becoming overly cautious.
The latest turnover figures from the Job Openings and Labor Turnover Survey (JOLTS) show that so far in 2024, the rate at which Americans are quitting their jobs is lower — at just over 2%.
The Wall Street Journal posited that the decline in quitting back to pre-pandemic levels signalled waning confidence and a US economy in trouble, especially in light of high-profile layoffs, smaller pay bumps and expected slower GDP growth.
Others argue it’s merely a return to ‘normal’ as we recover from Covid.
Important!
The rate of job switching in Australia remained steady at 9.5% in the 12 months to February 2023. The ABS is due to release updated figures in July 2024.
Unemployment in Australia increased to 4.1% in April 2024 (from 3.8% in March) in seasonally adjusted terms. It’s still low compared to over 7% after Covid struck, between May to July 2020 — but forecasts are for continued labour market weakening.
Above: ABS data reveals job vacancies decreased by 6.1% between November 2023 and February this year, and dropped 17.7% over the year.
Important!
Australian data from Seek released in May 2024 shows job ads declined for the fourth consecutive month, while applications per job ad are rising.
But here’s where it gets interesting.
The number of open positions is still higher than pre-Covid levels, while the number of applicants for each job is just about back to pre-Covid levels.
In other words, demand from employers remains strong, but supply is starting to stabilise.
Seek ANZ’s Managing Director, Kendra Banks, said:
What Does It Mean For The Economy And Your Career?
Writing for Bloomberg, Jonathan Levin says that whether the drop in US workers quitting is due to positive factors (wage growth) or negative factors (wavering labour market), it could ease concerns that “overly tight labour markets and too-hot wage growth” will fuel further inflation.
The Reserve Bank of Australia (RBA) also predicts that “the closing of output and unemployment gaps” will help balance Australia’s economy — with inflation expected to drop back into the target 2%-3% range by the end of 2025.
(Related: Will Australia Go Into A Recession?)
In forecasts released in May 2024, the RBA said unemployment will reach 4.2% by year-end.
It also says inflation will ease faster than an anticipated decline in wage growth, meaning real incomes should increase.
However, people are still switching jobs because the reasons for The Great Resignation remain relevant today.
People are still resisting return-to-office mandates and seeking more flexible and progressive workplace cultures and conditions, such as a four-day work week.
Gartner’s Future of Work report 2024 shows many employees now feel attending the office every day “is simply too costly”, and that employers will have to address the issue to attract and retain great people.
Talented people with in-demand skills still have leverage. If you’re an employed job hunter, finding positions good enough to lure you away from a secure position may be more challenging.
Jody
