American workers endured an unprecedented wave of difficulty and disruption over the past 18 months. Many employees felt isolated, overwhelmed with added responsibilities like homeschooling and burned out by long remote workdays. Living under a cloud of Covid and deep recession, they were also fearful. Millions of Americans lost their jobs early in the pandemic, and those who were still working felt fortunate to be employed. Few were looking to change jobs or careers during such a tumultuous time.
“During the pandemic, we saw that people were sheltering in job, and really, what that means is they may have wanted to switch jobs, but they were too nervous to make those changes, because they needed the stability,” said LinkedIn Career Expert Catherine Fisher. “And so now, as the economy and the job market is starting to open back up, many people are really reevaluating what’s important to them.”
The job market has taken off in a way that seemed unimaginable 18 months ago. The U.S. Bureau of Labor Statistics’ JOLT (Job Openings and Labor Turnover) Summary indicated a near-record level of 9.2 million job openings in the U.S. in May. This level of openings has persisted for several months, and workers have taken notice. Almost 4 million people quit their jobs in April, a quit rate equal to 2.7 percent of the labor force—the highest rate in 20 years. Economists have dubbed this exodus the Great Resignation, leaving companies to examine how they are recruiting and retaining capable employees.
Why are Employees Leaving?
Opportunity for better pay or working conditions
As part of The Great Resignation, some workers have taken the opportunity to leave jobs with low pay, stressful working conditions or both. Turnover has been particularly heavy in the hospitality industry, which was devastated by the pandemic. Many laid-off workers decided they didn’t want to return, and they’re pursuing new opportunities.
Previously-planned job or career change deferred during the pandemic
The pandemic impeded normal movement between jobs, creating a pent-up demand for change. A Prudential survey indicated that one in five workers changed careers in the past year, and half of these workers say the change is permanent. The reasons for the career change included work-life balance, higher wages and simply the desire for something new. An additional 25 percent indicated that they plan to look for a new job soon. Eighty percent of this group say they’re particularly concerned about their career growth. Other workers opted to take classes or return to school full time, working towards a better job in the future.
Retaining the ability to work remotely
Many employees have embraced remote work enthusiastically. In some big cities, workers spent several hours a day commuting, at considerable expense to their wallet and family time. The Prudential survey revealed that one in three workers would not want to work for an employer that required them to be onsite full time. Two out of three preferred a hybrid remote/office model. Similarly, LinkedIn has reported that 40 percent of its members value a remote work model over a higher salary or more benefits. As employers begin bringing people back to the office, some employees are quitting instead of commuting. A recent survey indicated that 39 percent of workers would consider resigning if they lost the ability to work remotely. For millennials and Gen Z, it was 49 percent.
Feeling overwhelmed or burned out
The extended time at home crated the opportunity for reflection among many employees. Some were burned out and felt like they needed a break. As a result, some high performing employees have left the job market altogether, either temporarily or permanently. In addition, many women left the workforce to care for children or elderly relatives, erasing the workforce gains they had made in recent years. According to McKinsey, 25 percent of women are considering leaving the workforce, with working mothers, women in senior roles and Black women facing the most significant challenges.
How are Employers Responding to The Great Resignation?
First, companies are focusing on retaining competent high performing employees that they already have. The Prudential survey suggests that flexible work schedules, mobility opportunities and remote work at least part of the time would encourage workers who are thinking of leaving to stay with the company.
In response to the Great Resignation and the ongoing talent shortage in general, companies are focusing on skill sets rather than direct industry experience when it comes to recruiting and retaining capable employees. Finding a perfect match can be time-consuming and expensive, particularly if the hire ultimately doesn’t work out. So companies are spending more time defining the skills needed to succeed in the job and broadening their search.
Talent mobility is another tool to expand the talent pool and erase geographic barriers. Companies that paused their domestic and international relocation activity during the pandemic have, in some cases, resumed pre-pandemic relocation activity levels surprisingly quickly. This reflects urgent recruiting requirements and also the need to develop and retain existing talent.
The battle for talent continues to escalate, and most companies will be employing various strategies to stem the Great Resignation and attract new workers. While salary will always be significant, workers today expect a more holistic, rewarding employment package that meets their needs, body and soul.