In September, Abel Personnel commented on the scope as well as the opportunities of the Great Resignation, the unprecedented drop in the US workforce from April to August 2021. Updated numbers for the phenomenon indicate:
- 20 million U.S. workers left their jobs between April and August this year, according to the latest federal BLS data. That’s 60% higher than resignations during the same period last year, and the highest rate of resignations since 2000.
- Both July and August 2021 set records for the number of workers who quit.
- Nearly 7 percent of employees in the “accommodations and food services” sector left their job in August.
A second wave of resignations is now upon us. Those still most likely to quit in the next several months:
- Experienced Mid-Career Employees: Included here are those with 5-15 years’ experience in the company, the ones most expected to have a long career with the company. The rate of resignation was about 55% higher than in 2020 for the same period. Relative to age, those between 30 and 50 years old have resigned at least 38% more than the number last year. These are not job-hopping twenty-somethings, early career builders looking for quick raises and promotions, or those seeking early retirement. These are the cadre that holds significant corporate knowledge and expertise, the team leaders and mentors, who were going to be the next generation of senior leadership in your company. They are leaving due to burn-out, increased compensation and better work-life balance, including remote work opportunities. Costs to replace such employees can be up to twice their annual salary, plus the time to replace and the effect on morale.
- Women: The growth in the resignation rate for women (55.4%) was significantly higher than men (47.2%). Research from McKinsey found that one in four women considered downshifting their careers or leaving the workforce entirely. This is further dampening efforts to increase corporate diversity and the documented benefits that companies with more women, especially more women in leadership, perform better.
- High Talent: The pandemic has resulted in a growth of entrepreneurship and business formation after many decades of steady decline in numbers. As many workers were taking time during shutdowns to decide whether to change employment, take a break or permanently leave the workforce, others were able finally to give consideration to starting the enterprise they had been daydreaming about.
- Low Wages: Wages for low-income workers are rising at their fastest rate since the Great Recession. The hiring battle for lower skill positions has now overcome the fights to raise the minimum wage to a living wage. The last two years have lowered concerns about the social safety net, allowing employees who are living hand-to-mouth to move to a better situation as long as labor demand is so high.
The above are the employees that employers need address their efforts at talent retention. The data also suggested some new opportunities to attract workers as a result of the Great Resignation’s first wave.
- Expense Challenges: In the worldwide panic due to the coronavirus, many fled the workplace for health safety and family reasons. Some were able to adjust their lifestyles to align with their reduced income. Others had stimulus payments, rent moratoriums and student loan payment forgiveness that could allow them to live on reduced income. For many, the money is now running out and the suspended expenses are back, and they will soon need to come back to the workforce.
- Second Thoughts: For those who took early retirement or were enticed to leave as employers needed to reduce payrolls early in the pandemic, several months of freedom were not all that they expected or wanted, and they are ready to resume their careers or shift to a new career. The proven benefits to having an older workforce such as an increase in cognitive diversity, broad knowledge and expertise, and mentorship opportunities.
- Trailing Partners: The Great Resignation was accompanied by a great migration, as workers left big cities for the suburbs and small cities for a lifestyle more conducive to living with pandemic waves. Like many job transfers, often there was a trailing partner who sets up the household while the other partner becomes acclimated in the new job. Those trailing partners are now ready to rejoin the workforce at their new location.
- Living with COVID: The combination of vaccine shots with boosters, vaccines for school children (hopefully leading to much fewer breaks in in-person learning) and vaccination/testing mandates in the workplace will together allow others to feel it is now safe to return to the workforce along with the reasons above. This should more than offset those who find the mandates untenable for themselves and their children.
Not all workplaces can adjust or adjust quickly enough to retain all those who are seeing their peers take the leap to a new job, a new venture or to be at home e phenomenon of the turnover contagion, but the four pools of workers above offer some of the best opportunities to backfill the churn. Abel Personnel is constantly reaching out to those groups, and will be ready to present this talent when your need arises.
- com, “These are the People Most Likely to Quit during the Next Wave of The Great Resignation,” November 2, 2021, Andrea Derler
- The Atlantic, “The Great Resignation is Accelerating,” October 15, 2021, Derek Thompson