NO `GREAT RESIGNATION' IN THE GREAT WHITE NORTH
Despite anecdotes of Canadians resetting careers during pandemic, data doesn't back up a major trend
It's not so much a `Great Resignation' but a `Great Rethink' or a `Great Reconsideration' of the type of work that people want to do. David Coletto, founder and CEO of Abacus Data.
A year into the pandemic, Dave Edwards left his corporate job of almost 20 years at a major bank to pursue a “passion project” at a Toronto startup, where he can combine his love for biking with a paycheque, albeit a smaller one.
Months of remote work led Edwards to make this “financially risky” decision. “I couldn't see myself continuing on just staring at a screen and spending eight to 10 hours a day in Webex meetings while emails pile up,” he said. “It became pretty clear to me that it was never going to likely stay the same as it had been previously.”
Now, Edwards is the director of operations and a part-owner of Nrbi (pronounced “nearby”), a logistics startup that uses electric cargo bikes to provide delivery for businesses in Toronto.
“I've had a longtime interest in this type of mobility in cities, a movement away from car dependency,” he said. “So combine that with reaching my mid-40s and having a move to the online world at a job that I wasn't completely in love with. I thought that was the time to take a chance.”
Stories like these became so prevalent during the pandemic that they spawned a bigger narrative: the Great Resignation, a term U.S. academic Anthony Klotz uttered in passing during an interview with a Bloomberg reporter in the spring of 2021. The phrase went viral, to the point that the Great Resignation now has an entry at Wikipedia and Dictionary.com.
Klotz based his theory on four observations: pent-up resignations from the first year of the pandemic, when much of the world was hunkered down; mass burnout; the theory that when confronted with death, people tend to reflect on what really matters to them; and the unexpected freedom that came with working from home. Klotz, an associate professor at Texas A&M University at the time, predicted a “great resignation” before it was obvious in the data. But the U.S. government's statisticians would catch up, eventually documenting elevated rates of job leaving.
While there are many anecdotes of Canadians such as Edwards leaving their jobs in the middle of the pandemic, that's where the similarities with the United States end. Data show that job-changing rates among Canadians are mostly similar to pre-pandemic levels, indicating “a return to normal” rather than an increase in resignations.
According to Statistics Canada, there is little indication that tight labour market conditions nor concerns about quality of employment, such as work location, led to an increase in workers voluntarily leaving or switching jobs. The number of “job leavers” in February 2022 was lower than in February 2020, right before the COVID -19 pandemic. This number actually trended down throughout 2020 and early 2021, reaching a record low in April 2021.
“This may be an indication that factors involved in voluntarily leaving a job, such as confidence in finding new employment or the ability to relocate, remain different from what they were before the pandemic,” the agency said in a report.
The proportion of workers who remained employed but changed jobs between months was 0.6 per cent in both June and July, the federal agency's labour force survey found. This rate is comparable with the 2016 to 2019 job-changing rates, which averaged 0.7 per cent and ranged from 0.6 per cent to 0.8 per cent. A recent peak reached 0.8 per cent in January 2022.
“That's a sign of the labour market getting normal but not a real surge in job hopping,” said Brendon Bernard, a Toronto-based economist at Indeed, the hiring site owned by Japan's Recruit Holdings Co. Ltd.
This came as a surprise to Bernard. Early in the pandemic, job switching essentially stopped in both Canada and the United States. Bernard reckoned Canada might eventually see people catching up to job changes they would have done “had the whole world not turned upside down.” Instead, the labour market only returned to its normal rate of churn. In contrast, U.S. quit rates continued to increase well above pre-pandemic levels after their small bout of early pandemic decreases. The U.S. Bureau of Labor Statistics reported record-high numbers of job-leavers in November 2021 with 4.5 million workers, or three per cent of the total workforce, quitting.
To be sure, it's not possible to do a precise side-by-side comparison of the two indicators, as job-changing rates in Canada and quit rates in the United States are measured differently. And as CIBC World Markets chief economist Avery Shenfeld pointed out, the labour market in the U.S. is tighter and more inflationary than Canada's. “The whole idea that people have given up on working, that was a U.S. story, which (that country) is starting to reverse,” he said.
Rather than flee the traditional job market, Canadians have embraced work more than ever, at least according to the data. Labour force participation — the number of people who are working or report they are actively looking for work — is high, and levels of self-employment are unusually low, an indicator that workers are choosing salaries over becoming their own bosses.
“If anything, more Canadians than ever are either working or looking for work,” Shenfeld said, noting that job vacancies are at record levels. “We've had a surge of hiring as the pandemic has faded away and we've reached the point where everybody's working and therefore, businesses that don't have as generous a wage offer or the right working conditions are finding it difficult to fill those positions,” he said.
While a survey by Ottawa-based Abacus Data found that 34 per cent of employed Canadians feel “burned out,” this didn't translate to mass resignations.
“It's not so much a `Great Resignation' but a `Great Rethink' or a `Great Reconsideration' of the type of work that people want to do,” David Coletto, the research company's founder and CEO, said.
The pandemic may have forced many people in certain sectors, especially those forced out of their job amid massive layoffs during lockdowns, to rethink whether they feel they're compensated fairly, whether it's meaningful and fulfilling work and whether certain types of jobs are more stressful and not really worth it, Coletto said. “It's not so much that people are walking away from work, it's that those folks didn't want to come back,” he said.
So while there are anecdotes of Canadian job-leavers such as Dave Edwards who saw the pandemic as an avenue for a career change, this doesn't necessarily mean that a greater trend took hold in the country's labour market.