The great Resignation, low unemployment, and the recruitment market

In May 2021 Anthony Klotz, a psychologist at Texas A&M (Agriculture and Mechanical) University, coined the term ‘the great resignation’ as a way of naming what occurred the month before in America i.e. a record number of resignations in the US workforce.

In New Zealand a lot of media picked up on the term; but it was difficult to understand the concept as the country was experiencing unemployment levels dropping to record lows, and surely a resignation is an outcome to an earlier action or decision.

Then, just last month, along came Bharat Ramamurti, the US National Economic Council Deputy Director, coining a new term ‘the great upgrade’.   

And suddenly it all made sense to me, I could understand the reasons why I was receiving five times the usual number of applicants for jobs when there was now unemployment close to 3%:

• Covid put a premium on job security; people were gravitating away from at-risk sectors and wanting to work in industries that were either unaffected, or thriving
• Border closures stopped the influx of visa-holding job seekers; while those already in the country felt the pressure of returning home as the NZ Government was not approving visa renewals
• Recruiters, sensing a boom in the market and commissions, fuelled the talk of high levels of job vacancies and increasing salaries 
• Job boards would furiously survey candidates, recording and publicising their high levels of interest in changing jobs; thus hoping for increased job vacancies being listed, resulting in higher revenue 

And the result is ‘the great upgrade’.

Encouraged to believe there is a candidate short employment market businesses now feel they are being forced to consider candidates who feel bold enough to apply for jobs that pay more and offer a better job title but in reality may be at a level above their true capability.

For my clients I am suggesting they may need to find inventive ways to ‘hand-cuff’ their good employees and when recruiting realise that they may need to pay more in salary and benefits than they expected, and/or hire at a lower level and invest in training.

John Keesing
021 649-920  www.parrismills.co.nz