Friday, December 31, 2021

The Great Resignation: Who’s Doing It, Why Is It Happening, What Options Do People Have, How Long Will It Last?

We’ve heard a lot about people not only refusing work but leaving their positions.  How can we understand it better?

Per Paul Davidson, updated December 9th in USA Today, “Job openings hover near all-time highs as Great Resignation shows little sign of easing.”  As of most-recent-data-month October, there were 11 million advertised opportunities, which “have topped 10 million for five straight months.”  As reasons, Davidson cited people taking advantage of higher starting pay elsewhere, wanting to work from home, discontented with pandemic-time employer treatment, wanting “new career paths,” feeling lacking in “work-life balance,” and, once again, going into business for themselves. 

As for those soon to depart, Andrea Derler, in Fast Company on November 2nd, told us “These are the people still most likely to quit during the next wave of the Great Resignation.”  The author called “quitting your job” “the hottest trend in 2021,” and per this publication’s research said that “resignations were occurring at alarming rates for tenured, long-term employees,” that figure increasing over 50% for those with 5 to 15 years of service since 2020, for reasons including “burnout following the impact of the pandemic on their organizations” as well as those Davidson named.

Many have wondered “How millions of jobless Americans can afford to ditch work” (Allison Morrow and Anneken Tappe, MSN.com, updated December 29th), of which the authors found, of a 3.6 million two-year increase in people claiming no interest in work, 90% to be 55 and older, who often have “accelerated their retirement” helped by higher stock and house prices.  An economics professor blamed some departures on “a job quality shortage,” rightfully more meaningful than the alleged one of workers. 

Another root cause was the subject of “Ken Coleman on workforce flight:  COVID-19 pandemic changed what workers value in a job” (Kristen Altus, Fox Business, October 27th).  Here we learned about a Ramsey Solutions report showing that “6 in 10 workers said the COVID-19 pandemic changed what they value in a job or career and 52% preferred to work fully remote if possible.”  Also, per the title’s author and radio host, “55% of workers are considering a job change for a career that better aligns with their values,” and he considered “impact” maybe more critical than pay rates. 

Gray areas between full employment and full retirement have become increasingly populated, leading to Jim Probasco’s December 21-updated Investopedia.com “The Rise of the Semi-Retired Life” with subhead “Leaving work completely is not the only choice as retirement age nears.”  Probasco defined semi-retirement as working fewer hours or changing to a “less stressful” full-time position.  Per a Pew Charitable Trust study, “31% of retired women and 50% of men said they worked part-time because they wanted to do so.”  Other options the author put in the same category included self-employment efforts, beginning “a new career based on an interest, passion or hobby,” and consulting. 

How long will this movement continue?  Per Justin Wolfers in The New York Times on December 3rd, “The Great Resignation Won’t Last Forever.”  His main point seemed to be that job shortages, when they start, can precipitate fear among those with employment, causing them to keep that they have.  Yet we aren’t there yet.

Overall, what can we say about the rate of people leaving their positions?  Although it will of course shift sometime, it doesn’t need to be soon.  However, we should not confuse greater affluence, including a 15% rise in total household net worth between the third quarters of 2020 and 2021 per the Federal Reserve, with a permanent situation.  While most people recently choosing retirement, or a mild semi-retirement, will never return to their previous states, younger Americans will need money too much to stay on the sidelines for long.  Once again, the market will speak.

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