Texas A&M University professor Anthony Klotz coined the phrase “The Great Resignation” in 2021, describing the wave of people quitting their jobs due to the pandemic.
Initially seen as a distressing but temporary effect of the ongoing pandemic, The Great Resignation shows little sign of ending. Job turnover continues to reach new highs. According to the U.S. Department of Labor, in November 2021 a record 4.5 million workers left their jobs.
Between February 2020 and January 2021, in the early months of the pandemic, 5.5 million people dropped out of the U.S. labor force.
People of all ages are leaving their jobs, from baby boomers who elect to retire a little earlier than anticipated, to the secondary earners who had to stay home and take care of the kids when schools closed due to COVID-19, to the youngest workers who maybe were the first to realize that working face to face during a pandemic really stinks.
Fully one-quarter of those who quit in November were low-wage workers in the hospitality and leisure industries: over one million workers. It’s not unusual for employees to leave their jobs or negotiate for higher pay when the job market is strong. This scenario has played itself out repeatedly, as in the 1990s and 2014.
The average American worker’s real wage decreased by over 2.4% in 2021, when adjusted for inflation. In a recent poll by The New York Times and Momentum, only about 17 percent of respondents felt their income was keeping up with inflation.
A dramatic result of The Great Resignation is that the freedom to work from anywhere has become job seekers’ most sought-after benefit. According to Nick Bloom, new results from the WFH Research Project shows that people value work-from-home flexibility as much as a 10% wage increase.
Employers, however, are not as enthusiastic as the workers they are so desperately trying to attract.
Klotz said, “It’s not just about getting another job, or leaving the workforce, it’s about taking control of your work and personal life, and making a big decision – resigning – to accomplish that. This is a moment of empowerment for workers, one that will continue well into the new year.”
2022 is shaping up to be another year of high turnover, although not at the level seen last year. A ResumeBuilder.com poll forecasts that around 23% of workers will be seeking new jobs this year.
According to a report from The Arnold Group, 36% of employers think the labor shortage will improve in 2022. Only 14% feel it won’t improve until 2023 or later.
On a positive note, employee turnover may stall, even in a tight labor market, as companies offer better benefits and higher salaries in response to The Great Resignation.
It’s a great day in Emporia!
“Let’s Talk Business” is a weekly column of the Emporia Area Chamber of Commerce and Visit Emporia. The mission of the Chamber is to be proactive in creating an environment for business and community success, guided by the vision that positive attitudes promote positive actions. Contact us at 620-342-1600 or firstname.lastname@example.org and visit our website at www.emporiakschamber.org.