The Great Resignation – And Other ‘R’ Words
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The entire retail industry is obsessed by two challenges right now: a massively constipated supply chain, and the severe labor shortage. There’s no end to conjecture about the reasons for why people are either (1) not applying for jobs, or (2) quitting the jobs they have. I was asked about the labor problem at a supply chain conference I spoke at a couple of weeks ago; my response was to ask the whole audience how many had had a job in retail. Nearly 60% raised their hands and so I picked one friendly face and asked, “why did you leave?” Her answer: “because it was a terrible job!”
That sentiment isn’t new, but it went viral in September when a Louisiana Walmart employee resigned in a very public way. According to several reports, the disgruntled employee announced via the instore public announcement system: “I’ve been working at Walmart for almost five years, and I can say that everyone here is overworked and underpaid. The attendance policy is #!@%!. We’re treated [by] management and customers poorly every day. Whenever we have a problem with it, we’re told that we’re replaceable. I’m tired of the constant gaslighting.” This being the social media age, the whole incident was videoed and the unhappy employee has become something of a social warrior; 24 million viewers have watched the video on TikTok. According to Newsweek, “The video drew overwhelming support online with people flocking to the comments to praise her actions and echo many of her sentiments.”
It’s that kind of energy that is driving some retailers to try to create better working conditions, or at least offer better compensation packages. The question is, will that be enough? Or is something more foundational occurring? Some observers think so. In mid-October, the Atlantic magazine published an interesting piece by Derek Thompson entitled, “The Great Resignation Is Accelerating”. In it, the author posited that, “this level of quitting is really an expression of optimism that says, We can do better.”
That struck me as an interesting interpretation of the situation. One scholar, University Of California (Berkeley) economics professor Ulrike Malmendier, recently published a working paper for the National Bureau Of Economic Research entitled Exposure, Experience, And Expertise: Why Personal Histories Matter In Economics. The researcher poses the question and suggests the answer: “… did living through the pandemic alter us in the longer-run, beyond the explanatory power of changed ﬁnancial and other personal circumstances and beyond the arrival of new information? The growing research on experience effects implies that the answer is yes – that there will be long-term changes in beliefs and behavior… personal experiences are signiﬁcantly more powerful in shaping risk attitudes, beliefs, and decision-making than ‘information’.”
The Atlantic’s Thompson writes that what is really going on is “The Great Reset.” He notes that “The pandemic thrust many families into a homebound lifestyle reminiscent of the 19th-century agrarian economy — but this time with screens galore and online delivery. More families today work at home, cook at home, care for kids at home, entertain themselves at home, and even school their kids at home…”. By eliminating the <workplace> as a physical presence in many (but not all!) families’ lives, the pandemic may have downgraded work as the centerpiece of their identity.”
Thompson offers up another “R” word to explain what’s going on in today’s job market: “The Great Reshuffle”. He notes that one of the under-reported phenomenon in the age of the pandemic is that “business formation has surged since the beginning of the pandemic, and the largest category by far is e-commerce. This has coincided with an uptick in moves, especially to the suburbs of large metropolitan areas… and it may lead to a better-job revolution that outlasts the temporary measures, such as unemployment super-benefits and rent protection, that have nourished it.” If Johnny Paycheck was writing the lyrics to his 1977 hit song “Take This Job And Shove It”, it might have a verse about him creating his own company.
Finally, there’s “The Great Retirement” to be considered. According to a Pew research study, “ about 28.6 million Baby Boomers (those born between 1946 and 1964) reported that they were out of the labor force due to retirement. This is 3.2 million more Boomers than retired in the same quarter of 2019.”
What to make of all of this? The first thing that comes to mind is that blaming “The Great Resignation” on the American Rescue Plan of 2021 is intellectually lazy and inaccurate. Something much more fundamental is going on, and it won’t be solved by merely raising the minimum wage or offering signing bonuses. This has big implications for the entire retail industry. Would-be employees are making lifestyle choices in the hope of re-balancing (another “R” word!) their work/life realities. Workaholic Boomers are giving way to new generations of workers who don’t define themselves by the work they do. Young employees are demanding that more consideration is given to their family needs.
Ultimately, retailers and other enterprises that need large hourly workforces as going to have to re-imagine their operating processes. Consumers are already demanding changes; they are tired of a lousy store experience driven to a big degree by disgruntled employees.