The Great Resignation

Adam Ozimek, Upwork Chief Economist

Amidst much of the chaos and uncertainty of the COVID pandemic, the spring of 2021 ushered in a new challenge for businesses: a flood of workers quitting their jobs. Far from being a short-term trend, workers are continuing to leave their jobs by the millions—according to the U.S. Bureau of Labor Statistics, the number of quits rose to 4.5 million this past November. And while the exodus has been concentrated in service industries, companies and organizations whose ranks consist mainly of knowledge workers are not immune to the effects of the Great Resignation.

The pandemic helped propel this trend; frankly, without it, there would be no Great Resignation. One of the main reasons is because the social distancing efforts and other public health measures introduced in March 2020 marked a massive turning point for businesses and professionals around the world with the sudden introduction of remote work.

For the first time, professionals didn’t have to endure long commutes to trek to an office or were no longer chained to the rigid nine-to-five work schedule. Despite other pandemic-related stresses and issues such as childcare and homeschooling, many people saw the value and benefits of a work-from-home lifestyle. They enjoyed the newfound flexibility it introduced to their schedules and the improved work-life balance it provided. This widespread shift to remote working helped many millions of workers reprioritize aspects of their lives in ways they couldn’t have imagined with an everyday office job. It gave them a degree of power and control they never had before, helping millions realize the way they had approached work in the past wasn’t the only way.

Fast forward to spring 2021, a year into remote work. As vaccines became widely available and the spread of COVID-19 temporarily subsided, businesses began to address their return-to-office plans. Many businesses wanted to try to put the genie back in the bottle, returning to the pre-pandemic status quo. While some brought their staff back in the spring, others expressed plans for a return in the near future. The return to work plans were met with resistance and pushback on the part of many. People everywhere realized that they could retain more control over what their lives looked like, working from anywhere. It ultimately became a catalyst for millions to either call it quits, or begin planning to quit. 

Upwork’s research report released in August 2021, The Great Resignation, quantified this level of discontentment with the return to the office. We found that 34 per cent of workers who were remote for most of the pandemic were not excited about returning to the office, compared to 24 per cent who were. The numbers show that for those who were not excited about the return, remote work was an incredibly important factor. Among those who were not excited about returning to the office, one-quarter were willing to take a pay cut to work remotely, while 35 per cent were willing to consider it. The data shows that the Great Resignation is fuelled in part by the push by employers for a return to the office and the resistance on the part of workers to this attempt. Our research found that 17 per cent of professionals working remotely during the pandemic would probably or definitely consider looking for a new job if they had to return to the office. That represents nine million workers in the U.S. The world of work has changed drastically and it’s clear that a significant portion of the labour market isn’t willing to go back to the old way of doing things, and it's having a ripple effect into other aspects of our professional lives.

Remote work may also have democratizing effects, which could be influencing workers’ preference for staying out of the office. According to a recent Slack survey, Black professionals working remotely reported having significantly higher satisfaction with their jobs and half reported an increase in feelings of belonging at their organization. This is likely due to the fact that office environments can be disadvantageous for minorities—and with so much importance being placed on the values of equity, diversity and inclusion today, organizations should consider these realities and their impacts. A return to the office means losing many of the benefits that workers have become accustomed to over the past two years. 

Much of the research reveals an interesting twist though: the Great Resignation isn’t just about people quitting one full-time job for another. In many cases, they’re walking away from traditional employment altogether because they’ve realized that traditional full-time employment isn’t the only way to make a successful living. Instead, they’re embracing freelancing and turning to platforms like Upwork to build their careers and develop client relationships.

Our research found that 20 per cent of those who worked mostly remotely during the pandemic, or 10 million Americans, are considering freelancing. Among those, nearly three-quarters—73 per cent—cite the ability to work remotely or flexibly as the driving reason. Remote work gave millions of people a taste for a level of control and flexibility over their work day that many aren’t willing to give up. They could be just as effective and just as productive, not to mention happier and healthier, working remote. And what’s more, they’re looking to freelancing as a means of taking control of their work life—the ability to set their own hours and rates, choose their clients, scale their own workload and ultimately do what they enjoy the most. And when freelancers work remotely, as many do, it means eliminating costly and time-consuming commutes, the ability to better balance caregiving responsibilities, the freedom to spend more time with their families, more control over their day-to-day schedules and the ability to work from anywhere.

In turn, companies are starting to discover the previously untapped potential of freelance talent. With so many workers quitting their jobs at the same time, businesses are feeling the pinch of talent shortages. Remaining staff are overworked, overwhelmed and facing burnout and companies are dealing with downtime, missed deadlines and challenges meeting their goals. In response, we’re seeing a rise for on-demand remote talent to fill those gaps, with many companies turning to platforms like Upwork for solutions. Upwork’s freelance professionals boast 10,000 diverse skills — everything from software development to marketing to videography and other creative services Upwork’s Future Workforce Report shows that the pandemic accelerated remote freelancer adoption among businesses. As a result of the pandemic, over half—53 per cent—of businesses say that remote work has increased their willingness to use freelancers, with 71 per cent of hiring managers planning to sustain or increase their use of freelancers in the future. 

Professionals who are looking to make the switch from fulltime to freelance can find reassurance in those figures. It seems that much like the Great Resignation, the trend toward freelancing, and the corresponding demand, isn’t likely to slow into the future.

That’s why businesses that aren’t embracing remote work and freelance talent are going to risk falling behind. The desire for flexibility among professionals is already reflected in changes that are underway in the labour market. As we exit the pandemic economy, employers will be increasingly facing a new reality in which workers have more bargaining power in the market.  As businesses face the pressure of attracting and retaining talent, they will increasingly need to ask about the wants and needs of the professionals that they are struggling to hire and retain. This demand for flexibility will be an inevitable piece of the hiring puzzle—without it, businesses will miss out on the talent that desire remote work arrangements and the entire talent pool of on-demand freelance professionals. 

The rise of remote work has transformed so much of our lives over the past two years, including the rise of the freelance industry, and this is likely to continue into the future. Remote work helped show many businesses that they can and should think about their workforce as more than just full-time employees. Instead they need to view this disruption as an opportunity to tap into the on-demand talent pool and adopt the flexibility necessary for their business to remain sustainable and successful in response to a changing labour market.

Many workers have adopted a different outlook on work. To stay relevant, businesses need to adopt a different outlook on talent, or risk being left in the dust of the Great Resignation.