The Great Resignation

Whether it is the prevalence of hiring signs throughout the country or the changes in business hours due to lack of staff, the ever-evolving workforce is becoming more and more apparent with each passing season. Businesses are trying everything from pitching better pay to improved benefits to signing bonuses, all in the hopes of enticing more staff.

Some refer to the second half of 2021 as the “Great Resignation,” after more than 20 million people quit their jobs. Many researchers contended that shutdowns and time off work during the pandemic brought people a moment of reflection, where they started questioning what they wished to do with the rest of their lives. With transitions from how the world does business to the new incentives that companies offer, many people decided to take the leap and seek a new job or career that may better fulfill their needs.1

Why Are Employees Deciding to Quit?

For those close to retirement age, the changes brought about by the pandemic may have sped up the process. For some, the current incentives by businesses and openings in various fields may have encouraged people to look for jobs that better support them financially and emotionally. Many more women than men quit the workforce. Much of this could be that women are the predominant child caregivers. During the pandemic, shutdowns of schools and day care centers caused complications for some women in the workforce.1

Who Is Leading the Great Resignation?

Employees between 30 and 45 account for more than 20% of the total employee resignations. Even though that is a significant increase for this age group, in terms of leaving the workforce, studies show that younger workers, aged 20 to 25, had the highest turnover rates. This age group faced the most significant financial uncertainty during the pandemic, as demand for entry-level employees declined.2

While the sting of employees quitting impacts almost every industry, resignation rates are highest among those mid-way into their careers. As employers increase their workforce, with smaller levels of staff than before, mid-career employees are finding the greatest opportunities, and they require less training and may be able to handle multiple job tasks with the experience they have.2

Resignation studies found that jobs with increased demand during the pandemic saw the highest rates of resignations, such as positions in the tech and health care sectors. In those sectors, resignation rates were 3.6% to 4.5% higher year-over-year than pre-pandemic levels. In these areas, many of the resignations are the result of excessive workloads and job burnout.2

How Should Employers Work Toward Better Retention?

Instead of taking a wait-and-see attitude, companies need to be proactive about improving employee retention. Companies should identify the causes of recent resignations, finding out what makes their staff leave. After identifying the root causes, a company should design employee retention programs to help solve the problem. As the workforce continues to change, businesses must find ways to attract quality employees and determine ways to help ensure that they stay.2

Footnotes

1 The Great Resignation: Why more Americans are quitting their job than ever before, CBS News, https://www.cbsnews.com/news/great-resignation-60-minutes-2022-01-10/.

2 Who is Driving the Great Resignation, Harvard Business Review, https://hbr.org/2021/09/who-is-driving-the-great-resignation.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual or employer.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

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