Are we really witnessing a ‘great resignation’?

There has been much discussion of employees quitting their jobs en masse. But, as yet, there is little empirical evidence that resignations, hiring or movement between jobs in the UK are at historical highs.

Often when things happen in the United States, people can assume that the same things are happening elsewhere. One of the latest topics to take on this mantle is the ‘great resignation’ – the idea that the Covid-19 pandemic has prompted a huge wave of life stocktaking, leading to a large rise in the number of people quitting their jobs, either to move to a new job or a new life outside work.

It is certainly true that job quits in the US labour market at the end of last year were at a very high level – 3% of the employed quit their jobs in November 2021, compared with an average of 2% a month before the pandemic. This is over and above what might be expected if this were simply a rebound from the enforced immobility during the pandemic.

So, are we seeing the same thing here in the UK?

Well not yet. If the same phenomenon were happening in the UK, we would expect to see at least one of the following things: more people leaving their jobs voluntarily (‘job quits’); more people in work looking for a new job; more people moving from one job to another; or more people being hired.

The figures below track the weekly level of each of these outcomes over the course of the pandemic up until the first week of December, using data from the Labour Force Survey (LFS). This is the same household sample survey used to produce the official UK unemployment count each month.

Figure 1 also plots the weekly average quit rate over the five years preceding the pandemic (shown by the dotted line). It shows that quit rates toward the end of 2021 were no higher, and if anything, somewhat below, the average before-pandemic quit rates seen at the same point in the year. (The dark shading indicates any statistically significant departure from the norm – any dark shading in Figure 1 indicates significantly lower quits than the norm throughout the pandemic.)

Quit rates were rising in the autumn of 2021, but they always rise in the autumn of any year. There is no indication that they have surpassed previous norms or made up for a stalling of quit rates during the course of the pandemic, let alone reached dizzying new heights.

Figure 1: Weekly quit rates in 2021 relative to weekly norms

Source: LFS, author calculations

A similar pattern can be seen in hiring rates. These have also risen since lockdown, but they are no higher than hiring rates seen in similar weeks in the years before the pandemic. Again, autumn has always been peak hiring season (as shown by the dotted line) and 2021 looks little different.

Figure 2: Weekly UK hiring rate

Source: LFS, author calculations

Much the same can be seen in the pattern of quarter-on-quarter job-to-job moves over time (this includes those in work in the last quarter who moved to a new job in the next quarter). These are high now (or at least up to the end of September 2021 – the latest available data), but again no higher than in the years before lockdown.

Figure 3: Job-to-job moves

Source: LFS 2-quarter panel author calculations

There is also no evidence of a rise in the proportion of the employed labour force looking for a new job. If anything, this is still well below the weekly norm (see the dark shading through the course of the crisis).

Figure 4: Percentage of employed and looking for a new job

Source: LFS, author calculations

What are we to make of this? It may be that it is just too early to expect any significant changes in this period covered by the data given that the pandemic restrictions were still in place – and indeed yet to be tightened after the emergence of omicron.

Certainly vacancies relative to the size of the labour force are now very high – 50% above the average before the pandemic (though it could be argued this is just a rebound from the height of the pandemic when vacancies were 50% below the norm). As a result, there are opportunities for those looking to change jobs. It may be that as the economy opens up, with the renewed push to end home working in early 2022, that there will be a new chapter of great resignations. But as of now, it looks like the evidence doesn’t yet fit with a good story.