If you’re a recruiter, the current labor market must sometimes feel like a dried-up oil well, and the so-called Great Resignation is the subterranean straw drinking the rest of your milkshake.
Or is it? The term “Great Resignation,” which has become shorthand for the record number of people leaving their jobs since the beginning of the pandemic, reached a new milestone this past November: 4.5 million workers quit their jobs, a new record, according to the latest report from by the Bureau of Labor Statistics.
But while the mass exodus of workers from their jobs is historic, the term might be a bit reductive in capturing the full scope of what’s happening, according to Guy Berger, principal economist at LinkedIn. “There’s sort of an unfortunate…train of thought that sometimes pops up, which is claiming that people don’t want to work in the wake of the pandemic, that I think is just not true,” he told HR Brew.
Berger maintains that the data portrays more of a “Great Reshuffle,” in which workers are quitting their jobs in record fashion, but instead of embracing idleness, they’re probably leaving old, worse jobs for new, better jobs, as Berger recently wrote on Twitter, citing BLS data from earlier in 2021.
Behold the data! “Resignation does not mean that people are quitting and leaving the workforce; it just means they’re quitting,” Anthony Klotz, a professor of business administration at Texas A&M University, said. Klotz has been credited with coining the term “Great Resignation,” and still thinks it’s the most applicable descriptor, largely because BLS data doesn’t specifically indicate what people do once they hand in their resignations. The only thing we really know is that, month over month, scores of workers are quitting.
“The BLS provides us data with how many resignations are happening voluntarily, but we don’t know necessarily why they’re happening, or where they’re going,” Klotz explained to HR Brew.
In contrast, Berger argues that hires need to be taken into account in order to grasp the broader picture. When looking at the broad arc of the job market, the number of hires has largely stayed the same. According to the latest BLS report, the US added 199,000 jobs in December 2021, falling short of predictions made by economists.
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“People are leaving jobs, and they’re starting jobs,” Berger said, adding that “hires tend to be higher in sectors where quits are higher,” which suggests that a reshuffling is occurring. “That’s why a reshuffle—people moving around from one place to the other—seems, from our perspective, a much better description of what is going on,” Berger explained.
Tired & retired. Oh yeah, there’s also retirement, as a growing number of workers aged 55 and older are leaving the workforce. In a Pew survey last November, 50% of US adults older than 55 said they retired, up from 48% in the same quarter of 2019, before the pandemic. The Federal Reserve Bank of St. Louis noted that “there were slightly over 2.4 million excess retirements due to Covid-19” by August 2021.
There’s a balance between quits and hires at play, but certain sectors are reckoning with the consequences of high turnover more than others. Industries on the front lines of the pandemic, such as retail, leisure and hospitality, health care, and manufacturing were hit hardest by departures in November. The accommodation and food-service sector notched its highest number of quits in a calendar year at 920,000, according to the JOLTS report.
Klotz said he lacks conclusive data indicating what workers do when they quit their jobs, but said “you can imagine” that workers in these traditionally lower-paid sectors “are leaving and going to other jobs within the same industry.” An analysis from the California Public Policy Lab last month suggested this is the case, finding that many workers who leave accommodation and food-service wind up back in the industry.
Play the retain game. For organizations trying to retain workers who may be tempted by greener pastures, it’s important to understand how to entice them to stay. Berger’s main advice is to heed the calls for higher wages, greater work-life balance, and higher degree of personal autonomy when it comes to working from home. “You just can’t be complacent,” Berger said. “You’re going to have to offer more. And if you’re not willing to offer more, people are going to leave.”—SB
Do you work in HR or have information about your HR department we should know? Contact Sam Blum via the encrypted messaging app Telegram (@SamBlum_Brew) or simply email [email protected].