A more uncertain outlook for jobs means fewer workers quitting. This reduces the costs of high staff turnover, but introduces new, hidden costs associated with “quiet quitting”. Over a period of three years, around 20% of people in UK organisations said they would like to leave their employer but didn’t actually leave. This group was considerably less satisfied than other employees, with implications for attendance, productivity, innovation, and wellbeing. The actions leaders can take to address quiet quitting can, encouragingly, enhance engagement across the entire organisation.
Labour markets are cooling, resulting in fewer workers quitting their jobs
As developed economies have adjusted to higher inflation and interest rates, the demand for workers has slowed down. Vacancy rates in both the US and the UK have returned to levels closer to those seen prior to the pandemic. Initially, as countries were able to lift COVID-related restrictions, and consumers with accumulated savings started to spend again, the number of job openings also soared. In the UK, vacancies increased from around 800,000 in the last quarter of 2019 to nearly 1.3 million in the first quarter of 2022—equating to 4% of total employment. In the US, job openings in the first quarter of 2022 were even higher, at more than 7% of employment1.
Since these peaks just two years ago, vacancy rates in both geographies have declined steadily and significantly, and employers have found it somewhat easier to meet their needs for workers. This is partly because the number of people resigning from their roles voluntarily, to seek better opportunities, has reduced considerably. At the height of the so-called “great resignation”, organisations in the US saw around 3% of their staff quit each month. In the UK, quarterly resignation rates peaked at 1.5% of total employment. Now, the US quit rate is already below its level at the end of 2019, while in the UK, we estimate that resignations had come down to 1.0% by the end of 2023. (Exhibit 1)
The easing in both unfilled vacancies and employees leaving has created some welcome breathing space for many organisations. Yet, as staff turnover abates, the costs of “quiet quitting” could increase in significance.
As real resignations decline, quiet quitting could become a bigger challenge
From the perspective of workers, less tight labour markets mean fewer opportunities. Gone are the days when 64% of employees who said they were likely to quit also said they would leave without another job in hand. The number of vacancies in the UK—an indicator of how easy it might be to find new employment—had dropped by 31% in January 2024 compared to two years ago. Similarly, online adverts for job openings were down by 34%. Wage growth has also decelerated, from 8.9% in the three months ending June 2021 to 5.8% in the three months ending in December 2023. These developments are likely to create further uncertainty in workers’ minds, making them more cautious when considering switching jobs.
However, when people don’t feel able to leave roles that feel unsatisfactory, there can be negative consequences for both the organisation and the individual. Recent research by McKinsey suggests that the costs of quiet quitting can be nearly as high as those of people actually leaving. The implications of high staff turnover are well known: lost output due to unfilled vacancies, significant recruitment and on-boarding costs, and lower initial output from less-experienced employees.
The costs of quiet quitting are less obvious, but just as serious. The latest academic research concludes that there is now persuasive evidence showing a link between engaged and happy employees and fewer sick days, higher productivity, enhanced creativity, and positive workplace relationships2. The opposite is true for disengaged or disgruntled employees who would rather work for someone else. The McKinsey study above estimated the cost of such disengagement to add up to around 4% of the wage bill for an average large corporation3. If labour markets cool further, and fewer staff decide to leave, this could increase the proportion who remain but have mentally resigned.
Quiet quitters make up between a fifth and two fifths of organisations’ workforce
One of the reasons for the high costs of disengaged workers is the sheer number of them.
The McKinsey study found that, overall, more than half of employees in large organisations were disengaged. Around 10% could be categorised as “quitters”—those who had already decided to leave. However, another 43% exhibited low satisfaction and commitment: 11% were “disruptors”— actively disengaged and likely to demoralise others—and a further 32% were “mildly disengaged”—fulfilling minimum job requirements but no more.
In the UK, the longitudinal Understanding Society survey quantifies the number of people who say they would like to change employer and those who actually end up doing so. (Exhibit 2) On the face of it, the results include some good news: in a sample of nearly 10,000 employed individuals, only 26% said that they would like to move employer. In other words, 74% were sufficiently content not to want to leave. However, people rarely act exactly in line with statements they make in surveys. Indeed, three years after the original study, only about 26% of those who said they wanted to find another job had changed employers. Relative to those who didn’t state a desire to leave, they were nearly 4 times as likely to do so. Nevertheless, about 19% of the original employees in the sample remained in place, despite having said they wanted to leave.
Taking the McKinsey and Understanding Society data sources together, it appears that between 20% and 40% of organisations’ workforce is typically made up of quiet quitters. This is a significant proportion of human capital that is not being fully utilised. Research suggests that such employees take more sick days, put in less discretionary effort, are less focused on delivering outputs, and may even make customers4 and co-workers unhappy. Therefore, quiet quitting has material consequences for organisational performance.
And, from the individual workers’ perspective, staying when you don’t want to is also undesirable.
Quiet quitters are three times as likely to be dissatisfied as other employees
Quiet quitting imposes hidden, but significant, costs on organisations. But it is not a desirable state for employees, either. Quiet quitters are, on average, significantly more dissatisfied with their jobs than other workers—whether compared to those who did leave or to those who stayed and never wanted to leave in the first place. (Exhibit 3)
Among staff who didn’t state a desire to leave their employer in the first wave of the survey, and stayed put, only 7% in the subsequent wave of the survey said they were either somewhat, mostly, or completely dissatisfied with their job. Overall, this group were the most satisfied workers, with nearly 90% of satisfied respondents. As for people who did move employers within the three year time frame of the study, around 10% were dissatisfied in their new jobs.5
The most dissatisfied group of employees was made up of quiet quitters: workers who wanted to change employer but, within 3 years of the original survey, were still at their old organisation. Among this group, 21% were either somewhat, mostly, or completely dissatisfied with their job in the latter wave of the survey. The quiet quitters were therefore three times as likely as “stayers” to be dissatisfied. Not only will this impair their performance; it is also likely to reduce their overall life satisfaction outside of work—with serious negative consequences for their wellbeing.
Addressing quiet quitting can benefit everyone in the organisation
So, what should employers do? Encouragingly, the actions that help quiet quitters improve their motivation and satisfaction are likely to enhance engagement throughout the organisation. To address the downsides of “quiet quitting” leaders can:
- Encourage openness: promote a culture where staff can share concerns and aspirations through regular feedback channels, helping them feel valued and heard.
- Recognize achievements: use structured programs to acknowledge hard work with both financial and non-financial rewards, motivating employees and fostering a sense of accomplishment.6
- Support work-life balance: implement flexible work arrangements and respect personal time to enhance job satisfaction and loyalty.
- Offer growth opportunities: provide tailored professional development and clear advancement paths to rekindle employee commitment and satisfaction.
- Foster a positive culture: build an inclusive and supportive environment, with psychological safety, by addressing toxic behaviors promptly to maintain workplace health.
Quiet quitters are detrimental to organisations’ performance and workers’ wellbeing. As labour markets cool, their numbers might grow. Good organisations will re-engage disenchanted employees to mitigate the consequences—and by doing so, benefit the broader organisation.
McKinsey’s recent report, “The State of Organizations 2023: Ten shifts transforming organizations”, provides further insights and recommendations on how to respond to the many challenges facing today’s organisations.
1. The conventions for calculating vacancy, or job opening, rates in the UK and US differ slightly. This article follows the UK convention, where the number of vacancies is divided by the number of employee jobs.
2. Workplace Wellbeing and Firm Performance, Jan-Emmanuel De Neve, Micah Kaats, and George Ward, University of Oxford Wellbeing Research Centre Working Paper Series, May 2023
3. This estimate relates to costs of disengagement relative to total salary costs. The latter does not include other direct or indirect personnel costs, such as national insurance or pension contributions.
4. Does Employee Happiness have an Impact on Productivity?, Clement Bellet, Jan-Emmanuel De Neve, and George Ward, Said Business School Working Papers, February 2023
5. On the face of it, Exhibit 3 might suggest that moving jobs reduced, rather than improved, workers’ job satisfaction. This is, however, not the correct way to interpret the data, because a different group of people will have made up each of the different cohorts shown in the exhibit. For example, inherently less satisfied individuals (dissatisfied both before and after job move) may have been more likely to switch jobs more often.
6. The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work, Teresa M. Amabile and Steve J. Kramer, Harvard Business Review Press, 2011.