Why are so many people quitting their jobs?
The better question may be, what can employers do to improve working conditions and remain agile as we move towards the future of work? A record number of employees quit their jobs in September 2021, with 4.4 million, and that number shows no signs of slowing down as we approach the holiday season. In total, 2021 has seen 34.4 million people quit their jobs, with more than 24 million doing so since April.
As the pandemic continues along with the delta variant, the resignation rate indicates that Americans are continuing to search the job market for better income opportunities. Workers are turning their side hustles into full-time employment, battling a barrage of unpredictable school closures and online learning challenges, and switching career paths.
The jobless rate fell to 4.6% in October. The number of jobless persons, which now stands at 7.4 million, has continued to decline. Both indicators are much lower than they were at the end of the February-April 2020 recession. However, they are still higher than before the Covid-19 pandemic in February 2020, at 3.5 % and 5.7 million, respectively.
- 4.4 million employees quit their jobs in September 2021, the highest number ever recorded.
- The unemployment rate fell to 4.6% in October, which is lower than the end of the February – April 2020 recession.
- These numbers are still higher than before the Covid-19 pandemic which saw 3.5% unemployment and 5.7 million jobless people recorded.
The Pandemic Left Scars
It should be noted that Americans felt the impacts of the pandemic close to home, losing loved ones unexpectedly without a chance to say goodbye in person. Many more battled severe Covid-19 symptoms and faced unsympathetic employers in the process. This has caused Americans to reassess their choices when it comes to working.
As more companies move away from remote and hybrid work to entirely in-person offices, employees refuse to transition and seek remote work options elsewhere. This is especially true for millions of workers who embraced the hours they were able to claw back with a switch to remote work last year. Like those in the leisure and hospitality industry, other employees are looking at 30-year inflation highs and simply can not afford to stay in their current positions.
The Case for Caregivers
We must keep in mind the situation of the broader pandemic for parents and other caregivers. Parents were forced to quit their jobs or reduce hours during the pandemic due to school and daycare closures and the increase in coronavirus cases in nursing homes. People have had to make the impossible choice between continuing their careers and maintaining their current financial state, or leaving their children or other family members alone at a vulnerable time.
Although certain areas of the country continue to open up and bounce back from the Covid-19 pandemic, the delta variant placed a heavy strain on several areas of the economy, preventing a full reopening. In October, employment decreased in local government education and state government education, -43,000 and -22,000, respectively, according to the US Bureau of Labor Statistics.
While some students returned to in-person learning this fall, that transition has been marked by sporadic shutdowns due to delta outbreaks, teachers shortages, and other unpredictable school closures parents must account for often on very short notice. This has created an impossible situation for parents and caregivers, which shows no clear end in sight.
Tensions Rise in Hospitality and Healthcare
For other workers, like employees in the hospitality and foodservice industry, sporadic closures due to Covid-19 outbreaks created uncertainty. Many felt forced to work in what they felt were unsafe conditions interacting with unvaccinated coworkers or guests without proper PPE. To add to this, customers have become frustrated with long wait times, slower service, and lower quality products due to a lack of staff and supply chain delays.
Workers in the service industry are dealing with an unpleasant working environment full of frustrated staff and angry customers each day with no end in sight. This is not to mention the strain healthcare workers have been experiencing for the duration of the pandemic. The healthcare industry “heroes” we once lauded have been left by the wayside. Nurses and doctors are dealing with Covid-19 related overcrowding in hospitals. To say this is an unsustainable working environment for many is an understatement.
- The pandemic has fundamentally changed the way Americans live and work.
- Unexpected school closures and remote learning have placed a strain on parents’ and caregivers’ ability to return to full-time work.
- Workers in certain industries we once called “heroes” and celebrated as “essential workers” have faced the brunt of the pandemic and are still contending with it today.
Companies must ask, are workers leaving their jobs, or are their jobs leaving them behind?
Who Is Quitting?
According to research company Statista, the hotel and hospitality industry, which was severely impacted by pandemic-related unemployment last year, is now at the center of the labor deficit. Roughly one out of every ten positions remained vacant at the end of September 2021.
Despite 1.27 million new hires in the leisure and hospitality sector, 1.59 million positions remained unfilled at the end of the month. Employers in transportation and warehousing, aside from the hospitality industry, had the most difficulty obtaining workers. This only exacerbates the continuing supply chain bottlenecks and challenges faced by firms leading up to the holiday season.
What does all this mean for workers?
Current employees may be able to leverage the current market to receive increased compensation or other benefits from employers when looking for new jobs or from their current employer. Dedicated employees who have stuck it out through the growing pains of the pandemic remote work shift may have some great ideas on how to improve efficiency and productivity.
Employers should actively listen to their departments with high rates of turnover and assess why employees are leaving. Some employees may need to reconcile that their jobs will never look the same as they did before the pandemic, for better or worse.
Employees who moved to lower cost of living areas while working remotely may need to contend with a lack of networking opportunities or other fringe benefits they may have experienced working in hub cities. Other workers may need to accept that their employer is determined to return to in-person work or other Covid-19 related concerns. Employers are saying, “if not now, when?” regarding a return to the office, so employees must reconcile that while looking for remote opportunities.
What does all this mean for companies?
The labor market is changing, and organizations must adapt to the current trends or be left behind. Workers have quit their jobs for a variety of reasons, as stated above. Employees enjoyed the work-life balance the temporary work from home ordered afforded them and dreaded going back to work in-person full time. The scramble for workers boosted wage growth to an annual increase to 4.9% in October, although this has been outstripped by overall inflation, leading to a fall in actual earnings.
- The hotel and hospitality industry is losing the largest number of workers with 1.59 million positions remaining unfilled at the end of September.
- 987,000 workers quit their current positions in hospitality searching for a better job.
- Transportation and warehousing are also having difficulty holding on to workers.
The answer may seem obvious, but for some organizations hemorrhaging workers, it may not feel that clear cut: worker retention and employee satisfaction are more important now than ever before. It can take months to hire and onboard a skilled employee. It takes seconds for a new employee to hand in a two-week notice.
Organizations should consider what hiring incentives they can provide to new workers and what compromises they can make for current employees. This does not have to come in the form of excessive wage increases – it can be as simple as more flexible scheduling, more vacation time, or better health and wellness benefits.
Companies may also consider hiring more independent contractors or people who have had to take years out of the job market for various reasons to fill these employment gaps. The adage rings true; while employers are not at the point of begging, they should look outside the box to fill rolls with higher turnover after the pandemic. Compensation was always a critical factor in employee decisions, but it’s even more necessary to examine in the aftermath of the pandemic.
Pay isn’t the only reason that people work or are engaged by their jobs, however, it is a fundamentally motivating factor. With it becoming increasingly difficult to recruit and retain talent, employers must take a hard look at the relationship between employee compensation and their value, culture, and engagement strategies. To learn more about the role compensation plays in values, culture & engagement strategies, check out our recent article here.