The Great Resignation — Causes, Effects, Impact

What is the Great resignation?

The Great Resignation (occasionally called the "Big Quit") is a socioeconomic trend that began in early 2021 when people resigned from their jobs around the same time. This phenomenon happened in the United States but was also noticeable in other countries across the globe. The sectors most affected by the great resignation were essential services (frontline workers), the hospitality industry, healthcare, and the tech industry. 

Although the Great Resignation occurred across the United States, specific industries were affected more than others. Essential frontline workers in lower-paying roles do not have the option to work from home or quit their jobs. They had to continue to work to pay for everyday living expenses. On the other hand, the highest increase in resignation was among people aged 30-45 in white-collar roles. These mid-career employees were in a much better situation and had the freedom to resign without worrying too much about securing a new job.

women stressed at work and wants to quit job great resignation


The Great Resignation can be attributed to a variety of different factors which all led to the perfect storm. Many of the causes were already slowly surfacing; the pandemic acted as a catalyst that became the tipping point.

Pandemic Fatigue: The pandemic affected all of us, but some more so than others. With lockdowns, social distancing, isolation, and overall less socialization, it is difficult to find joy and happiness out of the “new normal.” This fatigue eventually leads to burnout, causing people to leave their job. 

Job Security / Uncertainty: The pandemic affected certain businesses and industries more than others. While local businesses and the hospitality industry struggled to stay afloat, the tech companies, digital products and services, and e-commerce grew exponentially during the pandemic. For the struggling businesses, things were unpredictable; business revenue dropped drastically, lockdowns and re-openings were constantly changing each week or month, and a growing concern for job security. All these aspects of uncertainty just added more stress and anxiety. As the pandemic dragged on, mental limits wore thin, and many eventually reached their tipping point. 

Remote Work / Work from Home: Work-life balance has been an ongoing topic for a while, but the pandemic has made it come under the spotlight now more than ever. Working from home gives you a sense of flexibility and freedom; there is no commute, you are not trapped in an office all day, and you can break up your workday with more breaks (or distractions). It also allows you to spend more time with family members or pets. On the other hand, working from home blurs the lines between our work and personal time. For some people, it feels like they never really leave work. Some companies issued a return-to-office mandate, while others switched to a hybrid model or a fully remote workplace. Depending on which side of the spectrum people fall under, they may decide to quit their job if it can not provide the balance they seek. 

working from home man using laptop for zoom call with work colleague

Work Culture: There is no doubt that many companies have lousy or even toxic work cultures. During these difficult times, empathy and compassion are essential. Having a great work culture can help reduce the burden and lift spirits a little bit. This realization does not happen overnight or during the pandemic. Previous research studies have shown a positive and significant correlation between the impact of organizational culture on work commitment, job satisfaction, and retention. For companies with poor or non-existent work culture, employees will be even more unhappy and disengaged—deciding to resign is an easy choice. 

Organizational Alignment with Individual Values: Offering a high salary just does not cut it anymore. Employees desire to work for a company that shares similar values. Millennials, in particular, value organizations that have a positive impact on society. Rather than being as efficient as possible, making continuous improvements, and maximizing profits, millennials believe long-term, sustainable growth is achieved by putting people first (employees and customers). Millennials want to make their organization the best place to work by providing employees with good income, investing in their skill development, and creating a positive impact on peoples' lives. When the pandemic hit, many organizations faced a challenging question: Do you put your profits or your people first?


Having a large mass of people quitting their jobs altogether comes with immediate effects that organizations must adapt to; otherwise, they will struggle to survive. Management and human resources will have to re-think how they currently manage their talent acquisition and employee retention. 

Labor Shortage: While this is a blatant effect of the Great Resignation, there are various additional implications. Workers who stayed at their companies had to take on a heavier workload until a new person filled the role. However, since there is a labor shortage, finding and recruiting the right person for the position may take much longer than expected, putting a heavy burden on the team and other staff members.

Domino Effect: Occasionally, people think about quitting their job; even though the thought crosses their mind, they are usually unlikely to do it. However, when they hear chatter about others wanting to leave the company, the idea evolves into a consideration. When a colleague finally decides to resign, the thought of quitting becomes more of a reality. So when one person leaves, others start contemplating quitting, thus creating the domino effect. 


Although the Great Resignation seems to have subsided, the trend of quitting will continue in 2022, but to a lesser extent. While the long-term impacts have yet to be known, there has been a significant shift in how people and organizations view work. The Great Resignation gave individuals a period of reflection to think about what they want to do with their lives and careers; some call these “pandemic epiphanies.”

three women in meeting room having interview discussing work terms

Future of Work: There is no denying that society's perspectives on work will change forever. The labor shortage has changed the way organizations view hiring and recruitment, work culture, and staff retention. New policies, benefits, and work terms will have to be changed to satisfy the needs of the changing work environment. For the first time in history, the power belongs to the workers. Job seekers can negotiate higher salaries, better benefits, flexible work hours, and work terms. Some companies have taken a proactive approach by offering 4-day work weeks, fully remote work, and additional paid time off for employees to use at their discretion. 

Career Changes: After quitting their job and reflecting, it is no surprise that many people contemplate career changes. Whether they want to change the type of work they want to do within their field or completely switch industries, people have become more aware of themselves and their work. Instead of settling for a job that pays a good salary, individuals desire to be more intentional and purpose-driven. They want to do work that is meaningful and creates a positive impact. 

Personal Finance: When you do not have a steady or stable source of income, you are bound to become more conscious of your money and spending habits. When you track your expenses, you begin to realize how wasteful some of your purchases can be. This realization creates a shift towards more minimalist living; buying a new pair of shoes becomes less appealing, your morning coffee run becomes a nice french press at home, and eating out (or ordering in) constantly becomes more home-cooked meals. With all these savings, you begin thinking about what you want to do with your savings—invest it. Although personal finance has not become mainstream yet, more people are becoming aware because of the growth of media coverage of related topics such as the Gamestop incident last year, the housing market boom, and the rise of cryptocurrencies like Bitcoin. 

laptop on table with web designers personal website displayed on screen

Multiple Income Streams: Our digitally connected world has enabled us to start an online business with low startup costs. The pandemic has forced everyone online and accelerated the digitization of customer interactions by four years. The Great Resignation gave people the opportunity to start that side hustle that they had in the back of their minds. People are making websites for their online business, offering creative services such as graphic and web design, selling products via e-commerce channels, creating online courses and e-books, and many other digital products and services. There are numerous ways to generate income outside of the typical forms of employment. The best part is that these online businesses usually do not require large amounts of technical skills or knowledge to start. If you are not familiar with it, there is an abundance of online resources and low-cost courses that you can take to learn the fundamentals. 

The Great Opportunity

While most employers view the Great Resignation as a crisis, forward-thinking organizations view it as an opportunity to re-evaluate their organizational structure, internal policies, hiring practices, and work culture. On the other hand, individuals have the opportunity to reassess their lives and careers. Now is the time to think about what you want to do with your life. Filter out all the unnecessary distractions in your life and think deeply about your long-term vision and goals. Spend some time learning about personal finance, developing that business idea you had in mind, or acquiring new knowledge and skills for a new area of interest. Whatever you want to pursue, now is the time to do it.