An interesting trend has developed this year, more people are voluntarily leaving their jobs, even as unemployment rates remain higher than their pre-pandemic levels. So why are people quitting their jobs more than ever before?
The reasons for leaving a job are not new. They include more money, dissatisfaction, unfulfillment, lack of upward mobility, and better work-life balance. The pandemic and its remote working mandate has provided an extended period of time for people to rethink what work means to them, how they choose to invest their time, and changed their expectations of how work fits into their lives.
A Microsoft Corp. workplace trends survey found that 40% of Americans are considering leaving their jobs this year. This study is similar to one conducted by Yahoo, that indicated 37% of workers are thinking of leaving their jobs.
According to jobs data for April, more than 4 million US workers left their jobs. With nearly 750,000 of those people working in the hospitality industry. This industry, which was hit hard by the pandemic, has seen many of its workers leave for higher-paying jobs in other industries where they don’t have to work weekends, evenings, and holidays.
A recent piece from Bloomberg speaks to this new trend and how it may benefit both employees and employers. Since the 1980s, voluntary job changes have been declining, regardless of skillset and income. And some economists speculate this is an important reason why wages have not changed much over the past 40 years.
The article cites organizational psychologist Adam Grant and his take on how Americans are languishing. They are risk-averse and aren’t growing emotionally or economically. The lockdown brought about by the pandemic enabled people to realize how long they’ve been stuck in a rut.
The benefit is that many are now taking proactive steps to make a change. This can provide them with higher wages and new skills. Economists believe that industries with higher rates of job change lead to increases in innovation and a more durable economy.
While we are seeing higher rates of people quitting their jobs, history tells us that after a negative experience, we often become even more risk-averse. Does this mean all the talk of quitting is just that, talk? Employers hope so, offering hybrid work schedules and retention bonuses that they hope will tide people over until they settle back into their complacent routine.
According to Julia Pollak, ZipRecruiter Economist, “People are leaving for more attractive jobs because there are lots of attractive jobs on offer,” she told Yahoo Money. “The share of signing bonuses has very radically exploded, the share of jobs offering a four-day workweek has also about doubled.”
“There are many jobs where pay is low, and one doesn’t have that much attachment to an employer,” Pollak said. “When suddenly warehousing and trucking and nursing are offering huge bonuses and reducing experience requirements and training requirements, they suddenly become much more attractive.”
According to the Yahoo data, younger generations are more likely to quit, with 46% of Millennials and 36% of Gen Z thinking of leaving versus 31% of Gen X and 21% of Baby Boomers. When asked what would convince an employee to stay, a 10% increase in pay was the top response, followed by better benefits. This supports data from the Federal Reserve Bank of New York, with a new high in earnings expectations in March of this year, at $72,341 annually.
The balance between employee and employer has been altered by the pandemic and keeping top talent is going to be more difficult than ever before. Creating a culture that values employees is a key to reducing turnover rates. If you’d like to learn more or need help finding and hiring executives, send us a note and one of our retained search consultants will reach out to you.