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Great Resignation

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Quits rate

The Great Resignation, also known as the Big Quit,[1] is the ongoing trend of employees voluntarily leaving their jobs, from spring 2021 to the present, in response to the COVID-19 pandemic. The term Great Resignation was likely coined by Anthony Klotz [citation needed], a professor of management at Mays Business School of Texas A&M University.[2]

Background

From December 2000 to the beginning of the COVID-19 pandemic in 2020, the United States resignation rate never surpassed 2.4% of the total workforce.[3] High quit rates indicate worker confidence in the ability to get higher paying jobs, which typically coincides with high economic stability, an abundance of people working,[4] and low unemployment rates.[5][6] Conversely, during periods of high unemployment, resignation rates tend to decrease as hire rates also decrease. For example, during the Great Recession, the US quit rate decreased from 2.0% to 1.3% as the hire rate fell from 3.7% to 2.8%.[3]

US resignation rates during the COVID-19 pandemic initially followed this pattern. In March and April 2020, a record 13.0 and 9.3 million workers (8.6% and 7.2%) were laid off, and the quit rate subsequently fell to a seven-year low of 1.6%.[3] Much of the layoffs and resignations were driven by women, who disproportionately work in industries that were affected most by the lockdowns, like service industries and childcare.[7][8][9]

As the pandemic has continued, however, workers have paradoxically quit their jobs in large numbers. This is despite continued labor shortages and high unemployment.[10][11]

Causes

The COVID-19 pandemic has allowed workers to rethink their careers, work conditions, and long-term goals.[4] As many workplaces attempted to bring their employees in-person, workers desired the freedom to work from home given during the pandemic. With telecommuting also came schedule flexibility, which was the primary reason to look for a new job of the majority of those studied by Bankrate in August 2021.[12] Additionally, many workers, particularly in younger cohorts, are seeking to gain a better work–life balance.[13]

Restaurants and hotels, industries that require in-person interactions, have been hit the hardest by waves of resignations.[14] COVID-19 stimulus payments and rises in unemployment benefits allow those who rely on low-wage jobs for survival to stay home, although places where unemployment benefits were rolled back did not see significant job creation as a result.[14][15][16]

According to an Adobe study, the exodus is being driven by Millennials and Generation Z, who are more likely to be dissatisfied with their work. More than half of Gen Z reported planning to seek a new job within the next year.[17]

Impacts

United States

Resignations in the United States
Resignation rates plummeted in the initial stages of the COVID-19 pandemic, but returned to pre-pandemic levels in July 2020 and reached record numbers in April 2021.[18]

In April 2021, as COVID-19 vaccination rates increased, evidence began emerging that the Great Resignation was beginning in the United States. That month, a record 4.0 million Americans quit their jobs.[19][11]

In June 2021, approximately 3.9 million American workers quit their jobs.[20] Resignations are consistently the most prevalent in the South, where 2.9% of the workforce voluntarily left their jobs in June, followed by the Midwest (2.8%) and the West (2.6%). The Northeast is the most stable region, with 2.0% of workers quitting in June.[21]

According to Microsoft's 2021 Work Trend Index, more than 40% of the global workforce are considering quitting their job in 2021.[22] According to a PricewaterhouseCoopers survey conducted in early August 2021, 65% of employees said they are looking for a new job and 88% of executives said their company is experiencing higher turnover than normal.[23]

In October 2021, the U.S. Bureau of Labor Statistics reported that food service workers' quit rates rose to 6.8%, which is well above the industry average of 4.1% over the last 20 years and still higher than the industry's quit peaks of 5% in 2006 and 2019.[24]

Europe

Employees in Germany had the most COVID-19-related resignations in Europe with 6.0% of the workers leaving their jobs, followed by the United Kingdom with 4.7%, the Netherlands with 2.9%, and France with 2.3%. Belgium had the least number of resignations with 1.9%.[25]

References

  1. ^ Curtis, Lisa. "Why The Big Quit Is Happening And Why Every Boss Should Embrace It". Forbes. Retrieved 2021-07-16.
  2. ^ Cohen, Arianne (May 10, 2021). "How to Quit Your Job in the Great Post-Pandemic Resignation Boom". Bloomberg. Retrieved July 8, 2021. Ready to say adios to your job? You're not alone. "The great resignation is coming," says Anthony Klotz, an associate professor of management at Texas A&M University who's studied the exits of hundreds of workers.
  3. ^ a b c "JOLTS". Economic Policy Institute. Retrieved 2021-08-31.
  4. ^ a b "As The Pandemic Recedes, Millions Of Workers Are Saying 'I Quit'". NPR.org. Retrieved 2021-08-27.
  5. ^ "What the Increase in Quit Rates During a Recession Means for Women—and How to Counteract It - Ms. Magazine". msmagazine.com. Retrieved 2021-09-01.
  6. ^ "For some, quitting a job during COVID-19 may make sense". Marketplace. 2020-09-16. Retrieved 2021-09-01.
  7. ^ "What the Increase in Quit Rates During a Recession Means for Women—and How to Counteract It - Ms. Magazine". msmagazine.com. Retrieved 2021-09-01.
  8. ^ "Gender Differences in Sectors of Employment". Women in the States. Retrieved 2021-09-01.
  9. ^ "Women have been hit hard by the coronavirus labor market: Their story is worse than industry-based data suggest". Economic Policy Institute. Retrieved 2021-09-01.
  10. ^ "Hiring Picked Up Last Month, But The Economy Still Needs More Workers". NPR.org. Retrieved 2021-09-01.
  11. ^ a b "U.S. job openings, quits hit record highs in April". Reuters. 2021-06-08. Retrieved 2021-08-31.
  12. ^ Reinicke, Carmen (2021-08-25). "The 'Great Resignation' is likely to continue, as 55% of Americans anticipate looking for a new job". CNBC. Retrieved 2021-08-27.
  13. ^ "What's fueling 'The Great Resignation' among younger generations?". Fortune. Retrieved 2021-08-27.
  14. ^ a b "Hotels And Restaurants That Survived Pandemic Face New Challenge: Staffing Shortages". NPR.org. Retrieved 2021-08-27.
  15. ^ "As The Pandemic Recedes, Millions Of Workers Are Saying 'I Quit'". NPR.org. Retrieved 2021-08-27.
  16. ^ "Millions Lose Jobless Benefits Today. It Doesn't Mean They'll Be Rushing Back To Work". NPR.org. Retrieved 2021-10-09.
  17. ^ Smart, Tim (August 26, 2021). "Study: Gen Z, Millennials Driving 'The Great Resignation'". USNews. Retrieved August 26, 2021.
  18. ^ "JOLTS". Economic Policy Institute. Retrieved 2021-09-14.
  19. ^ Liu, Jennifer (2021-06-09). "4 million people quit their jobs in April, sparked by confidence they can find better work". CNBC. Retrieved 2021-06-28.
  20. ^ Pressman, Aaron; Gardizy, Anissa (2021-06-27). "'A giant game of musical chairs': Waves of workers are changing jobs as the pandemic wanes". The Boston Globe. Retrieved 2021-06-28.
  21. ^ "Table 4. Quits levels and rates by industry and region, seasonally adjusted". www.bls.gov. 2021-09-08. Retrieved 2021-09-14.{{cite web}}: CS1 maint: url-status (link)
  22. ^ "The Work Trend Index: The Next Great Disruption Is Hybrid Work—Are We Ready?". Microsoft.com. Microsoft Corporation. 2021. Retrieved July 8, 2021. 41% of employees are considering leaving their current employer this year and 46% say they're likely to move because they can now work remotely.
  23. ^ "PwC US Pulse Survey: Next in work". PricewaterhouseCoopers. PwC. Retrieved 2021-08-23.
  24. ^ Sozzi, Brian (15 October 2021). "The Great Resignation is ripping through the restaurant industry". Yahoo! Finance. Retrieved 15 October 2021.
  25. ^ LLB Staff, Reporter (2021-08-11). "Pandemic fuels 'Great Resignation' in UK job market as workforce rethinks career priorities". LondonLovesBusiness. Retrieved 2021-08-19.
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