There was a lot of chatter in the media towards the end of last year and into the New Year about the Great Resignation, and while the chatter has died down, the trend has only ramped up.
Back in November and December experts were ringing the alarm bells over record levels of quits, after roughly four and a half million Americans walked off the job each month, according to the Bureau of Labor Statistics. While resignation rates tempered slightly in January and February, down to 4.25 and 4.38 million respectively, they surpassed November’s record high in March of 2022, the latest month that BLS data is available. In fact, that month there were nearly two jobs available for every unemployed worker.
News stories about the Great Resignation might be few and far between as compared to the fall and winter, but the topic is still very much front of mind for business leaders. According to a recent survey of 1,500 hiring managers and c-suite executives, 75% expect hiring to become even more challenging during the remainder of 2022.
According to the survey — which was published in early May by applicant tracking and recruiting software provider Greenhouse — more than two-thirds say engaging talent is more difficult now than it was before the pandemic, and three quarters say candidates are demanding more employee benefits. According to another recent study conducted by Microsoft, 41% of workers and 52% of Gen Z and Millennial workers plan to leave their jobs this year, representing a 3% increase over last year.
The struggle to attract and retain talent poses a real threat for businesses of all shapes and sizes. According to the iCIMS 2022 Workforce Report, 90% of business leaders say they will fail to meet their goals without the right talent in place, and the effects of the Great Resignation have already negatively impacted more than 80%.
The reasons behind the shortfall come down to simple supply and demand. The iCIMS data suggests an 86% increase in job openings, against an 11% fall in applications, between the start of 2020 and the end of 2021.
While the trend has affected all businesses, it’s hitting small businesses particularly hard. According to a study conducted by Goldman Sachs in early May, 90% are finding it difficult to recruit candidates for open positions, and 88% agree that staffing has been more of a challenge for smaller employers, who typically have fewer resources to compete for talent.
The Great Resignation was largely considered a passing trend during a brief, albeit bumpy recovery period, but like inflation and supply chain clogs, the economic challenges of late 2021 have proven to have more staying power.
The factors behind the ongoing talent crunch are many, but none should come as a surprise, as they are largely consistent with the challenges that spurned the Great Resignation in the first place. The economic insecurity of the early pandemic period caused many to hang onto jobs they may have otherwise left, and now we are now seeing what is effectively two years’ worth of job transitions taking place over the course of a few months. The pandemic also caused many to re-evaluate their career choices, and find opportunities that align with their newfound aspirations. The last two years also saw a large proportion of those who were nearing retirement age exit the workforce.
There are, however, a number of additional factors that have pushed what was thought to be a temporary issue into a long-term trend. One of them is a misalignment between employee expectations and employer intentions around issues like flexibility and remote work. After two years of remote work many employees have been forced back into the office recently, and in such a hot labor market many feel empowered to leave their jobs in search of one that suits their new lifestyle.
Whether the labor market trend is sustainable will depend on a variety of factors, but two things are for sure: First, the Great Resignation isn’t over yet, even if it’s not making headlines anymore.
Second, those employers that are making an effort to listen to the needs of their staff and accommodate the flexibility and remote work lifestyles they demand are going to fare much better in the months ahead.