Workers in the US are quitting their jobs in droves as the world’s largest economy steams ahead on the path to post-Covid recovery. Yes, you read that right. At a time when markets are finally seeking to capitalise on revenge spending and suppressed demand, millions of workers around the world are simply walking out of their jobs, often without any position in hand and with the smallest clue as to where the prospects lie. But what’s driving this ‘Great Resignation’, which seems to to have assumed pandemic proportions as record job openings arise with seemingly no takers.
How Many Workers Have Left Their Jobs?
Data maintained by the US Labour Department shows that more than 34 million American workers have quit their jobs this year, but the phenomenon seems to have picked up speed post April this year — just around the time the economy began to properly open up. More than 24 million workers of all the job exits have come since that month.
Th pace of people quitting has, if anything, kept increasing. The latest US Labour Department data says that 4.4 million people quit their jobs in September, up from 4.3 million in August. There were 10.4 million job openings in September, down from 10.6 million in August.
Reports say that the number of recorded vacancies has ranged over 10 million for four straight months — the pre-pandemic high was 7.5 million — and there were more job openings in September than the 7.7 million people counted as unemployed. That underscores the crisis of hiring that employers across the US are staring at as the holiday season approaches. Incidentally, there are approximately 5 million fewer people looking for jobs compared with pre-pandemic levels.
Similar trends have been reported in other countries like Canada and the UK. In Germany, more than a third of the companies said they had staff shortages in July, the highest in three years. But while the US jobs turnovers stands out, impact of the Great Resignation is expected to be worldwide. Software major Microsoft in March this year shared the results of a survey that said that 41 per cent of “the global workforce is likely to consider leaving their current employer within the next year, with 46 per cent planning to make a major pivot or career transition”.
Which Sectors Have Seen The Biggest Departures?
Business in the hospitality and retail sector have seen the highest quit rates in the US. Most of these jobs — in restaurants, hotels, stores, factories and suchlike — involve people working in close proximity, recent reports said.
A study earlier, published in the Harvard Business Review (HBR), had found that the healthcare and tech sectors had seen an uptick over the previous year in the number of employees that had quit even as “resignations actually decreased slightly in industries such as manufacturing and finance”.
The HBR report said that “resignation rates were higher among employees who worked in fields that had experienced extreme increases in demand due to the pandemic, likely leading to increased workloads and burnout”.
US Labour Department statistics showed that the ‘quit rate’ in the leisure and hospitality industry was at a high of 6.4 per cent in September, which was more than double the national rate of 3 per cent. Arts, entertainment, and recreation — taken to be a subset of leisure and hospitality — saw the quit rate climb to 5.7 per cent from 3.2 per cent.
What Are The Reasons Driving People To Walk Out On Their Jobs?
Reports say that the spate of resignations is being fuelled by workers seeking to move into more lucrative positions or better working conditions even as employers compete with each other to augment their staff rosters ahead of what is expected to be a hectic holiday season.
But then there are those who have quit and are not looking to take up a new job, at least not immediately. This category is made up of those like mothers unable to find or afford child care or people who are not comfortable returning just yet to jobs that involve working in close physical spaces with others.
Then there are those American workers who have saved up on stimulus checks they received during the pandemic and find that they have something to fall back on as they re-assess their life and career priorities. Findings from a global survey conducted by consultants EY earlier this year had 54 per cent of the respondents say that they would consider leaving their job after the pandemic subsides if they are not afforded some form of flexibility in where and when they work.
The Microsoft report, ‘The Next Great Disruption Is Hybrid Work—Are We Ready?’, notes that the switch to remote work has a lot to do with workers deciding to quit, one way or the other. Going forward, the report says, the majority of workers would prefer a hybrid model of work given that remote work “has created new job opportunities for some, offered more family time, and provided options for whether or when to commute” even as working in silos has meant that “digital exhaustion is a real and unsustainable threat”.
So, Who Are Quitting?
The HBR report said that resignations were highest among mid-career employees aged between 30 and 45 years even as the quit rate declined for younger employees, typically regarded as being the most footloose workers. Workers in the 20 to 25 age group, the report said, may have preferred to hold on to their jobs due to a “combination of their greater financial uncertainty and reduced demand for entry-level workers”.
HBR said that resignation rates also fell for workers in the 60 to 70 age group while hose in the 25-30 and 45+ age groups, too, saw higher quit rates as comparted with 2020.
As to why mid-level workers are seeing the highest turnover rates, HBR says that it could be because companies are showing a preference for hiring people whom they won’t immediately need to train for new roles and having workers with some level of experience is the best way to keep processes running as smoothly as possible.
But the report also notes why the decision to quit for many employees would likely have depended on burnout and high pressure at work coupled with pay cuts and despondence arising out of a lack of growth prospects during the pandemic.
Mental health experts and industry watchers have observed a distinct change of priorities imposed by the pandemic with people now looking at better quality jobs that promise greater balance between professional and personal lives and provide fulfilment in the roles offered.
As economies firm up more post-Covid, experts expect that workers would slowly trickle back although a Goldman Sachs report estimates that businesses may still be staring at a much smaller workforce than before the pandemic, which means that labour shortages may be a continuing reality for months or even years to come.
What’s Happening In The Indian Jobs Space?
Employees walking out in India has not assumed the kind of pandemic proportions being reported elsewhere, but experts point out that neither is the job market and social security net comparable with that in advanced nations.
Informal sector jobs took a heavy beating during the pandemic in India and millions of workers are estimated to have left employment in the cities to head back to their homes in the hinterland. As much as 80 per cent of informal workers lost their jobs during the lockdown, a report said.
But the country is also tipped to see a robust jobs recovery as the economy sputters back to life. Reports point to substantially higher job openings as compared to the same period last year. The tech sector, especially, is witnessing hectic movement as companies expand hiring to build capacities. That also means that attritions are riding high.
Estimates by the hiring firm TeamLease suggest that the IT industry will have a high attrition rate of about 22-23 per cent in 2021 with more than 1 million resignations expected.