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Whether you’re an employee considering getting started or an employer curious about what’s behind this trend, read on.
A curious phenomenon has been occurring across America since the spring of 2021. Workers are leaving their jobs en masse and there is no sign that this trend is about to end.
Called the “Great Resignation” by Anthony Klotz of Texas A&M University, millions of employees voluntarily resign each month. Their reasons for quitting vary, but one thing is certain: The major layoff has an impact on the U.S. job market and people’s lives.
Whether you’re an employee considering joining and quitting your job or an employer curious about what’s behind this trend, read on.
What is the big layoff?
Also known as the ‘Big Quit’, the Great Resignation is an ongoing trend where a large number of employees have voluntarily quit their jobs. It started in the US in April 2021.
That month, a record 4 million Americans left their jobs. That number has held steady — all told, about 48 million people retired in 2021. That’s a record number of job jumpers.
In the “before times,” fewer than 3 million Americans quit their jobs each month, on average.
Fast-forward to 2022, and the trend continues. According to the US Bureau of Labor Statistics, 4.3 million workers left their jobs in January 2022. That is a quit percentage of almost 3%.
While some of the people who quit find a new job, others decide to stop working altogether.
You may also have noticed that the onset of the Great Resignation—Spring 202—coincided with the one-year anniversary of the first COVID lockdowns here in the United States. At that point, businesses finally reopened and more people became eligible for vaccinations.
Faced with the difficult choice of staying home or going back to work, many people chose the former.
Why do employees quit their jobs?
When the COVID pandemic first shut down the United States, many people left the workforce involuntarily. In March and April 2020, more than 22 million workers were laid off as businesses were forced to close.
In addition, at the time, many women decided to leave the workforce because, with schools and nurseries closed, they had to stay at home to care for their children.
That trend of layoffs started to snowball. And by the time businesses reopened, a much larger group of American workers decided they wanted to quit, too.
A recent study by the Pew Research Center provided valuable insight into why the Great Resignation is taking place.
According to the survey of more than 9,000 people who quit in 2021:
63% said their pay was too low 63% said they didn’t see career advancement opportunities 57% said they didn’t feel respected at work 48% said they quit because of childcare issues 45% said they wanted more flexibility in terms of work hours43% said they had benefits — such as health insurance and paid time off — were unsatisfactory
While some of the workers who have resigned have done so to get out of the 9-to-5 rut and become part of the ‘Anti-Work Movement’, the majority have quit to find better jobs elsewhere .
Why the big layoff is really the big reshuffle?
The reasons employees cite for quitting are not new. Historical data shows that employee turnover has been high in recent years in the US.
What is striking about the Great Resignation is that so many employees quit at the same time.
Some of it boils down to simple psychology: When a friend quits their job, it’s natural to start thinking about how you could do the same. And if a co-worker resigns, it’s not uncommon for others to resign at short notice, especially if the working conditions aren’t great.
After all, there is power in numbers.
Plus, having a blank spot on your resume doesn’t look too bad during the COVID era. Job shortages used to be a big red flag to potential bosses. Now many people are taking a “gap year” in their history thanks to COVID.
But the Great Resignation has also ensured that there are a number of vacancies on the job market. That might be an understatement – in fact we are dealing with a labor shortage.
According to the Bureau of Labor Statistics, there were 11.3 million unfilled job openings in the US in January 2022. That is only a slight decrease from the record number of unfilled vacancies in December of 11.4 million.
This labor shortage gives employees more bargaining power for better wages, better working hours and better fringe benefits.
It seems to work.
Quit for a better job
According to the agency, 4.3 million workers left their jobs in January but found 6.5 million new ones. Instead of leaving the labor market, people change jobs.
And according to Pew, 56% of employees who changed jobs in 2021 report that they now make more money, have more growth opportunities and enjoy more flexibility when it comes to their schedules.
Yet there are many people who are unable or unwilling to get back to work, despite the many vacancies. It typically involves healthcare, education, restaurant, retail and hospitality workers — jobs that put them on the front lines when there’s a resurgence of COVID.
How can employers improve employee retention?
So with millions of employees leaving, how can employers prevent or resolve high employee turnover?
According to a new survey from Pew Research Center, most people who quit in 2021 did because they wanted better pay. One of the most proven ways to attract and retain talent is to offer more money.
Let employees work from home
If the COVID pandemic has taught us anything, it’s that remote working is possible — and even better for some people. Working from home allowed many parents to care for their children while schools and nurseries were closed. (Remember, childcare issues were one of the top reasons people dropped out last year.)
Remote workers also save money on commuting costs such as gasoline, train and bus costs, etc.
In addition, companies themselves can save money by letting employees work from home. After all, they don’t need to consume as much electricity, heat, air conditioning, etc. Companies can even downsize to smaller headquarters to save on rent and insurance.
Fostering a culture of respect
A large percentage of employees who quit last year (57%) said they did so because they felt disrespected at work.
Don’t let your employees feel neglected. Get to know them as people, listen to their frustrations and celebrate their achievements.
And show them respect by letting them do the job the way they know how to do it. Micromanagement is the worst and will make your employees consider a career switch.
Focus on professional development
Offer your employees plenty of opportunities to grow and develop within your company. A corporate culture that emphasizes employee training and education will attract and retain employees.
Also give them clear paths to promotion, but don’t make them feel like they need to create an unhealthy work-life balance. The last thing you want on your watch is employee burnout.
Should you quit your job?
So if you’re considering joining the Great Resignation and quitting your day job, would you?
I’m going to be completely honest with you. Don’t do it unless you have a plan, unless your job actually costs you money — think childcare expenses — or unless your job makes you extremely miserable (but even then you should probably have a plan too).
Unless your mental or physical health is at risk — I know people who have been in both circumstances — give yourself a few months to prepare before quitting.
During that time, consider setting up a side job or part-time job that will give you enough money to live on. I’ve helped a lot of friends find freelance gigs on sites like Fiverr, which allowed them to quit their full-time jobs and work from home (or wherever).
In addition, it doesn’t hurt to find another job while you’re still employed. Take extra care when looking for a job on your work computer and don’t neglect your current job. After all, you want your current employer to give you a good reference at some point!
Many people leave the workforce and rely on their savings to make ends meet. I don’t recommend this – you’ll need your savings later for an emergency or even for retirement.
And definitely don’t quit your job and plan to live on credit cards until you get rehired!
It comes down to
I retired from full-time work many years ago and moved into a freelance career as a writer and editor. It was the best decision I’ve ever made. I like the financial freedom and flexibility of working on my own terms. And I make more money than ever in an office.
For some reason the Great Resignation will continue. And as long as people use it to find better, happier careers, I’ll encourage them.
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This post The big layoff: why millions of workers are quitting
was original published at “https://millennialmoney.com/great-resignation/”