What is the Great Resignation Phenomenon?

August 29, 2022

The world of work is far different today than it has been at any point in history – and this phenomenon is being keenly felt in every industry and vertical one can imagine.

As technology hurtles towards greater automation, optimisation and digitisation, a combination of the global health crisis and a profound rethink in humankind’s collective viewpoint on what their working lives mean to them have all converged into the Great Resignation, a term coined first by Anthony Klotz, associate professor of management at Texas A&M University.

This social phenomenon and workforce shortage is a more complex dynamic than its catchy nickname may first cause it to appear. Not only are the drives inspiring individuals to quit the working world manifold indeed; but the knock-on effect this all has on logistics and the supply chain are compounding industries already under remarkable duress.

Understanding the Great Resignation at large

As the new decade dawned and the West watched in horror as tales of a novel new virus in China and Asia became stark warnings to the planet as a whole, nobody could have predicted how disruptive to the supply chain Covid-19 would be.

Indeed, it continues to contribute to a global workforce shortage even today – yet the blame cannot be placed at the feet of the pandemic alone. As news from Europe makes apparent, the workforce shortage dynamics shaping every industry are being keenly felt – rendering 3% of the entire continent’s job vacancies unfilled as of autumn 2022.

Yet despite the alarm bells often sounding over global economics on the world stage today, it is not the fear of recession or the rising cost of living driving The Great Resignation forward. Those individuals contributing to the Great Resignation are not the recently laid off, suffering the collapse of their businesses or forced into leaving their careers due to unfavourable health circumstances.

Instead, the Great Resignation signifies a global shift in how individuals identify the role that work plays in their lives. In those instances where over-demanding positions with poor pay and poor job security are concerned, such as hospitality, retail and indeed some elements of the logistics industry, the choice to quit and its resultant workforce shortage has been a direct declaration of simply wanting more from life.

In many instances, those who contribute to the Great Resignation do so to take early retirement. People in their late forties, early fifties and upwards, feeling they have more than contributed to a society that they intend to enjoy after the pandemic has shown the fragility of our civilisation, are coasting on handsome savings and enjoying peaceful existences.

Other motivators behind those who choose to quit work within the Great Resignation are more cynically motivated. In many cases, especially in the United States, where the term ‘Great Resignation’ was first coined by Anthony Klotz, the ongoing workforce shortage speaks to a deep dissatisfaction between corporate America and workers, dissatisfaction observable in many other countries around the world.

Famously decried under mantras of ‘nobody wants to work any more’ and worse, the reality is that workers want to work, but meaningfully so. The key is feeling appreciated at work – a notion problematic enough to many areas of industry worldwide that they would sooner turn to automation, such as in the USA.

How the Great Resignation is compounding global supply chain challenges

The explosive growth of ecommerce informed by the pandemic was just one of many influences that contributed to unprecedented pressures on logistics and the international supply chain – and it often seems like new crises are bubbling under the surface every week.

From new and unexpected raw material shortages to shifting sociopolitical factors impacting how easily goods can cross borders, a constant that is nonetheless underpinning the woes of the global supply chain today is undoubtedly its continuous workforce shortage.

Much of the work in the logistics sector is physically challenging, mentally demanding and – regrettably – not as well compensated as many workers would like. With profit margins consistently being squeezed for supply chain organisations, the notion of upping wages in such a harsh economic climate often is an untenable forward step.

In many ways, proponents of the Great Resignation participate not because they can exist in financial comfort by not working, but because they believe that if the choice is to not work and experience financial hardship, or to work hard for long hours and still experience financial hardship, what logic is there in working?

It is dangerous and perhaps over-reactionary logic, yet it informs much of the workforce shortage being felt in key industries today – the supply chain included. Look no further than the manufacturing powerhouses of Asia for the seeds of dissatisfaction, as they continuously bloom. The famous ‘Lie Flat’ workforce movement of China, in which minimal effort to one’s job is extended much like the Quiet Quitting phenomenon in the West, is now evolving into ‘Bai Lan’, or ‘Let it Rot’ – a proactive yet non-confrontational rejection of overworking and strenuous labour altogether.

As ever more young people seek to quit consumerist culture, the value they provide to the labour market of logistics and the global supply chain is being keenly felt. With China and neighbouring nations proving such an infrastructural backbone of manufacturing, raw material procurement and international trade, the workforce shortage that offshoots of the Great Resignation continue to inspire in that continent – and others – is only piling on the pressure onto lead times worldwide.

As any supply chain veteran knows, a single weak link in any logistics interplay can have disastrous consequences if mismanaged. Yet the scale of the Great Resignation, and the complexities already affecting the international supply chain that it exacerbates, is often drastic enough a challenge to elude even the most skilled business leaders’ acumen.

The bad news is that the workforce shortage is unlikely to go away, and will continue to play a role in logistics and other industries – retail, hospitality, manufacturing and plenty besides – in the coming months and years.

With that in mind, are the best solutions to simply extend the hands of friendship across the divides in desires between employers and employees? Perhaps – yet solving the Great Resignation in this way will no doubt prove a long, arduous but certainly worthwhile road.

For organisations seeking to master logistics in an incredibly dynamic market, while sidestepping the complications of the current workforce shortage in supply chain roles at large, the answer lies in innovation, optimisation and the growing trend towards digitisation.

Logistics organisations can compensate for the Great Resignation

Few of us can say that we were ready for anything near the sense of dissent and disruption that the Great Resignation has imparted on the working world of today. Yet while many industries continue to grapple with a workforce shortage spearheaded by an increasingly demotivated labour market, the supply chain and logistics verticals of the world are fortunate enough to have strategies at hand for greater optimisation.

As with much of the evolution of logistics today, digitisation and automation are playing increasingly robust roles in not only breaking new ground for logistics efficiency as a whole, but also circumventing many of the complications wrought by the Great Resignation overall.

There are a few key considerations behind why this is so abundantly the case. The first is that, as Generation Z continues to follow technologically confident Millennials into the workforce, digitisation is not simply an innovation in supply chain work – it is more or less the expected state of play.

In other words, such employees expect to work in largely paperless environments, coordinate their efforts via largely asynchronous and results-driven workforce and task management software platforms, and altogether raise an incredulous eyebrow at the likes of paperwork, spreadsheets and bureaucracy as a whole.

Naturally, the supply chain is not as simple as such aspirations may want it to appear. For example, the simple action of any product or raw material crossing the border from one nation into another is an incredibly complicated happenstance, with absolutely no margin for error.

Yet with digitisation and automation taking on the brunt of much of the busywork that goes into customs compliance in the logistics and supply chain sectors, a good supply chain software solutions provider can help organisations streamline such operations – while building on worker engagement beside being user-friendly with no heavy effort for onboarding.

In parallel with this, the advent of greater automation and digitisation in supply chain procedures and processes reduces the margin of human error – but also the need for human involvement whatsoever. Put simply, if the worker shortage continues to make certain kinds of labourers or knowledge workers absent from the supply chain, automation is stepping in to simply conduct many of their long, manual, repetitive tasks instead.

Ultimately, while digitisation and automation offer remarkable ways of streamlining operations for logistics players worldwide, it is down to each organisation’s interpretation and strategy to overcome the Great Resignation to decide how best to deploy such resources for the optimal effect.

Whether you are an enterprise looking to reinvigorate an exhausted labour force with the assistance that digitisation provides; or a business leader in search of automation to help you cross ever more complex borders in a more effortless way as your contemporaries see their workforce quit around you, there is every reason to see how automation in the supply chain can help you move forward.

Romain Fayolle

Co Founder & Managing Director

Strong with 8 years of experience in different international industries, Romain wants to connect Logistics & Supply Chain leaders and professionals with the game-changing technology