Almost daily, my employer clients are telling me about their inability to hire workers to fill job openings in the Texas Panhandle. This local trend reflects a nationwide problem. The Bureau of Labor Statistics just reported last week that 4.3 million people left their jobs in August 2021, the highest “quits rate” since the BLS started tracking the numbers in 2001.
Industries that were most affected by this high quits rate in August included hotels, bars, restaurants, retail, manufacturing, construction, healthcare and education. The media has dubbed this as the “Great Resignation” or the snappier “Big Quit”.
We knew this was coming even before the BLS released that report on October 12. Surveys by Microsoft and by the Society for Human Resource Management earlier this year both found that 40% of employees say they have or will quit their jobs in 2021. That’s double the number in 2019, just before the pandemic.
There are lots of reasons why employees are participating in the “Big Quit” and employers are having such a challenging time filling open positions. But the reasons are not solely, or even chiefly, related to government handouts. Ending the federal supplement to unemployment in Texas and other states at the end of June 2021 didn’t create any improvement in employers’ ability to hire. In fact, the recent BLS numbers showed that employees walking away from their jobs markedly increased after the unemployment benefits expired.
Reasons for the Big Quit
The reasons for the Great Resignation seem to be related to what employees discovered about themselves and their jobs during the pandemic:
- More than four million Americans dropped out of the labor force entirely during the pandemic, particularly women and workers over 55 years old. They had reasons ranging from childcare duties, to early retirement, to concerns about contracting COVID. Sixty-eight percent of workers who told SHRM that they were going to quit their jobs in 2021 said that they decided to make a change during the COVID-19 pandemic. Extended time at home has convinced many workers that they are dissatisfied with their current career and would rather transition to being a stay-at-home parent, pursue a new educational opportunity, look for a better job or retire.
- A huge wave of Baby Boomers retired, many because of unpaid furloughs during the pandemic. But a year later, even more are retiring, reporting that they have reached the point of exhaustion and will be happier if they leave the workplace altogether, even if it means a less healthy retirement income. The estimate is that 10,000 Boomers retire each day in the US, and because the following generations are smaller, finding and retaining replacements for the Boomers is proving difficult and a long-term problem, projected to continue for the next 10-15 years.
- Restaurant staff, grocery store employees, delivery drivers, heathcare workers, teachers, retail workers and others reached their breaking points. “Throughout the pandemic, essential workers – often in lower paid positions – have borne the brunt of employers’ decisions. Many were working longer hours on smaller staffs, in positions that required interaction with the public with little to no safety measures put in place by the company and, at least in the US, no guarantee of paid sick leave. It quickly burnt workers out,” concluded a BBC report.
- Low wages are a hugely motivating factor in the Great Resignation. The federal (and Texas) minimum wage hasn’t increased above $7.25 since 2009, even though the consumer prices have. An item that cost $7.25 in 2009 now costs $9.27 in 2021. Employees who make these minimum wage know that they sink further into poverty every year, and they are running away from low paying jobs as fast as possible.
- The SHRM survey found that 53% of the people leaving their jobs in 2021 did it for better compensation. Employees who are stressed and in low satisfaction jobs with irregular schedules like food service don’t have to perform that work anymore for the low wages that employers were paying before the Big Quit. “Workers’ wages are rising at the fastest pace in years, due largely to structural shifts in labor markets, talent supply challenges and potential inflation. Research shows 72% of companies are updating pay and benefits programs in 2021 to address multiple challenges”, according to Forbes.
This kind of massive reorganization of the labor market happens after world wars and economic recessions. The COVID pandemic has apparently created the same type of seismic shift where it is a seller’s market for employees to demand and receive better employment perks in exchange for agreeing to perform the work.
So what should a Texas Panhandle employer do to improve recruiting of employees for all those open positions in 2021?Continue reading How to Hire and Retain During the “Big Quit”