The Great Resignation: Symptom of a Bigger Change?
We will realize how transformative the years 2020 and 2021 have been for our personal lives, careers, and the economy at large only when we look back and reflect in a decade or so, it seems. The health concerns, recurring lockdowns, uncertainty surrounding the business environment, employees waiting in suspense for the clouds to clear out, chip shortages, the unraveling supply chain chaos… We have witnessed more change and drama in just two years than we would expect to see in a generation.
We have drawn attention to some of these drastic changes in our previous blog posts. Freelancing has been on the rise for quite some time. Some people chose to become digital nomads, setting off with a backpack, setting up camp in exotic places, and working from there. Then "the Great Exodus" happened—tech workers started to leave the Bay Area, where life can be rather expensive, for places like Miami, Atlanta, or Austin, where they can find more affordable housing.
The most drastic of such changes took longer to attract attention and grab headlines, but it will probably be the most fateful among them in terms of consequences. We are talking about the Great Resignation, a recent trend of people leaving their jobs and refusing to return to the workforce. Stats tell us that 11.5 million workers quit their jobs in April, May, and June 2021. 4.4 million workers in the U.S. quit their jobs in September alone. Unsurprisingly, the health industry, which has borne the brunt of the fight against the pandemic, had the highest number of resignations. The tech industry was in second place, with resignations in 2021 increasing by 4.5 percent over the 2020 figure.
The most interesting point about the Great Resignation is that it does not fit the pattern we observed in the previous economic downturns. With economy contracting and job opportunities disappearing during an economic downturn, employers usually have the upper hand vis-à-vis the employees. The latter cannot afford to risk unemployment during an economic downturn. Instead, they bite the bullet and try to ride out the storm, no matter how unhappy they are with the working conditions. This time, things have panned out differently, though. Having done well financially in the last decade and having access to better social security and stimulus payments during the lockdowns, people in the tech industry were better positioned to say “no” to working conditions they no longer found agreeable.
People generally quit their jobs primarily for tangible reasons like low compensation or a better opportunity elsewhere. However, millions of employees coming to the conclusion that they deserved better pay over a few months sounds rather implausible. A more plausible explanation would be the pandemic’s impact on the way people saw life and what they wanted from it. Stuck at home, worried about the future, and reevaluating their priorities, people engaged in some kind of soul-searching during the lockdowns. They are keener to balance work and family and demand remote or at least hybrid work arrangements now. Companies that did not offer their employees remote work possibillity were the first to lose workers. That some companies made rushed decisions and laid off employees in order to further cut costs alienated members of the workforce. People were once again reminded that corporate decision-makers could act selfishly without any regard for the well-being of their employees in moments of crisis.
Another fact is that people have come to take their health more seriously during the pandemic. They simply decided that the grind of office life with its long commutes, accompanying stress, and little chance for physical exercise was not worth it anymore. The majority of software developers who quit their jobs are senior developers aged between 30 and 45. Being financially secure and already fed up with the corporate world, these people seem to have found the courage in themselves to chase their dream jobs or even start their own businesses that could bring some purpose to their lives.
That experienced software developers have been leaving their jobs to start their own businesses ties in well with the latest figures regarding startup funding. U.S. startups raised a total of $240 billion in only the first nine months of 2021, which is 45 percent more than the $166 billion funds invested in the U.S. startups in all of 2020. Recognizing the abundance of capital in the markets, some software engineers must have decided to put their talents to work not to enrich other people but to realize their own projects.
It is safe to say that the booming SaaS ecosystem and the proliferation of low-code/no-code platforms have made it easier for startup founders to attract investment. SaaS companies have recently productized many services such as website design, payment processing, and email marketing, which every newly-established business needs nowadays. Software engineers can also deploy low-code/no-code platforms to automate the tedious parts of their work, quickly whip up proofs of concepts, and put together an MVP without having to spend months.
These two developments mean that developers no longer need to bring together crowded teams of experts to try their luck in entrepreneurship. Using a tech stack of existing SaaS products and low-code/no-code platforms, this new breed of entrepreneurs enjoy a shorter time-to-market than it was ever possible before.
With the introduction of no-code templates, we can expect more business ideas to come to fruition in the near future and startups to raise even more money. The number of unicorns, private companies with a valuation over $1 billion, stands at more than 800 as of November 2021, with more than half of them joining the list in 2021. You can bet that this number will surpass 1000 in the first half of 2022 as more entrepreneurs start to leverage the no-code technology to turn their dreams into reality.