Great Resignation Phenomenon in Italy and Europe: data and causes of labor market change

Culture - October 18, 2022

Over the past two years, the labor market has undergone several changes, some unexpected, around the world. There have been two phenomena, only seemingly opposite and not reconcilable: Large resignations and increased demand from companies. On the one hand, therefore, are those who have chosen to radically change their lives and leave their jobs, and on the other, those who are offering jobs and seeking to expand their workforce, finding, however, no match. But why does this happen? What are the causes?

A dialogue, that between resignation and hiring, intermittent and cumbersome

The Great Resignation phenomenon took off in the summer of 2021 in the United States, when, looking at data from that August released by the U.S. Department of Labor, 4.6 million Americans left their jobs. Over the months, the trend has spread globally. The reasons? Searching for stimulation and new opportunities, dissatisfaction with wages and work ehours, mental health challenged, and a desire to recalibrate work-life-balance. Certainly the pandemic has had a major impact, but, as will be seen below, labor market transformation is a process that began some time ago.

In any case, Eurostat data regarding employment on the European territory, dating back to July and referring to the first quarter of 2022, indicate that, overall, the employment rate is 74.5 percent (female workers aged 20-64), thus a +0.5 percent compared to the same period last year. This is a very interesting number because it determines a steady growth that bodes well, especially after two tribulating years affected by the pandemic. However, it should be considered that in many countries – such as Italy – the administration of fixed-term contracts is on the rise; therefore, it can be asserted that this is an illusory growth, because it is based on precariousness. This numerical parenthesis also includes the consequences of the Great Resignation phenomenon.

Net of facts, it must be said that the mixture of fixed-term contracts and people’s desire to find a new work-life-balance goes to generate a confusing and not at all rosy picture. It is clear that in some states the problem is more pronounced than in others. Gallup, a U.S. research institute, has called this situation a “Great Reshuffle.” The institute recently found that in Germany, for example, four out of ten Germans would leave their jobs if they could; moreover, 40 percent of the sample surveyed say they are looking for a new job, so they are looking around. This indicates strong dissatisfaction, despite the general growth.

In addition, it is shown that 38 percent of the workers involved no longer support the stress and pace dictated in the workplace.

This is a condition in which many female employees and employees from other countries also find themselves.

Another survey produced by Lifeworks, a Canadian platform, also gives an account of this. The study shows that in Italy, France, Poland, Spain and the Netherlands, the mental health of 41 percent of respondents is at risk due to work; therefore, the desire to change one’s daily routine and achieve an acceptable work-life balance also goes legitimized.

Euronews in this regard writes, “The exodus from the workplace did not decrease when life stabilized in the new post-pandemic normal, if anything, new circumstances were added to the reasons why people are not happy to stay in a job that does not offer them enough.” This shows that the culture of work and approach to work itself is not experiencing a transient change. The same paper also reports on a survey conducted by accounting firm PricewaterhouseCoopers, PWC of 52 thousand workers spread across 44 countries, from which it is determined that one in five respondents plan to change jobs within the next twelve months, most for better pay. More than a third of respondents also plan to ask their employer for a raise. Almost all believe that the change should also be about lifestyle. A trend therefore established.

Two different perspectives

Going into the equation, then, is the growth in demand from companies. But why can’t people hire, even though it is a need also shared by job seekers? There are many causes; according to the various studies prepared on the subject, where workers are being questioned, it seems that the demands made by employers can no longer be reconciled with the needs of those who want and need to be hired. It is no coincidence that some countries are testing the four-day work week and trying to normalize the condition of agile work. In addition, significant critical issues are the type of contract administered and the salary.

If even before the pandemic and rising inflation, a consequence of the conflict in Ukraine, the prospects for growth, especially for younger people, were not reassuring, today the situation has profoundly changed, defining itself in an even more negative sense.

On the other hand, many companies feel that they cannot hire because they cannot find qualified personnel. That is: there is no shortage of applicants, but those who do participate in the selections present skills that are not suitable for the vacant position. Viewed from that perspective, everything changes. The matrix is no longer the desire to disrupt the approach to work, but the “poor” quality of training. Given the ongoing digital and ecological transition, it is obvious that companies are looking for profiles skilled in this regard, who can cope with the new market demands.

A study, titled “Leftover jobs and unemployment between past and future,” conducted by Randstand in 2021 reported that for 58 percent of companies in Italy, the biggest problem when hiring lies in the technical and scientific deficiencies of candidates. In addition, it pointed out that 34 percent of job searches in 2021 yielded nothing; thus, the dialogue between employer and candidate was found to be intermittent, cumbersome and basically a waste of time.

A critical situation: Italy, its NEETs and the Basic Income

Speaking of training and policies aimed at job placement, there are two issues that have been most discussed and addressed in Italy in recent times: the ever-increasing number of NEETs, or young people between the ages of 15 and 29 who are neither studying nor working, and the management of the Basic Income. In the first case, it is Istat, Italy’s statistical institute, that confirms that there are more than two million young people who are neither engaged in education nor in employment. This is a discouraging figure that implies revisiting not only family policies (often girls and boys cannot afford to attend schools or universities due to the unstable economic condition of families) but also those aimed at training. We are talking about people who should have the tools to be able to access the world of work, bridge an important gap, and who should be able to approach the future without having the fear of not being able to overcome important obstacles such as the cultural gap with other countries or the inability to meet expenses, even essential ones.

In recent years, in certain cases, failure to approach commitment to study and unwillingness to put themselves out there to seek employment have been blamed on Basic Income. The last general elections saw the victory of the center-right led by the trust expressed by voters in Fratelli di Italia: this is relevant to the discourse since in the program disclosed by Giorgia Meloni’s party it is determined to replace the Basic Income “with more effective measures of social inclusion and with active policies of training and insertion in the world of work.” A very specific thought that intends to solve a critical and complex condition, concretely turning its gaze to the future of the world of work as an instrument of social inclusion.