Unpacking the Great Resignation
You don’t have to look far to see firsthand evidence that the U.S. is in the middle of one of the most severe labor shortages in its history. A walk around your own city or town confirms it with countless storefront signs: ‘HELP WANTED,’ ‘APPLY TODAY!’, ‘Now Hiring Friendly Faces.’ Five million people have left the labor force since the start of the pandemic at the beginning of 2020. But where have all the “friendly faces” gone?
The Coronavirus Catalyst
COVID-19 is, of course, central to any Great Resignation conversation. As the pandemic has run its course over the past two years, it’s caused distinct changes in the U.S. economy and labor supply:
- Initially, coronavirus impacted the workforce by prompting mass droves of layoffs; as the stock market plummeted amid economic uncertainty, employers released workers who were not essential to the core of their operation. Additionally, boots-on-the-ground businesses (companies not able to conduct work remotely) were forced to close their doors in conjunction with quarantine mandates and faced months of minuscule to nonexistent profit margins. Businesses that were able to stay afloat had no choice but to dramatically cut back on staff. It is estimated that over 30 million Americans lost their jobs in the spring of 2020.
- It didn’t take long for many of those workers who managed to hang on to their jobs amid the evolving pandemic-scape to become disillusioned with the “new normal.” Whether working double-time to make up for dismissed coworkers or just suffering from burnout (especially prevalent in the healthcare fields), nearly one-fifth of workers reported dissatisfaction with how they were treated by employers during the early phases of the coronavirus. This brought the first wave of voluntary “job separation,” heralding the coming tsunami of resignations.
- Meanwhile, other employees opted out of their paychecks over safety concerns regarding increased exposure to potentially infected customers or colleagues. This is especially true in the restaurant and retail industries, where the “quit rate” was more than double the overall national figure (as of October 2021).
Let’s consider the numbers. Whatever the resignation justification, research shows that 20% of people quit to follow their passions, forge a new career path, or switch industries. Similarly, another 20% of people reported that the pandemic pushed them to pursue, specifically and exclusively, roles that are conducive to remote work.
November 2021 saw the country’s record resignation rate, topping out at 4.5 million accumulative “quits” for a total of 6.9 million unemployed Americans. With November’s 10.6 million job openings, each one of these 6.9 million unemployed Americans had an average of 1.5 available jobs to choose from—the highest ratio in over 20 years. What does it mean when there is both a record number of out-of-work people and a record number of positions for them to fill? The United States workforce is choosier than ever before.
At Opptly, we pay close attention to that particular point, having built our direct sourcing platform around the specific goal of making ideal matches between opportunity seekers and hiring companies—matches not simply based on job descriptions but also on extrapolated “softer” skills and an understanding of people’s workstyle needs and wants.
Supply and (Workers’) Demand
What is keeping the supply of workers from filling the demand of job openings? One deterrent is that issue of workstyle needs, especially the ability to work remotely. Surveys show that the majority (54 percent) of workers prefer a job that lets them work from home, but only ten percent of jobs currently offer that option.
Not only does Opptly’s specialization in finding candidates everywhere to fill roles anywhere align well with the remote-work trend, our focus on matching the right person with the right work opportunity helps minimize the second guessing, worker burnout, and employee regret that have caused so many people to walk out on their employers.
Of course, the demand for more flexible work models is not the only factor curbing the workforce. Many of the employees who left their jobs to fill their own need for childcare have chosen to remain at home, having found a happy equilibrium in their new circumstances. Another portion of the unemployed is still living off stimulus checks and/or unemployment benefits. For some people, the weekly allowances of these benefits may be comparable to the wages they were previously earning. In both cases, the financial cushion allows them to take time to find more satisfying or rewarding work.
Yet another factor is pandemic anxiety; that same fear of infection that caused many workers to resign in the first place may find potential workers preferring to stick to the sidelines, especially those who work in customer-facing industries like hospitality, travel, restaurant, and retail.
Regardless of each person’s reason for remaining unemployed, their decision to do so (en masse) has culminated in one hard-to-swallow pill for businesses: the power of choice resides with the workforce. The ball is in employers’ court to raise wages, offer generous sign-on bonuses, and where possible, bend business models to accommodate things like remote work or flexible schedules.
The Good News
When considered from another angle, the Great Resignation becomes a rich field of opportunity within the talent acquisition landscape. In fact, economists are flagging these trends as a sign of a very robust economy, one with a “healthy dynamism.” More workers than ever are looking to find their ideal, not just their next job. More companies than ever are looking to hire top talent. If that’s not the ripe situation for a direct sourcing platform, we’re not sure what is.
The circumstances have never been better to do what Opptly does best: connect great people with great work. Ready to let us help you leverage this new pool of talented candidates? Get in touch.
List of sources for reference:
https://fortune.com/2022/01/04/great-resignation-record-quit-rate-4-5-million/
