Four Points About the Great Resignation
“Numb”, “Checked Out”, “Searching”, “Wanting”
As I’ve resumed traveling for work, I’ve also been talking – outside of Zoom – with clients, fellow conference attendees, and strangers in coffee shops and airports about how they’re doing. Their answers are bluntly honest and sum up feelings that many of us have experienced at some point or are still working through. They also underscore the collective mood in the country regarding our relationship with a work-life balance.
These feelings are driving many to take professional leaps – or leave the workforce entirely. The Great Resignation is poised to be the defining title of the 2020-2025 period.
Here are four quick thought-starters to help understand the Great Resignation:
There will not be sudden great reemployment; the motivators for people leaving work are complicated. But there are areas where communities can respond, such as creating childcare and eldercare support for working families, helping employers enhance their employment opportunities, and assisting career changers as they upskill.
Communities with a majority of low-wage, low-skill jobs and policies that incentivize their creation must refocus and retool their economic development and talent pipeline efforts. It’s also important that communities understand the prevalence of low-wage, low-skill jobs, as this is often overlooked.
The costs of living in a community – housing burden, transportation access, environmental and health impacts – need to be considered and weaknesses need to be addressed.
Cluster development, an economic development organizing practice, is more important now. The practice should move beyond just training for needed skilled workers towards also supporting the transformation of workplaces to create more value-based and impactful jobs.
The Reality of the Economy
I first saw the cracks in the employment cycle in 2018 as our client communities started learning that the loss of the middle class and the expansion of low-wage, low-skill jobs were having a devastating impact on the quality of place and ability of residents to invest in their future. Cities like Indianapolis, San Diego, and Seattle were working to end incentives supporting the creation of these jobs. Workers were organizing Fight for $15 efforts, seeking to increase the federal minimum wage. Worker shortages started appearing on shop floors and front lines.
Then the pandemic hit and 25 million workers were pushed to the labor force sideline. Within weeks, a staggering number of people were wondering how long this would last.
The Federal Reserve Bank of St. Louis followed a cohort of these workers to see what happened after a little more than a year. Their survey and analysis estimate is that 15.6 million went back to work, 1.7 million were unemployed, and 7.7 million were still out of the labor force as of June 2021. Some retired happily, but many seem to have given up. The Fed projected their modeling out to June 2022 and found that an estimated 3.5 million workers will not return.
This cohort may be just the flock of canaries in the labor force. The transformation in the workforce continues.
A recent survey released by the Society for Human Resource Management (SHRM) found that “40% of U.S. workers are actively searching for a new job or plan to soon”. The survey lists the following reasons:
Better compensation (cited by 53 percent of respondents).
Better work/life balance (42 percent).
Better benefits (36 percent).
Career advancement opportunities (33 percent).
Desire to make a career change (33 percent). This is "COVID clarity," Alonso noted, explaining that some people became more aware of what they really want out of a job and in their lives as a result of the pandemic.”
Of these workers searching for a new job, the majority (68%) decided to make a change during the pandemic. Also, 64% said their expectations for what they want in a job have changed since the pandemic.
These two sets of stats from the St. Louis Fed and SHRM underscore that the experience to date may be just the first wave of a transformation of our collective view of the world of work and the necessary resilience of employers. The second wave may be underway; in August 2021, 7.7% of employees in accommodation and food services left their jobs according to the Bureau of Labor Statistics. This mass separation from employment by workers will further define what is needed for stable staffing as the economic recovery progresses.
In future posts, the Fourth Economy team will profile how communities are responding and the promising practices that they are executing.
If your want to hear what others are saying and dig into the data please see these articles: