Economic Implications of the Great Resignation

The term Great Resignation was coined last year after a rising trend was observed of employees leaving jobs or changing jobs. The term Quit Culture was also something that entered the vernacular after an alarming number of employees, especially it seemed Millennials, were seen to walk away from their employers.

In fact, between April and the end of August alone, a historic 19 million Americans—amounting to roughly 12 percent of the civilian labor force—quit their jobs, and many more are looking to make the jump. Nearly half of America’s workers (48 percent) are actively job searching or watching for opportunities, according to Gallup. [1] The trend isn’t just unique to one industry either. Workers in all job categories, from customer service roles to highly professional positions, indicate they were looking to make a switch.

The reasons for this are fairly simple. The global pandemic accelerated a shift to online work and many folks have taken a long look at their finances and lifestyles and made decisions accordingly. 54 percent of workers surveyed by ZipRecruiter said they preferred a job that let them work from home.

The pandemic allowed workers to reevaluate their career decisions and values. Among those looking for new jobs, flexible work arrangements, higher pay, and job security are listed as the top priorities for workers.

Job satisfaction for hospitality workers is at an all-time low, while burnout has led to record high resignations of nurses. Many customer-facing industries suffered heavy layoffs at the beginning of the pandemic, which increased the workloads of the remaining staff. Add to this the fact that many were earning just as much, if not more in some cases, on unemployment benefits that when it came time to go back to work, many chose to make a change.

There’s also another factor to consider: Following last summer’s lockdowns, many people reduced spending, increased savings, and paid down debt, which provided them with safety nets to quit without having a new job lined up first. Record high job openings and increased wages offered by employers to attract new talent incentivized many workers to leave jobs and jump into a candidate-friendly market. This was especially true for low-wage workers seeking opportunities for career advancement.

There are more jobs available than ever and so the Great Resignation has taken hold. Workers are leaving jobs that require them to work in offices and taking jobs that give them more time at home. Worrying whether you can trust them to be there next month causes undue stress in a leadership position.

As a result of all these trends, employers continue to struggle with a worker shortage despite the record of job openings at the end of August. The lack of workers and consistent turnover could continue to slower the recovery of the economy, contribute to rising prices, and extend supply chain issues. On the positive side, however, the current labor market has allowed millions of workers to reduce burnout and find better pay with improved work-life balance, which can lead to healthier and happier employees.

 

 

 

 

 

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