US businesses are hiring, but Labor Department data indicates some unemployed workers are staying away from the workplace, constraining employment growth – Copyright AFP Mike FIALA, Robyn BECK, Richard A. Brooks, Mike CLARKE, Dale DE LA REY, Anthony WALLACE, Philip FONG, Isaac LAWRENCE, Peter PARKS
Companies that successfully made it through the worst of the coronavirus pandemic are now facing a new problem. Surprisingly, more than a quarter of their employees may leave.
When the economy opened up recently, it was expected that workers would rush to reclaim their jobs, and many businesses raised their starting pay scales to entice new workers into the fold.
However, economists rely heavily on the U.S. Labor Department’s weekly jobs report, and while it has generally been promising, it has not been that great. Just two days ago, jobless claims totaled 412,000, an increase of 37,000 from the previous week and higher than the 360,000 estimates.
And while businesses large and small are begging for workers, something interesting is taking place across the nation. A smaller percentage of workers are opting to rejoin the workforce, or employees already working are giving their “two-week notice.”
“The great resignation is coming”
According to Bloomberg Businessweek, the impact the pandemic has had on the American workforce is only now beginning to be fully understood. While Wall Street and the Labor Department are claiming, perhaps, rightly so, that a full recovery of the workforce will require some time, it may be something else entirely.
Bloomberg is referring to a new phrase coined Anthony Klotz of Texas A&M in an interview last month.
“The great resignation is coming,” Klotz said in the interview. He suggested that many workers who were fortunate enough to have kept their jobs amid the pandemic didn’t dare give them up in such a time of uncertainty. Now, “there are pent-up resignations that didn’t happen over the past year.”
American workers – perhaps, for the first time in nearly a century – have been given a chance, thanks to a virus, to slowdown, sit back and reassess their lives, their work-life balance or career paths.
“People have had a little more space to ask themselves, ‘Is this really what I want to be doing?’” University of Michigan economist Betsey Stevenson tells Axios. Others are taking a huge plunge and considering switching careers entirely.
And this phenomenon is really happening. Citing Labor Department stats, the Wall Street Journal reports that 2.7 percent of US workers left their jobs in April, the highest level in more than 20 years. The figure is up from 1.6 percent a year earlier, amid the pandemic.
Additionally, there have been several surveys that also back this theme of resigning and looking for something different. In a survey conducted in March this year, nearly 25 percent of U.S. workers told Prudential Financial they intend to find a new job with a different employer. Another survey cited by the World Economic Forum puts the figure at 41 percent globally.
It’s really unclear if the “great resignation” is coming; or how massive the number of resignations will be in the upcoming months. But one thing is certain, what used to be normal, before the pandemic hit, is not fully coming back.
“A lot of people who want to go back are finding that the office that they come back to is not the office they left behind,” Klotz says.