The Great Resignation

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Why Millions Of Workers Are Quitting

In October 2021 CNBC produced a video exploring why in August 4.3 million Americans quit their jobs. 

Job security and better pay are top concerns for some people, while others have left the workforce entirely. The exodus of workers has created hiring challenges for companies and left millions of jobs unfilled, which has been dubbed “The Great Resignation”.

According to Bankrate’s August survey, more than half of U.S. workers said they plan to look for a new job in the coming year.

56% of respondents said flexible working hours and remote work were a priority. Women have faced an additional burden of juggling childcare duties, virtual schooling and their careers.

Below is a transcript of the video.

Video Transcription

Reporter
Americans are reassessing the way they work. According to an August 2021 poll. More than half of workers surveyed said they planned to look for a new job in the coming year. 56% of respondents said adjustable working hours and remote work were a priority. And while some people have left the workforce entirely, job security and better pay are also top concerns for employees.

Jessica Thomas
It’s time to find something that is going to be better for my family, something more stable, something that I can provide where I don’t have to go to work and be like, oh, am I going to get fired today, or is he not going to be happy with the service?

Reporter
In August 2021, almost 4.3 million Americans quit their job. The resignation rate hit a 20 year high of 2.9%. Working women have faced an even heavier burden juggling childcare duties, virtual schooling, and their careers.

Anthony Klotz
We’re all able to take a step back in the last year and spend more time doing other things and really question the value of what we’re doing at work. A number of people have made the decision. I need to make a change. I need to simplify.

Reporter
Dubbed the Great Resignation. The exodus of workers has left millions of jobs unfilled and created hiring challenges for companies. So what does the realignment of the workforce mean for employees and businesses? And what steps should you take before quitting your job? US workers are leaving their jobs in droves. In August 2021, almost 4.3 million Americans handed in their resignations, including 971,000 people working in the leisure and hospitality industry, which includes hotels and restaurants. Another 1.3 million workers were laid off or discharged by their employer. Jessica Thomas is one of those workers.

Reporter
She spent nine years in the restaurant business in Northern New Jersey before Covid hit with cases surging and customers avoiding dining out. The bar where she worked temporarily shut its doors in the spring of 2020, leaving her without a job and a paycheck.

Jessica Thomas
But also in that industry, if you’re not working you’re not making money. So there are no sick days, there’s no vacation time, there’s no health insurance.

Reporter
Uncertain when her job would restart. The mother of three found herself at home relying on unemployment benefits. Her husband, Derrick, who works as a bartender, faced a similar dilemma.

Derrick Thomas
A lot of people took the time, that when you had the time off and you’re sitting home collecting unemployment, they took the time to find other careers.

Jessica Thomas
I didn’t hear anything from the owner until, I think it was the day before when he was going to “okay, we’re reopening”. There was no communication, nothing. So for me, that kind of just made me want to get out of that industry.

Reporter
In August 2021, the separation rate for hotel and food service workers, which includes quits, layoffs and retirements, increased to 8.3% from 6.7% the month prior. And while the pandemic has caused a severe blow to employment, overall, it has especially impacted working mothers. As of January 2021, there were 18.5 million US mothers living with their school-aged children while actively working. 8% less than a year earlier, on the advice of her brother in law, Jessica applied for a job at the Port of Newark, New Jersey, home to the East Coast busiest Port.

Jessica Thomas
When I went in, the gentleman at the door said “You’re at the wrong building”, and I said, no, I’m at the right place. He goes, “No, the nurses for the Covid testing the other building”. I said, “No, no, I’m here to apply to be a long shore woman”.

Reporter
In Jessica’s new job as a long shore woman, she helps load and unload cargo ships that bring in electronic apparel and consumer goods from around the world.

Jessica Thomas
One day I drove 1,700 Toyotas off of a ship. We got there at 07:00 a.m.. We got done at 5:00 and you drive the car off, get back in the van, go back up, drive the car off until the ship’s done. Nobody leaves until the ship’s complete.

Reporter
Her new job also gave her a salary boost, double the pay of her previous job at the restaurant, with benefits ranging from paid vacation to health insurance. And according to a May 2021 survey, Jessica is not alone. Almost half of workers polled said they are rethinking the type of job they want in the future. More than half said they would retrain for a new career if they have the opportunity.

Jessica Thomas
I feel like I’m always trying to find balance in my life, balancing with working and all the kids stuff my relationship with my husband every day. It’s like, “Okay, how am I going to do this? How am I going to get through this?”

Reporter
According to an August 2021 study, almost a third of workers at large US companies said they are likely to change jobs in the coming year. Younger workers are even more likely to uproot their careers. Half of Gen Z workers, particularly those struggling with productivity and time pressure issues at work, plan to switch jobs in the coming year. According to one financial planner. There are three solutions to remedy a non-ideal work situation. For starters, small changes can make a big difference. The easiest and least disruptive way forward for you and your company is to tweak the job you already have.

Anthony Klotz
So I would encourage employees to go have what I would call a job, crafting conversation with their manager and say “I love the 60%, this 40%, not so much. What can we do?” And that could be everything from maybe you just cut back to three days a week and your job becomes a smaller job.

Reporter
Volunteering or side hustle could be another way to cultivate experience and explore new industries. Another benefit. After a couple of months, you can stop, continue or test out something else. And finally, if you’re in a job that is mentally or physically trying, has a poor work-life balance or limited growth opportunities, that may be a signal it’s time to look for a new job. But before quitting, financial planner Roger Ma advises to take a look at your financial situation and find out how much it costs to fund your lifestyle.

Roger Ma
Then once you know that number, let’s just say that your expenses are $50,000 and to be able to fund that, you need to make $80,000, then you can start to look at what are the roles? What are the positions? What are the industries that pay that amount? It might be roles in a similar industry that you’re in. Or maybe you’ve been in your industry for a while and you’re looking to pivot.

Reporter
While searching for a new gig financial advisers say it’s easier to find a new job if you already have one, and it also puts you in a better position to negotiate your salary. Leaving on good terms is another tip.

Anthony Klotz
Even though you may think I will never come back to this company again, a little insurance policy would be leaving on the best note possible. So maybe you leave that door open to boomeranging back at some point in the future.

Reporter
The US has seen a record number of people quit their jobs. But what’s led to the boom in resignations? Several factors. According to Anthony Klotz, associate professor of management at Texas A and M University. For starters, the Pandemic forced Americans to take a hard look at their lives and reevaluate their careers.

Anthony Klotz
But as a result of the deep thinking that people did during the Pandemic, I reasoned that a number of them would plan life pivots coming out of that. Sometimes those life pivots would not involve a job change. But in many cases because of how central careers are to our lives, it wouldn’t necessitate a career change.

Reporter
Working from home was another factor. According to Klotz, a number of people who worked remotely at the start of the Pandemic have been unwilling to give up their autonomy.

Anthony Klotz
I think what we’re finding is the number of employees who worked remotely felt like they could be more of themselves than they could in the office. And maybe in some cases they felt like there was less harassment, less micro-aggressions wear the clothes that they want their hair the way they want.

Reporter
Burnout and mental health are another component. According to one survey, longer work weeks have become even more embedded in business culture, and the boundary between work and personal life has shrunk. More than 40% of workers at large US companies said they had difficulty setting work and personal life boundaries, and almost 45%, said they felt pressure to be reachable at all times.

Anthony Klotz
There were lots of reports that burnout was at all time highs for individuals, and burnout is a pretty clear predictor of people quitting their jobs.

Reporter
Increased economic independence has also led to the rise of resignations. According to an August 2021 study from Oxford Economics, Americans saved an additional $4 trillion during the COVID Pandemic, while about 70% of the game went to the wealthiest 20% of Americans, analysts say the economic uncertainty of 2020 for as many people to delay their retirement plans until 2021.

Anthony Klotz
My sense is early retirements are up. People taking a break from the workforce like their own Sabbatical is up, and that’s supported by 2020 was only the second year in the last 35 years where American household debt actually went down.

Reporter
Businesses across the US are struggling to find workers. In August 2021, there were 10.4 million job openings across the country, according to a Q3 2021 CNBC survey: Half of small business owners say it’s harder to find competent people to hire than a year ago, and nearly a third said they have jobs they haven’t been able to fill for at least three months. But while the number of job openings has reached historic proportions, it might not be an entirely new phenomenon.

Anthony Klotz
Since the Bureau of Labor Statistics began tracking this back in 2000, the rate of employee resignations per month has gone up fairly steadily over the past 20 years.

Reporter
To entice workers back, employers have come up with incentives ranging from College tuition to signing bonuses. In August 2021, Target announced a program to pay 100% of its workers college tuition. The big box retailer said, in addition to tuition, it would cover textbooks and fees for employees pursuing 250 College programs at more than 40 institutions. Chipotle, Starbucks and Walmart offer similar debt-free education programs. Other companies have boosted pay, McDonald’s announced in May it was raising hourly wages at company-owned restaurants. Walmart, Under Armor and Walgreens have announced similar pay hikes.

Reporter
And according to analysts, hiring new employees is only half the battle. Companies face a steep penalty if they are unable to retain employees, they already have.

Roger Ma
I think it’s incredibly expensive to lose talent and especially a lot of talent. And so you’ve got the loss of maybe this person has been thinking about it for some time. They’re unhappy. So you’re not getting the most out of them while they’re there, and then eventually, when they decide to leave, you might have to spend several months to be able to attract new talent.

Reporter
According to a 2017 study by the Work Institute. Based on a median US salary of $45,000, the average cost of turnover per employee is $15,000. That figure includes direct costs like exit processing and relocation expenses, as well as training costs and lost productivity. According to the group, the cost to US employers from worker resignations in 2016 alone was $536 billion dollars. But despite these issues, analysts say that the wave of resignations we are experiencing could ultimately lead to an improvement for the lives of both workers and the organizations that employ them.

Roger Ma
I think the one silver lining out of this is that the Pandemic has gotten people to review or question things that they have done in the past and maybe if you have been on autopilot it’s giving you that kick to say “this job. I’ve been on autopilot, this doesn’t really align with my interest or my long term goals, and I’m going to make a change”.

Anthony Klotz
With this many resignations that means there’s lots of talented employees who aren’t working right now for any number of reasons. And so a lot of organizations see that it’s an opportunity as well to improve their organization and improve their talent pool.

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