4.3M americans left their job in August
The pandemic brought on a lot of chaos across the world. From supply chain shortages to mass layoffs, to mass resignations, there has been a big shift in the world, and even almost two years after the start of the COVID-19 pandemic, the world is far from what we considered normal prior to the massive changes we have seen.
In August 2021 alone, around 4.3 million people quit their jobs. This was the highest number of resignations in a month since December of 2000. This may seem like a relatively random time for so many resignations, but if you look at the data it makes sense. Somewhat.
The majority of the people who quit their jobs in August 2021 live in the South and the Midwest. These regions were being hit the hardest by COVID surges in August, compared to the rest of the country. The resignations that may have happened early for COVID reasons happened later in the South and the Midwest than they did in New England and the Northwest.
Despite the high number of people quitting their jobs, there remains to be a huge number of open job opportunities that do not seem to be getting filled. Usually, when someone quits their job, it is to look for a different job. Whether this is something that pays them more or is just an overall better fit for them, they tend to rejoin the job market. This does not seem to be happening though as much as we would expect.
July 2021 held the record-high number of available jobs at 11.1 million jobs in the United States. The Department of Labor states that open positions have increased by 62% in the past year, but overall hiring has declined. This discrepancy seems difficult to understand, but individuals believe they have a good reason for quitting their job and not taking an abundantly available job.
What Industries Were Affected by Workers Quitting?
Usually, when there is a mass resignation of workers, it is somewhat concentrated in one industry. The job openings we see now, span almost every single industry. That is not to say that some industries are not impacted more than others, but this is a very unique job market scenario.
As COVID started to surge again this summer and the Delta Variant became a concern for many, the restaurant and hospitality industry saw a sharp increase in unemployment. This suggests that those who face strangers every day may have gotten spooked by the Delta Variant and didn’t think their jobs were worth the risk.
If you have been to any restaurants lately, then you are probably aware of the labor shortage. Most restaurants and businesses in the hospitality industry are short-staffed meaning you have to wait longer for your food and service, and they might even enforce a decrease in capacity meaning you might need to wait longer for a table.
That being said though, it is not just public-facing industries that are seeing a loss of workers and unanswered job advertisements. Most industries are having a very difficult time finding workers who are a great fit.
Why are People Staying Unemployed?
There seems to be a mismatch between the needs of employers and the needs of workers. Right now there are about 10.4 million open jobs compared to 7.4 million people unemployed. Looking at this from a surface level, the math doesn’t add up. Why aren’t people snatching up the abundance of jobs on the market right now?
One simple reason is that a lot of the jobs on the market are bad. Whether they are unappealing because they pay low, they require in-person work every day, or they face the public, people are not taking them.
Aside from the misalignment of available jobs and unemployed workers, people have realized and acted upon a shift in priorities. Now that people have gotten a taste of what it is like to have the flexibility of working from home, some don’t want to go back to in-office jobs.
As with most of the job market, childcare facilities are experiencing a worker shortage, resulting in increased costs for childcare. Many people cannot afford this and so they are forced to stay home with the children instead of keeping their jobs and paying someone else to watch their children.
Another issue that parents are experiencing, is the uncertainty that schools are going to remain open. There have been COVID outbreaks in primary schools all across the country, which inevitably leads parents into a forced quarantine if their child gets sick, or even if they are exposed to it and sent home from school due to closures. There is a really significant problem with childcare right now and until that is somehow solved, some parents are not able to go back to work.
Aside from the necessity to stay home and care for your children, other people have simply decided that they no longer want to go back into the office. The past nearly two years have shown many people that they are just as productive at home as they are in the office.
Reasons for wanting to stay home may vary from person to person but may include the unwillingness to go back to a tedious morning and afternoon commute, enjoying the flexibility to travel for a few days and not having to use any paid time off, or the luxury of being able to make your meals at home instead of buying lunch or pre-packing meals to bring into the office.
Of course, an extremely valid and contemporary issue is that some people just do not feel safe going back to the office yet. The pandemic is not over and whether people are worried for themselves, or other people they live with, they are just not willing to take the risk of getting infected with COVID-19.
Another really important thing that the pandemic has done for workers is shifting their mentality away from centering work on their identity. When you find yourself going into the office for eight hours a day five days a week, it is easy to slowly start centering your identity on your career. When you have the ability to be home more often, you have time to think about and develop other parts of your identity like your family, your hobbies, and your friendships.
There is, of course, an opposing side to this rhetoric that working from home allows you to reclaim your life. For some, working from home collapses the boundaries between work life and home life, creating an unbalance in work vs. home life.
Some feel like they are always obligated to work now since their office is right there in their home. For some, going into the office is a necessary way to keep structure in their lives. Feeling as though work is creeping into your personal life is never a good feeling.
Our Survey
We put out a survey on LinkedIn to see who left their jobs and why they did so. We received 255 answers. Our results showed:
12% Wanted to go remote but didn’t have the option from their bosses.
25% Left the job to start their own business.
63% of respondents said they were looking for a better job or more money
Many respondents also commented on our poll, giving us more detail on why they left their job. Most of our replies mentioned a shift in priorities and realizing that life is too short to do something you do not like to do! Many people are shifting industries or taking some time off to do something they enjoy and spend some time with their loved ones.
Is This Unemployment Pattern Uncommon?
Economists are calling this period of mass quitting “The Great Resignation”. Does that mean that this is an extremely uncommon pattern that we have never seen before? No. Though more people quit their jobs in the past few months than ever before in history, this is not the first time in United States’ history that we have seen a resignation pattern.
A great myth in American culture is that in the golden age of American jobs, workers stayed at the same job for 40 years and never quit or looked for something else. That is not true! People in the 1960s and 1970s quit their jobs more often than they have in the past 20 years.
Just like it is happening now, people quitting their jobs in massive waves was great for workers back in the 1960s and 1970s. It created a stronger demand for employees and made companies desperate which in turn, ended up raising workers’ salaries a staggering amount.
In fact, companies are so desperate for employees now that even workers who are happy in their current roles may be looking outwards at other opportunities that are offering significantly higher pay. The job market is a mess right now for employers, but workers definitely have the upper hand right now.
Who is Quitting Their Job?
We have covered various reasons why people are leaving their jobs so the people who are quitting jobs in the service industry may have drastically different reasons than those who are leaving their jobs in the tech industry, for example.
Harvard Business Review found that resignation rates are highest among mid-career employees. Employees between the ages of 30 and 45 years old have had the greatest increase in resignation rates in the past year of an increase of more than 20% between 2020 and 2021.
Harvard Business Review found a few reasons that could be contributing to this odd pattern. For one, businesses may be hesitant to hire entry-level workers with no experience since the pandemic is still shining a lot of uncertainty on whether or not companies will remain operating in the office.
Another reason is that many of the people in this age group may have potentially left their positions early had it not been for the uncertainty brought on by the pandemic. The last reason they present is that many of these workers have reached a breaking point after months of work from home and they are desperate for a change.
Another factor that could be contributing to this trend is that companies are offering much higher salaries for new hires than they were a few years ago. Many people from the ages of 30 to 45 are probably not making what they would be making in salary if they began their same position today. Changing careers is an excellent way to get a wage increase, and most likely everyone knows it.
An interesting trend that Harvard Business Review noted was that turnover rates of employees in sectors like healthcare and tech are much higher than in other industries. This could be due to the increased demand put on these industries due to the pandemic. Workers may be feeling burnt out and sick of their role. They may be looking for a different role in the same industry, or completely changing their path and doing something in a different industry.
What Are Companies Saying About the Worker Shortage?
Companies are in a really tight position. Depending on the sector or industry they find themselves in, being short-staffed is not a sustainable option. Many companies are being forced to scale down in size, but many companies would much rather fill the positions they have open.
For many companies, “The Great Resignation” has forced them to look inwards and reflect on how they can be a better employer for their workers. Not only do businesses need to worry about and figure out how to find new workers, but they need to worry about worker retention.
As the year comes to a close, there is a good chance that we may see even more people moving away from their current employer. Many are hesitant to look for jobs during the holiday season so companies should really be prioritizing their workers so they do not lose them in the new year.