Last year, American and European human resource managers noticed an unusual trend in the labor market—high “quit rates” in the labor market, meaning more workers leaving their jobs compared to the situation in earlier years. Accordingly, the rates exceeded the 2.5 percent maximum recorded in previous years. In Germany and in some American states, the rates went up to as high as 6 percent.
HR managers and labor market analysts promptly dubbed the high quit rate phenomenon as the “great resignation.”They uniformly attribute this phenomenon to Covid and the business/organizational changes the pandemic caused in the corporate world. Most of the job quitters are either millennials or members of Generation Z.
There are four groups of job quitters:
The first group consists of those able to switch to remote work. Working from home has enabled them to avoid dressing up for office work and staying 8-to-5 in enclosed high-rise buildings. There is a sense of “liberation” in being able to do remote work at home or anywhere convenient to an online worker, such as a Starbucks coffee shop. The prospect of being asked to go back to the old working set-up is dreadful to those who have gotten used to flexible online work arrangement. Covid lockdowns have also created opportunities for these workers to re-think their careers and to re-imagine what is the ideal work-life balance for themselves and their families.
Another group is composed of workers who fear getting infected through face-to-face interaction with patients or customers. These include the health workers, mostly nurses and hospital orderlies, and workers in the service industry requiring in-person interactions such as the service crew of restaurants and fast-food chains.
Mental stress is the reason given by the third group. There are numerous stories on how Covid and the series of lockdowns affected the psychological outlook of young workers. They suffered periodic bouts of pandemic fatigue, depression and anxiety. There are even reports of a spike in suicide attempts by distraught and disoriented workers.
The fourth group is made up of those who are simply unhappy with their jobs because of low pay, harsh working conditions, dreary nature of the tasks assigned to them and personal and work problems that they have at the work sites.
The “resignation” of the above workers is facilitated by the strong safety net in place in developed countries. Full health insurance, unemployment benefits and other welfare programs enable some workers to go jobless for a few months or longer.
Now what is the situation in the Philippines?
This writer interviewed some HR managers who are following the global HR discourse on the so-called great resignation phenomenon in the OECD countries. Their opinion: the high quit rate trend would have happened in the Philippines had the economy been robust and the labor market tight. The quit reasons in the global North—work flexibility under work-from-home arrangement, infection avoidance, mental stress and unhappiness at the work place—also obtain in the global South. In fact, resignations based on the foregoing reasons have been happening. But not at a rate similar to what is happening in the developed countries.
The reality is that many workers cannot afford to lose jobs in a job-scarce country like the Philippines. What is happening is not great resignation but “great renegotiation,”another buzz term coined by Western HR managers to describe those unhappy with their jobs and yet unprepared to resign for economic and other reasons.
Great renegotiation is common in buoyant industries employing skilled and mobile workers. This is particularly true in the case of the call center-BPO sector, which remained robust in 2020-2021. Many IT/ICT workers have been undertaking individual and group negotiations with their employers on possible improvements on compensation, work conditions and so on. Despite the absence of unionism in the call center-BPO sector, the workers are able to undertake such negotiations, formally or informally, individually or collectively, with the facilitating help of HR and employee relations managers in the sector. Some of the issues taken up: special allowance for Internet and power usage at home, retention of the work-from-home arrangement, etc.
The problem is that majority of the wage workers are not as empowered as the IT/ICT workers in the call center-BPO sector. In the 2020-2021 series of lockdowns, what happened in a large number of manufacturing companies and service establishments was a “great furlough.”Workers were not outrightly dismissed despite company losses or temporary closures or downsized operations. They were simply classified as workers on temporary leave without pay.
This great furlough phenomenon is likely to become a continuing one. Certain segments of the formal sector of the economy such as those in the hotel and restaurant industry, tourism industry, light manufacturing and so on are still unable to recover to their pre-Covid level. With inflation rearing its ugly head and with the world economy rattled by the Russia-Ukraine war, the Philippine economic recovery is likely to stall and bring in more uncertainties in the labor market.
Under this emerging economic scenario, the focus of the workers, organized and unorganized, will likely be a negotiation for the retention of jobs and a call for a halt to furlough unlimited.
Dr. Rene E. Ofreneo is a Professor Emeritus of the University of the Philippines. For comments, please write to reneofreneo@gmail.com.