Great Resignation:
Definition, Uses & Comparison

The Great Resignation, also known as the Big Quit or the Great Reshuffle, was a primarily American economic trend in which employees voluntarily resigned from their jobs en masse, beginning in early 2021 during the COVID-19 pandemic. This phenomenon saw record numbers of workers leaving their positions, with approximately 47 million Americans quitting their jobs in 2021 and over 50.5 million in 2022. The trend was characterized by workers reevaluating their careers, work conditions, and long-term goals in the wake of pandemic-related disruptions.

Among the most cited reasons for resigning included wage stagnation amid rising cost of living, limited opportunities for career advancement, hostile work environments, lack of benefits, inflexible remote-work policies, and long-term job dissatisfaction. Workers most likely to quit were those in hospitality, healthcare, and education sectors. The term "Great Resignation" was coined by Anthony Klotz, a professor of management at University College London's School of Management, in May 2021, when he predicted a sustained mass exodus from the workforce.

Related terms: quiet quitting, labor turnover, employee retention, workforce participation

The Great Resignation was driven by multiple interconnected factors that emerged during and after the COVID-19 pandemic. The pandemic allowed workers to rethink their careers, work conditions, and long-term goals as lockdowns necessitated remote work arrangements and disrupted traditional employment patterns.

According to a Pew Research Center survey, 63% of workers who quit cited low pay as a reason, 63% pointed to lack of opportunities for advancement, and 57% mentioned feeling disrespected at work. Additional factors included child care issues (48% among those with children under 18), lack of flexibility in choosing work hours (45%), inadequate benefits such as health insurance and paid time off (43%), working too many hours (39%), and employer requirements to return to the office.

The desire for schedule flexibility was the primary reason to look for a new job for the majority of workers studied by Bankrate in August 2021. Workers desired the freedom that remote work afforded them during the pandemic, as well as better work-life balance. COVID-19 stimulus payments and increases in unemployment benefits also provided financial cushion for some workers to leave jobs they found unsatisfactory, particularly in low-wage sectors.

The Great Resignation impacted multiple industries, but certain sectors experienced disproportionately high quit rates. Restaurants and hotels, industries requiring in-person interactions, were hit hardest by waves of resignations. In October 2021, food service workers' quit rates rose to 6.8%, well above the industry average of 4.1% over the previous 20 years. The retail industry had the second highest quit rates at 4.7%.

Healthcare and social assistance also saw significant turnover, with approximately one in five healthcare workers quitting their jobs from the start of the pandemic to November 2021. This was largely attributed to burnout from high stress, long hours, and increased personal risk during the health crisis. The education sector experienced substantial resignations as well, with faculty members leaving academia for industry positions offering better compensation and work conditions.

According to decomposition analysis, 4 sectors contributed most significantly to the overall increase in quit rates: retail trade, professional and business services, accommodation and food services, and healthcare and social assistance. These sectors accounted for approximately 61% of the overall increase in resignations during the peak period from April 2020 to November 2021.

The Great Resignation created a tight labor market characterized by high job vacancy rates alongside elevated unemployment, a paradoxical situation that reshaped employer-employee dynamics. In the United States, job openings reached a historical maximum of nearly 11 million by the end of 2021, with approximately two job openings for every unemployed person.

This labor shortage gave workers unprecedented leverage to negotiate better compensation and working conditions. Wage growth jumped significantly, reaching 4.5% in December 2021, the highest since June 2001. Workers who switched jobs during this period typically saw substantial pay increases, with the typical Australian worker who switched jobs receiving a pay bump of 8% to 10%, and American job switchers seeing even higher gains.

The phenomenon led many employers to increase benefits, offer paid training, provide more flexible work arrangements, and raise wages to attract and retain talent. Some economists described the Great Resignation as akin to a general strike, especially regarding retail workers, as the collective action of workers leaving jobs forced employers to improve conditions. However, by mid-2023, the quit rate had largely returned to pre-pandemic levels, signaling the end of the Great Resignation period.

Contrary to initial perceptions, most workers who quit during the Great Resignation did not leave the workforce entirely but instead moved to new employment opportunities. A majority of those who quit a job in 2021 and were not retired reported being employed either full-time (55%) or part-time (23%) soon after. This suggests the phenomenon was more accurately a "Great Reshuffle" rather than a mass exodus from work.

Of those who found new employment, 61% reported it was at least somewhat easy to find their current job, with 33% saying it was very easy. Most workers saw improvements in their new positions: 56% reported earning more money, 53% had more opportunities for advancement, 53% found it easier to balance work and family responsibilities, and 50% had more flexibility in choosing their work hours compared to their previous jobs.

However, not all transitions were successful. Some workers regretted leaving their old positions, with one survey indicating that 80% of workers who quit during the Great Resignation experienced some regrets about their decision. Additionally, some of those who quit were retiring Baby Boomers, with 2.4 million more retirements than predicted occurring between February 2020 and August 2021 according to the Federal Reserve Bank of St. Louis.

While the Great Resignation originated in the United States and was most pronounced there, similar trends emerged in other developed countries, though with varying intensity and characteristics. In the United Kingdom, over 400,000 workers left their jobs between July and September 2021, up from 270,000 two years prior, with a record 1.3 million job vacancies in December 2021. The rate of UK workers aged 16 to 64 moving job-to-job reached an all-time high of 3.2% between October and December 2021.

In Australia, the phenomenon was characterized as a "Great Reshuffle" rather than a "Great Resignation," with over one million workers starting new jobs in the three months prior to November 2021, an increase of almost 10% over the pre-pandemic average. In Europe, a survey by SD Worx found varying resignation rates: Germany had the most COVID-19-related resignations at 6.0%, followed by the United Kingdom at 4.7%, the Netherlands at 2.9%, France at 2.3%, and Belgium at 1.9%.

India witnessed large-scale resignations in the information technology sector, with over a million resignations in 2021. Similar social movements emerged in other countries, such as the "tang ping" (lying flat) movement in China, which represented a rejection of overwork culture, though this was met with government censorship and opposition.

The Great Resignation began showing signs of petering out by mid-2023, with quit rates returning to approximately what they were in 2019. Anthony Klotz, who coined the term, predicted the plateauing of the quit rate in 2023 and later confirmed the end of the Great Resignation period. By July 2023, quit rates in retail and hospitality industries had returned to pre-pandemic levels.

Several factors contributed to the end of this trend. As fears of a possible recession grew and the job market became more competitive, many employees chose to stay in their current positions rather than risk changing jobs. Employers no longer needed to offer as many benefits or wage increases to fill vacancies as the balance of power shifted back in their favor. By the end of 2023, hiring had cooled and fewer vacancies were available, reversing the tight labor market conditions that had characterized the Great Resignation period.

The phenomenon transitioned into what observers called the "Big Stay," characterized by reduced turnover and workers being more cautious about changing jobs. Many workers were actually working two jobs to make ends meet or staying put due to economic anxiety. While unemployment remained under 4% and job growth continued to be positive through 2023, the era of workers having exceptional leverage to demand better conditions had clearly concluded.

While the Great Resignation represented record quit rates since the U.S. Bureau of Labor Statistics began tracking the metric through the Job Openings and Labor Turnover Survey (JOLTS) in December 2000, historical data suggests that even higher quit rates may have occurred in earlier decades. Between December 2000 and February 2021, the U.S. resignation rate never surpassed 2.4% of the total workforce per month, but during the Great Resignation, it reached 3.0% in November 2021.

Using historical manufacturing data from the Labor Turnover Survey (LTS), which tracked resignations from 1930 to 1981, economists have estimated that economywide quit rates in the 1960s and 1970s may have reached as high as 3.3% in 1973. This suggests that while the Great Resignation was exceptional for the 21st century, it may not represent an all-time historical high.

However, the quit rate had been following an upward trend since the recovery from the 2008-2009 Great Recession, when it hit an all-time low of 1.2% in September 2009. This long-term increasing trend suggests that the Great Resignation may reflect broader structural changes in the economy and worker attitudes rather than being solely a pandemic-related anomaly. The quit rate temporarily plummeted in April 2020 to 1.6% during the initial pandemic uncertainty before beginning its dramatic climb.

Remote work was a central factor in the Great Resignation, fundamentally reshaping worker expectations and employer-employee relationships. COVID-19 lockdowns necessitated remote work arrangements, and workers later advocated for more permanent remote work policies as they experienced the benefits of working from home, including savings on commuting costs, greater flexibility, and improved work-life balance.

According to Microsoft's Work Trend Index, 46% of employees considering leaving their jobs said they were likely to move because they could now work remotely, highlighting how remote work expanded job opportunities beyond geographic constraints. Workers who valued remote work flexibility were willing to change jobs to maintain it, with approximately 40% of U.S. white-collar workers in early 2022 stating they would quit their current job rather than give up their remote working arrangement.

Employers offering less flexibility with remote work arrangements experienced elevated quit rates compared to those with more accommodating policies. Many companies responded by announcing permanent or hybrid remote work policies, with some major employers stating their workers would never have to return to the office full-time. The physical friction of changing jobs disappeared for many industries as technology and remote work made it possible for workers to literally leave one company on Friday and start with a new one on Monday without changing locations.

Employers responded to the Great Resignation through multiple strategies aimed at attracting and retaining talent in an increasingly competitive labor market. Many businesses increased wages significantly, with some offering the highest pay increases in decades, particularly for new hires. Fast food companies like McDonald's began providing enhanced benefits including college scholarships and healthcare benefits to attract workers.

Companies also expanded flexibility in work arrangements, with many adopting permanent remote or hybrid work policies. Some offered paid training programs to attract recruits who might lack certain qualifications. A PricewaterhouseCoopers survey from August 2021 found that 88% of executives reported their companies were experiencing higher turnover than normal, prompting 35% to expand benefits to bolster employee retention.

However, some employers took a different approach. In response to labor shortages and rising costs, many American companies, especially in automotive, restaurant, and food delivery industries, invested more heavily in automation and robotics to reduce dependence on human labor. Others attempted to implement return-to-office mandates, though this often backfired by accelerating resignations. Some companies also engaged in what observers described as deliberate efforts to reduce worker leverage through hiring freezes, increased job requirements, and stricter workplace policies once economic conditions began to shift in their favor.

The Great Resignation catalyzed lasting changes in workplace culture, employer-employee relationships, and organizational structures. One significant impact was the normalization of remote and hybrid work arrangements, with many organizations permanently adopting flexible work policies that were previously rare or non-existent. Office buildings began to be reimagined as cultural touchstones and meeting places for recruiting, customer meetings, and collaborative work rather than spaces for daily individual work.

The phenomenon accelerated the shift toward what some experts call a "marketized" workforce, where workers increasingly offer their skills to different companies simultaneously rather than maintaining single, long-term employment relationships. This was accompanied by the emergence of new workplace terminology including "quiet quitting," "quiet hiring," "quiet firing," "bare minimum Monday," "loud quitting," and "resenteeism," reflecting evolving attitudes toward work and employment relationships.

The Great Resignation also highlighted persistent structural inequalities in the workforce. Economist Kathryn Anne Edwards noted that the gender pay gap continued to widen during this period, with men still earning more than women across all racial and educational groups. The oversupply of office space resulting from increased remote work led developers to demolish or convert buildings to residential units, particularly in areas with housing shortages. Perhaps most significantly, the period demonstrated that workers could successfully demand better conditions when labor markets tightened, though this leverage proved temporary as economic conditions shifted.

The Great Resignation is often compared to 3 related labor market phenomena:

Great Resignation vs. Great Reshuffle

Great Resignation vs. Quiet Quitting

Great Resignation vs. General Strike