How Will a Recession Impact the Great Resignation And Quiet Quitting?

How Will a Recession Impact the Great Resignation And Quiet Quitting?
How Will a Recession Impact the Great Resignation And Quiet Quitting?
September 7, 2022 14 mins

How Will a Recession Impact the Great Resignation And Quiet Quitting?

How Will a Recession Impact the Great Resignation — And Quiet Quitting?

A new phenomenon in which employees become disengaged — 'quiet quitting' — is drawing increasing interest.

Key Takeaways
  1. The 'Great Resignation' and 'quiet quitting' may shift labor market dynamics.
  2. Employers will need to focus on prioritizing wellbeing and resilience.
  3. The use of data empowers decision-making and can help business leaders  address resignations and poor engagement.


The past 18 months have seen a “Great Resignation” as record numbers of employees left their jobs.

A number of factors may contribute to this trend. In some cases, remote working necessitated by the COVID-19 pandemic created new opportunities. Some workers faced family care issues compounded by the pandemic. Others simply reassessed their priorities and chose a better work-life balance. Of course, many of those leaving jobs weren’t leaving the workforce entirely — they took new jobs elsewhere.

While labor markets remain tight, there are signs that the Great Resignation is losing steam. A new phenomenon called “quiet quitting,” in which employees become disengaged, is drawing increasing interest and media coverage.

But a potential recession might further reshape these labor market dynamics. For employers, the prospect of an economic downturn adds one more factor to the mix as they look to attract, retain and engage necessary talent.

“Just as organizations are focusing their strategic plans in this current environment, there will be implications from a talent standpoint,” says Mina Morris, partner at Aon’s Human Capital Solutions. “Companies may be a bit more careful about considering multiple candidates. It reshapes the pace of the activity that we saw in 2021.”

Quote icon

Just as organizations are focusing their strategic plans in this current environment, there will be implications from a talent standpoint"

Mina Morris
Partner at Aon’s Human Capital Solutions

In Depth

Though there are indications that the pace of employee turnover has slowed, labor markets remain competitive in certain areas. With so many businesses seeking technology talent, workers in this field remain in high demand, notes Stefan Gaertner, partner and global leader of the People Analytics Practice at Aon.

“Whether that means high turnover remains to be seen,” says Gaertner. “In times of economic uncertainty like this, employees stay put and appreciate what they already have.”

Another factor to watch is the impact of inflation, Gaertner says. While some employers such as large technology companies are budgeting for merit raises of 5–6 percent to keep up with market rates, those increases aren’t necessarily keeping up with current levels of inflation. They’re also likely falling short of the salaries paid to attract new hires.

“It’s possible that there will continue to be two labor markets: one for incumbents and one for job hoppers who manage to secure new jobs in this economy,” Gaertner says.

Adding to the Quiet Quitting Trend

If a recession does limit opportunities for employees who’ve not yet left, that could add fuel to the quiet quitting trend.

“It’s more of an engagement issue,” says Morris. “Organizations need to do a little more now to bring people back into the fold. There’s a big shift now for organizations to try to find ways to reach and connect with their employees a bit more.”

Employers are increasingly recognizing the value of wellbeing and building workforce resilience in to counteract quiet quitting.

“There are things that organizations can do to catch people before they quiet quit,” Gaertner says. “That’s where wellbeing and resilience comes in, as well as all sorts of other things that organizations can do to motivate their workforce. Once employees quiet quit it’s almost impossible to bring them back.”

According to Rachel Fellowes, Aon’s global chief wellbeing officer, given the pressures of the pandemic and now the possibility of a recession, the issue for many workers becomes one of “human sustainability.”

“In the past couple of years, it’s all been about the new talent and the bigger pay,” Fellowes says. “Now there’s also this sentiment of sustaining people for the long term. And that’s a very recession-proof concept, because it’s far easier and cheaper to keep people than it is to rehire into new roles.”

A Changing Employer-Employee Relationship

Data show that the Great Resignation has contributed significantly to an increase in gig workers and ongoing changes in employer-employee relationships.

Gaertner notes, however, that the gig economy and workplace flexibility are two different things, and experiences during the pandemic have seen many employees increasingly value workplace flexibility.

“We’re working with a few clients right now to better understand what employees value,” he says. “In one of these projects, I was surprised to see how many employees would value being moved to a part-time schedule with a corresponding cut in pay.”

Other sorts of workplace flexibility might involve letting employees determine the hours of the day or the days of the week they choose to work.

A recession may interfere with those desires for flexibility, however, at least in some industries.

“A recession changes the power relationship between employers and employees,” Gaertner says. “At that point, employers can more easily drive changes they think are necessary. In some industries, some organizations probably will use that as a leverage to bring back employees to the office or to reduce the flexibility that employees have enjoyed over the last few years.”

Data Remains Critical

As employers look to address the Great Resignation, quiet quitting and the possibility of recession, data remains a valuable asset to empower decision making it helps businesses understand the tough questions. Can we hire the necessary talent? What drives our retention? What rewards do our employees value? This can also help inform employers in the context of broader market trends. Employers should review data to see if their businesses can hire and retain necessary talent — and if not, determine the reasons why. Organizations can also monitor employee sentiments for insights into what they value, and businesses can monitor turnover rates and examine them in the context of broader market trends.

“The instruments that organizations have at their disposal are still effective,” says Gaertner. “I don’t think the current environment requires new tools. It requires them to pay more attention to the tools they already have.”

Even in a Recession, Workplace Fundamentals Hold True

The Great Resignation and quiet quitting have highlighted some shifts in employees’ values regarding flexibility and mobility. But the fundamentals of what makes an organization appealing to employees remain consistent and will be there even in the event of a recession.

“The expectations that you’d have a supportive leader, a fulfilling career path, a rewarding job and support from a financial perspective all still remain the same,” says Morris. “Those things are all still fundamental to keeping employees.”

General Disclaimer

The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. 

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