Even as the economy is slowly recovering from supply chain issues and pandemic shocks, employers still face unprecedented challenges with regard to labor. From its Job Openings and Labor Turnover Survey, the U.S. Department of Labor reports job openings have hit an all-time high of 11.5 million. Even if all the unemployed people in the country filled these positions, there would still be 4 million open jobs left.
On top of the rising wage pressure, job openings continue to outpace hiring rates due to the widespread phenomenon of the Great Resignation.
A closer look into the current labor market
The current disruptions in the U.S. workforce can be traced back to the Great Resignation of 2021, wherein a record 47 million people left their jobs. The height of the pandemic was certainly a key enabler of quit rates, especially among industries like retail and hospitality where the low wages were not commensurate with the requirement of in-person attendance. There remains a labor shortage in industries like trade, manufacturing, education, and health services, as there are more vacancies than the number of workers with training and experience.
Is the Great Resignation over?
We may be at the tail end of the pandemic, but the Great Resignation is far from over. Workers continue to quit not only because of equity gaps in financial compensation, but also due to the lack of choice, fulfillment, and well-being in their roles and work environments.
Work models are also crucial to talent retention, but there remains a disconnect between the flexibility that the workers want and what employers ultimately adopt. Finally, working parents are forced to make a choice between keeping their jobs and attending to their children, as they lack access to childcare services after many providers were forced to close or scale down during the pandemic.
How employers should respond?
These complex and diverse drivers for mass resignation spell out a myriad of consequences for U.S. employers. Workers with specialized training now have the leverage to negotiate for better pay and more flexible working arrangements. (Clonazepam) Despite the easing of restrictions and the return to the office, expanding remote work will ultimately benefit employees, particularly women and minorities, who need to cut down on commuting costs and balance their jobs with household responsibilities.
The so-called quitting contagion can also inform the strategies for attracting and retaining top talent, particularly when a skilled worker quits to seek new opportunities and ends up influencing their co-workers to follow suit. Understanding ‘quitfluencers’ is crucial to prevent the domino effect of quitting in an already-strained workforce. Organizations must first invest in compensation audit and market research, then adjust their employee value proposition to be in line with what key talent competitors are offering. A referral program that’s deeply embedded in company culture can also incentivize quitfluencers while also capitalizing on new talent.
The future of U.S. employment
Nearly 5.4 million new business applications were filed in 2021 alone. Economists and labor experts say that many of these are owned by workers who quit their jobs in pursuit of entrepreneurial opportunities. Startups and small businesses will hence continue to see a dramatic surge until next year, aided by the increasing relevance of e-commerce on websites and social media. The trend of ‘quiet quitting’ is also projected to persist.
As the Great Resignation shed light on the need to resist grind culture and instead improve work-life balance, expect a significant number of employees to reinforce workplace boundaries—mainly by refusing to answer queries outside of office hours, using their sick and mental health days as they see fit, and only doing what is within their job scope.