Workers have been quitting their jobs and finding new employers in droves as the pandemic abates and life returns to normal.
After rebounding to pre-COVID-19 levels last year, the rate of people quitting their jobs has rocketed in recent months in a shift some are referring to as the “Great Resignation.” In April, at the peak of the pandemic (and at the trough of economic activity), about 2.1 million people quit each month, according to the Bureau of Labor Statistics. Exactly one year later, that figure nearly doubled, with April 2021 shattering records from even before the pandemic.
Nick Bunker, who leads North American economic research at the Indeed Hiring Lab, told the Washington Examiner the high quits rate is a sign of how strong the labor market has been for people with a job.
Given apparent shortages in labor, employers have turned to hiking wages and offering competitive bonuses to attract and retain employees. Bunker said some people are seeing the urgency in which employers want to find workers and are taking the opportunity to search out jobs with higher wages, better schedules, and other upgrades.
“Maybe their employer looks around and says, ‘Oh, there’s a stronger need for me to give a raise now than in the past because I know there’s more options out there for the employee,’” he said of situations in which companies might be fearful of losing workers to other businesses.
Wages are not the only change. There are a variety of aspects people might care more about now than before the COVID-19 pandemic, according to Bunker. For example, working remotely might be a major factor given some people have adjusted to working from home.
Rachel Greszler, an economics research fellow at the Heritage Foundation, also emphasized to the Washington Examiner that in addition to wages, people are looking for flexibility when seeking a job. She pointed out some scenarios in which employees might end up working four-day work weeks or a hybrid model working some days in the office and others from where they please.
“The environment that’s out there is really a workers’ market,” Greszler said. “They are the ones that have the upper hand right now.”
The impact of the Great Resignation is seen not only by economists but also by staffing companies working directly with job seekers and employers. Amy Glaser, senior vice president and outsourcing lead for staffing company Adecco, said her company knew from the start job market recovery would not be linear and that it would be bumpy.
She told the Washington Examiner Adecco is seeing “really intense” pressure on wages. Sign-on bonuses and completion bonuses are an increasingly attractive way for employers to snare employees.
Bunker said a major aspect of the Great Resignation is still an unknown in whether the workers quitting their jobs are primarily remaining in the same industry and moving to another company or moving into different career paths. He said there isn’t recent data on industry switching available.
“We don’t know right now. That’s one of the big questions,” he said during an interview.
Glaser suggested some employees, especially in the leisure and hospitality industry, might have used their time off during the pandemic to seek opportunities in a different industry.
Because so many workers were without jobs for extended periods due to government-imposed COVID-19 restrictions, many got new certifications and upskilled in a new career field, so they did not necessarily have to return to their previous jobs, she explained.
In addition to the push for higher wages and better working environments, Heritage economist Greszler placed some of the blame for the high quits rate on the federal government’s supercharged unemployment pay, which stacks on top of state unemployment insurance and can provide a comfortable bumper for someone who might be more discerning in choosing a job.
Greszler said once the federal unemployment benefits sunset in early September, economists will get a better read of where the economy is at “without all of this artificial stuff being pumped in there.”
While shifts within the workplace have been largely positive for workers, including higher wages, Greszler also pointed out the United States is experiencing high inflation. Depending on how long it lasts, wage gains could be eaten away by higher prices.
But will when the Great Resignation end? Bunker said the jury is still out, although economists are watching the data closely for any changes.
“I do think there is a possibility that this comes down a little bit, but we’ll just have to wait and see,” he said.
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Original Author: Zachary Halaschak
Original Location: The 'Great Resignation' haunts employers trying to recover from pandemic