Andy Challenger is senior vice president at Challenger, Gray & Christmas, Inc., a Chicago-based global outplacement & career transitioning firm.
Nearly 17.9 million U.S. workers voluntarily left jobs between January and May, according to the monthly labor department quits report.
What some dub the “Great Resignation” is occurring as businesses — particularly those with lower pay — struggle to fill positions in an economy gaining steam now that the COVID-19 vaccine is widely available.
“Ultimately employment is a balance of supply and demand. The power in this equation for a number of years has been on the side of the employer,” said Jason Eckert, executive director of career services at the University of Dayton.
In May 3.6 million people voluntarily left their jobs in the U.S.
Credit: Alexis Larsen
Credit: Alexis Larsen
In the past, even when the economy was doing well, people seeking work typically outnumbered available job opportunities, he said.
“We are seeing a shifting in the balance of power where workers are gaining more power in this conversation,” Eckert said. “As such we are seeing salaries increase, especially in terms of industries that paid close to the minimum wage.”
After years of stagnating, average weekly earnings jumped 3.9% year-over-year in June, according to the U.S. Department of Labor. That’s a full percentage point higher than the year-over-year rate in June 2019 before the pandemic hit.
“They’re trying to figure out if they can make more money and because everyone is hiring, it’s causing them to look at what opportunities are available,” McLean said. “People are transitioning to higher paying jobs and they’re seeing what their skills are worth right now.”
Taco Street Co, Kitchen Manager, Duane Walker, left, and owner, Anthony Thomas prepare Birria Tacos. MARSHALL GORBY\STAFF
Anthony Thomas, 46, of Beavercreek resigned from his job at an Urbana manufacturer last year so he could take his part-time taco food truck business to the next level. In February Thomas opened his Taco Street Co. in the Mall at Fairfield Commons and he plans a second location in Dayton this fall.
“I make better money as an entrepreneur than I do working the job. Plus I have the versatility to attend school functions and be more hands on with my kids,” Thomas said. “This is the best thing I could have done in my life.”
More quits than layoffs
In May the monthly quits rate ticked down slightly, with 3.6 million workers, or 2.5%, voluntarily quitting. Still, May’s quits are more than twice the combined total of the nearly 1.4 million workers who were laid off or otherwise involuntarily discharged and the 346,000 who left due to retirement, disability or death that month.
The industries with the highest quits rates in May were in accommodation and food services, where 5.7% of workers quit, and retail, which saw 4% of employees leave voluntarily.
People are changing jobs and careers in the wake of the pandemic for a variety of reasons, experts said. For some, their pre-pandemic jobs disappeared and either have not returned or now offer too few hours. Some people decided to boost their skills and qualifications in college or job training programs.
“The credentials that we are training for demand high wages. We are seeing people go to a livable wage from a non-livable wage,” said McLean, who oversees the county’s Workforce Innovation and Opportunity Act program that gives dislocated workers up to $15,000 to train for in-demand jobs.
Garth McLean, Montgomery County interim director of workforce development.
Many people remained employed throughout the pandemic, but want a better job with more money or improved working conditions.
“There are a lot of people who have been contemplating changing jobs for a while,” Eckert said.
“A pandemic is a pretty bad time to leave a stable position,” he said. “And now that we are perceiving that we are slowly emerging out of this, I’m not surprised that a lot of workers are either resigning or job seeking with the intention of resigning.”
‘Want to go back to do something’
Nationwide 22 million jobs were lost between February and April 2020 and there are still 6.8 million fewer jobs — including 278,300 fewer in Ohio — than before the pandemic hit, according to the labor department.
The unemployment rate is 5.9% in the U.S. and 5.2%in Ohio. The rate is 6.3% in the Dayton metropolitan area, which includes Miami, Montgomery and Greene counties.
The Dayton Metropolitan Statistical Area had a higher unemployment rate in June 2021 than the state of Ohio and the U.S.
Credit: Alexis Larsen
Credit: Alexis Larsen
But progress on the jobs front is real, with employers adding 850,000 workers in June. That’s the most since August 2020 when nearly 1.6 million jobs were added as the nation reopened more fully after the pandemic shutdown that spring, according to federal data on non-farm payroll employment. But things took a sharp turn downward last fall as COVID-19 cases surged again, recovering only with this year’s widespread availability of vaccines and a drop in case counts.
There are fears that the current economic recovery could begin to stall or the labor shortage worsen as the virus appears to be surging again among the nation’s large number of unvaccinated people. That is particularly of concern in industries where workers have close contact with customers, like restaurant and retail, the ones suffering the most acute labor shortages.
McLean said many of the dislocated workers the county serves with its federally funded job training and career counseling program say they are looking for a job “that is meaningful to them, that connects them to the mission of the organization that they work for. People want to have substance in what they are doing.”
“I had a 71-year-old come in to be trained to be a CDL driver because he wanted something to do,” McLean said “We are seeing folks re-enter the job market. As the fear goes down from this pandemic, people are going to want to go back to do something.”
The pandemic led to a lot of introspection that experts said is at play in the quits rate.
“It’s not just pure confidence in the labor market. It’s also that people have really reevaluated what they want over the last year and a half, and people are making those changes now,” Challenger said.
“There is a lot of burnout that happened during COVID. A lot of people are leaving, maybe not to go to another opportunity but to to take time off out of the workforce,” he said.
Educational services and arts, entertainment and recreation were the two fastest growing industry sectors in Ohio in June compared to May, 2021.
Credit: Alexis Larsen
Credit: Alexis Larsen
The issue of remote work is also at play as companies begin pulling workers back to the office.
“We see a lot of people leaving specifically because they want to maintain the flexibility and autonomy,” Challenger said. “They don’t want to go back to the office, so they are moving to companies that will offer them full-time remote working roles.”
Companies are hearing that, and job postings on websites such as LinkedIn have “tons of open remote jobs across all sorts of industries,” said Stephen Washington, director of community engagement and business partnerships at Central State University.
Stephen Washington, director of community engagement and business partnerships at Central State University. He also is an adjunct finance faculty member.
Sixty-one percent of respondents said a flexible/hybrid policy will remain in place at their firms after the pandemic ends, according to a July survey of members by the National Association for Business Economics, a professional association of business economists.
The survey also found that 51% of member firms increased wages in the second quarter, up from 31% in the first quarter.
Businesses likely will struggle to find and retain workers if they fail to offer attractive wages and benefits, don’t make employees feel valued and safe, and if they don’t offer flexibility to parents struggling with pandemic-related child care issues, the experts said.
“Employers should really up their game in terms of recognition and retention,” Eckert said. “What I mean by that is a lot of times people leave a job because they’re not satisfied or they don’t feel appreciated or valued, especially by their immediate supervisor.”
The pandemic has caused people to focus more on work-life balance, he said, and jobs that fully utilize their talents.
“People just now have the opportunity and have what I would think of as more of a ‘Great Awakening.’ And now the resignations are coming,” said author Jeanet Wade, founder of St. Louis-based consulting firm Business Alchemist. “(The pandemic) allowed us to step back and say: ‘What’s really most important? Am I valuable? What do I care most about?’”
What can businesses do?
Businesses can make the most of this opportunity by becoming known as workplaces where people can pursue their passions, feel challenged, connected and that they are contributing, Wade said.
Jeanet Wade is founder of Business Alchemist , a consulting firm and author of The Human Team: So, You Created a Team But People Showed Up!
“They should have been proactive all along on creating great workplaces, on valuing people and human beings at work,” Wade said. “It might be a little bit late, but it’s now an opportunity to change their business model.”
It is always less expensive to retain employees than to find new ones, so businesses would be well-served to take this opportunity to ask, “What are we doing to listen to and appreciate our current workers?” Eckert said.
Businesses also could do more to attract a diverse workforce to resolve their hiring problems, Washington said, such as partnering with historically Black universities like Central State. He uses as an example the university’s summer banking internship, in which sponsoring banks pick up interns’ housing and transportation costs and cover the credit hour cost for the class.
“We see a lot of mobility among those students. Being able to get other jobs, get better jobs,” Washington said. “So I think that’s a matter of just opening up of opportunity.”
Eckert said younger people expect to move around in their careers, not staying in the same place for decades as their parents may have done.
“Trust in organizations really changed during the Great Recession,” Eckert said. “People who thought they were going to have a great career at one place got laid off.”
Jason Eckert, director of career services at the University of Dayton.
And while he discourages frequent job-hopping, Eckert said studies show people who change jobs tend to make more money over the long run.
The experts believe the labor shortage will ultimately resolve itself once the pandemic wanes, vaccinations rise, federal pandemic aid programs end, and parents get their kids into school or child care centers.
That won’t stop employers from complaining they can’t find workers with the right skills, a perennial complaint that pre-dates the pandemic. But it may mean the power will once again shift away from workers and make today’s lucrative job offers and bonuses less common.
“It is a surprisingly good time to be searching right now and trying to win a new offer. And so I’d recommend to people that if they want to make a move, do it sooner rather than later,” Challenger said. “Don’t expect this to last forever. There is kind of a ‘time is of the essence’ component to the job search right now.”
|How to resign from a job|
|Have another job lined up first.|
|Give two weeks notice in a thoughtful letter to your boss.|
|Ask to meet with your boss.|
|Seek permission to cite work you've created.|
|Ask your boss or other co-workers to be references for you.|
|End the relationship in a civil manner.|
|Be prepared when you give notice for your employer to have you leave immediately. |
|Source: Jason Eckert, executive director of career services at the University of Dayton|
Montgomery County Job Training and Recruiting Program
Phone: (937) 225-5627
Address: The Job Center, 1111 S. Edwin C. Moses Blvd. Dayton, Ohio
Services: Job training grants up to $15,000 for in-demand careers
Recruiting services for local companies and job seekers
About the Path Forward
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