The truth about the ‘Great Resignation’: It didn’t actually happen

The notion that the pandemic has triggered a mass exodus from the workforce – the “Great Resignation” as it is dubbed in countless commentaries – isn’t just overbaked, it’s plain wrong.

Employment and participation in the Irish labour market have never been higher. According to the most up-to-date data from the Central Statistics Office, there were 2.47 million people classified as employed in the State in the third quarter of 2021, the highest level of employment on record.

That’s not surprising as the State has a growing population that implies a growing workforce. What is surprising, however, is that the headline employment number is larger than the 2.32 million total recorded in the third quarter of 2019 .

That means there are more people working right now than there were prior to the pandemic. There's a caveat. The 2.47 million figure, contained in the CSO's latest Labour Force Survey, included about 100,000 people who were receiving the pandemic unemployment payment (PUP), which you might reasonably argue meet the definition of unemployed.

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But even if they are removed, bringing the Covid-adjusted employment total down to 2.37 million, employment is still higher than pre-pandemic levels. So there’s little evidence to support the thesis that there’s been a major “stepping back” from the labour force.

Women’s participation

Also implicit in the “Great Resignation” narrative is the idea that Covid has constrained many people, particularly women, from working because of the additional childcare burden.

This seems plausible and might be true for some but if it was happening to a large extent, it would show up in the participation rate. The labour force participation rate is a measure of the economy’s active workforce, in other words those working and those seeking work.

The CSO numbers indicate the participation rate in the third quarter of last year was 65.1 per cent, again the highest on record but more significantly higher than the 62.6 per cent recorded in the pre-Covid fourth quarter of 2019. So more people are working or looking for work.

The figures show that the male participation rate here rose by 1.6 per cent to 70.5 per cent between 2019 and 2021. This is significant in itself but not when compared with the rise in the female participation rate, which increased by more than 3 percentages points, from 56.5 per cent in 2019 to 59.8 per cent in 2021.

This appears to be suggesting that the pandemic and perhaps the shift to remote working, instead of constraining women, is facilitating greater female participation in the workforce.

Traditionally female participation in the labour market here has lagged other countries, but it seems strong demand for workers is being met, partially at least, by an increase in female participation.

All of this is not to say there aren’t chronic labour shortages in certain sectors or record levels of churn in the market. Recruitment firms up and down the country have been telling us this for months.

A recent survey of firms in Northern Ireland, conducted by industry body Manufacturing NI, found that the availability of workers rather than the Northern Ireland protocol was the most pressing issue for most businesses there.

A tightened labour market typically means upward pressure on wages as employers compete for talent and employees attempt to move up the value chain.

Salary rises

Salaries in certain sectors of the Irish jobs market are expected to increase by 5-10 per cent this year, with increases of 15-20 per cent likely for certain in-demand skills, according to a report last week by recruitment firm Morgan McKinley.

The company said it had witnessed an unprecedented 56 per cent increase in registrations last year, a reflection of the increased appetite for switching roles.

Trayc Keevans, global FDI director at Morgan McKinley Ireland, says there are two factors at play. Some employees are seeking better pay and conditions while the labour market is tight and there are less overseas candidates vying for positions.

Other people, she says, are attempting to change the way they work, becoming self-employed contractors in order to better control and direct their own work and hours.

“That only happens when the market is hot,” says Keevans. The latter preference has traditionally been popular with techies but “now it’s right across the board”, she adds.

Much of the Great Resignation narrative emanates from the US but most of the data points there reflect a churn rather than an exodus. A record 3 per cent of the US workforce – 4.5 million workers – quit or voluntarily left their jobs in September.

At the same time, employers there posted a near record 10.6 million job openings or vacancies.

Employee attrition is undeniably part of the post-Covid unwind but so is increased labour demand, even in the restricted sectors. Workers may be rethinking how they work or where they pitch themselves, but they’re not leaving the labour market, as some commentators contend.