Blog Post

Having lived long enough in fear of the pandemic, employees have emerged stronger than anticipated. So much so that they are now changing the power dynamics and gaining the upper hand in the negotiations. According to LinkedIn’s chief economist, Karin Kimbrough, “Candidates are being much more selective about where they work, and workers are more vocal about what they want.”

U.S. Bureau of Labor Statistics states, 4 million Americans quit their jobs in July 2021. Since few months, resignations have been abnormally high, with a record-breaking 10.9 million open positions at the end of July.

To make matters worse, 41% of the global workforce in total is considering resigning this year, as stated in the Microsoft 2021 Work Trend Index.

Reasons Driving This Shift

Surprisingly, resignation rates have been the highest among mid-career – between 30 and 45 – employees, with an increase of more than 20% between 2020 and 2021. Reason for low turnover in younger employees is attributed to the greater financial instability and reduced demand for entry-level roles.

Factors that have influenced the mid-career employees to leave jobs can be segmented into the below categories,

1. Some employees want to continue working from home instead of commuting to the office. As a result, they are prompted to leave the jobs if companies do not support a remote or hybrid work culture.
2. Whether remote work, career advancement, high pay, or relocation, employees don’t want to compromise anymore. Pandemic struggles have pushed them to reevaluate priorities and become firm with their demands. Due to which frustrated or unsatisfied employees are leaving the jobs than ever before.
3. Rise in vaccination and the slowly recovering economy have pushed the backlog of 18 months of resignations at once.
4. Overworked employees during the pandemic are openly leaving their jobs and looking for companies offering better work-life balance. Many are taking career breaks and waiting for the right opportunity to strike. While many are also considering freelancing as a promising option.

Impact of Great Resignation on Contingent Workers

UpWork recently released a study indicating that 20% of American workers — approximately 10 million individuals — are considering a freelance career, with the majority citing a desire to work remotely as their primary reason.

This shift in mindset and priorities is luring people into the contingent workforce.

Good news is contingent arrangement does offer what candidates are looking for. It allows employees to work remotely and provides the flexibility to work at leisure from the comfort of homes.

Also, the shortage of full-time resources in the employment market is pushing employers to look for contingent talent. It is the reason why companies are adopting a blended workforce model. They are playing it smart and hiring contingent workers to supplement their permanent workforce and working with both in a single engagement structure.

In doing so, companies are ready to pay more to the contingent workers now.

Read More: What is Blended Workforce Model and How Can Companies Prepare For It?

On the other hand, staffing agencies at the receiving end of this shift are experiencing a sudden increase in the demand for contingent workers. Randstad, the global staffing group, jumped at least 20% year on year as coronavirus lockdowns eased across the globe.

Workforce Logiq, a global provider of intelligent workforce solutions, predicts that 82% of businesses expect an increase in the utilization of contingent worker in the next 12 months in an attempt to foster enterprise flexibility and embrace an agile workforce.

What Happens After Great Resignation

Employees will gain negotiation power, and companies will attempt to attract the candidates with appealing offers.  Minimum wages will change, and companies will become more flexible with work arrangements. Remote work offerings and hybrid work culture will also become a new norm.

Companies failing to keep up with these changes will find it hard to retain or attract talent.

Also, the contingent market will experience a growing talent pool as more candidates opt for a flexible freelancing arrangement. The resource crunch will push the employers to revise the hourly rates for the niche job roles.

Read More: Revamp Your Contingent Talent Experience in These 3 Steps

However, all these deductions and analyses may change if CoVID strikes again and upturns the slowly balancing economy. But flexible work culture and remote working demands will continue to persist even if the situations change. Companies must embrace the new work culture in order to remain minimally affected by the great resignation wave.