The Great Resignation in Numbers
If you are an avid reader, you might have seen lots of posts and discussions on the topic of “The Great Resignation” in recent months. This is a serious matter, and it does not appear as if though it will cease anytime soon. If you have not read anything about it, we provide some perspective in this first of three blogs so that you can get up to speed. Many people thought this phenomenon was temporary and mainly due to the COVID-19 pandemic. But the trends show something different and deeper is happening to the U.S. workforce. There is nothing temporary in this tsunami of resignation and it is affecting all industries, functions, and hierarchical levels. Let us look at some of the key numbers to understand what is happening.
- In 2022, companies of all shapes and sizes are still facing the realities of record-breaking voluntary resignations. Depending on the sources and the counting methods, we can see numbers between 47 million and 69 million people who voluntarily resigned in 2021. Just in December 2021, 3 million workers quit their jobs, according to the monthly Job Openings and Labor Turnover Survey released by the Bureau of Labor Statistics. And we thought last summer’s labor numbers were bad. It is a monthly trend that seems to continue in the first quarter of 2022.
- There are many reasons for the mass exodus? MIT Sloan Management Review cited five main reasons (in order of significance): toxic culture, fears of job insecurity and reorganization, burnout, lack of employee recognition, and poor response to COVID-19 . Other research companies also report some of the reasons. Pew Research, which released its latest study on the phenomenon, reached two key conclusions:
- The top motivations: dissatisfaction with their pay (63%), a belief that opportunities for advancement were limited (also 63%), or else, a lack of feeling respected at work (57%).
- More than half of employees (53%) who left their jobs during 2021 took the opportunity to switch careers (not just jobs) in search of greater job satisfaction.
Gallup’s research reports that 42% of the reasons employees are resigning are linked to how they feel about their bosses and organizational cultures. Ouch! And low engagement is specifically felt when workers conclude they aren’t growing, appreciated, or treated with care and respect. Another 21% boils down to well-being, employees’ feelings about their work-life balance, work schedules, and their ability to work remotely some of the time .
COVID-19 and working remotely also triggered a new desire for many people to launch new business, to work in the gig economy and/or to become full-time self-employed . It is estimated that about 20% of job-quitters fall in this category. That represents about 9.5 million people last year, according to the U.S. Department of Labor, out of the 47 million above .
- Last year, 53% of employees who left their jobs said they made less money in their new roles, according to a January online survey of 1,000 adults by Real Estate Witch. The average pay cut was around $8,000 per year, according to the survey, but some workers indicated they would be willing to take an even bigger reduction. What's more, those who quit in 2021 but have yet to find another job said they would take an average $23,000 pay cut, the survey found .
These trends indicate that we are experiencing deep changes in the workforce and that companies must adapt not only to retain talent but to attract new ones. This is not a laughing matter. If they expect to continue growing at a healthy rate and scale, they must be able to be properly staffed and have employee continuity. With 11 million open jobs right now  and more coming, it becomes a corporate priority and not just an HR problem. Because this is not just a COVID-19 or pay raise problem, companies must address what employees are looking for as soon as possible. There are so many attractive jobs available in the U.S’. s most attractive companies. Others will have to raise their level of attractiveness. What to do and how to do this is going to be the subject of the next blog post. Stay tuned for more!
Dr. Stephan Liozu (www.stephanliozu.com) is the Founder of Value Innoruption Advisors (www.valueinnoruption.com), a consulting boutique specializing in industrial pricing, digital business, and value models, and value-based pricing. Stephan has 30 years of experience in the industrial and manufacturing sectors with companies like Owens Corning, Saint-Gobain, Freudenberg, and Thales. He holds a Ph.D. In Management from Case Western Reserve University, and has authored several books, including his latest book, The Industrial Subscription Economy (2022). Stephan is a strategic advisor to DecisionLink and Monetize360, as well as a senior advisor at BCG.