The Great Resignation led to 4.3 million Americans quitting in August. This trend is here to stay.
Paul Davidson, USA TODAY
7 min read
The musical chairs game that’s roiling the U.S. jobs market isn’t a blip, but rather marks a longer-lasting shift in leverage from employers to workers, experts say.
About 4.3 million Americans quit their jobs in August, the Labor Department said this week, the most on records dating back more than two decades. Many bolted to take advantage of 10.4 million job openings, often at higher pay -- a historically high figure.
A large number of employees are resigning and moving to jobs that allow them to work remotely or at more flexible hours. Others are burned out after toiling away during the COVID-19 pandemic, switching careers after the health crisis led them to rethink their priorities, or opting to stay on the sidelines until the infection surges fueled by the delta variant ease..
What’s clear, though, is that most resignations aren’t chiefly motivated by a signing bonus or playing catch-up after putting off job searches during the depths of COVID, says Julia Pollak, chief economist of ZipRecruiter, the online jobs marketplace. Those may have been the lures earlier in the pandemic but no longer, she says.
“This is not just a temporary shock to the labor market but a permanent shock that has caused a lot of changes," Pollak says.
Now that the pandemic is dragging on — rather than fading quickly as many expected — it “has created winners and losers” among companies and industries, Pollak says.
For example, restaurants thriving on delivery and takeout services or auto dealers selling lots of trucks to couriers are doing well, paying higher wages and enticing workers at competing firms to make a switch.
Similarly, companies that are letting people work remotely, taking steps to ensure their workplaces are safe and allowing more flexible schedules are also drawing more job candidates.
“It’s no longer enough that employers are adjusting wages,” says Becky Frankiewicz, president of Manpower group North America, a staffing firm. “They’ve got to address health and well-being, safety and flexibility too ...What people want from work and life has changed.”
In the past, competing restaurants, shops or accounting firms in a neighborhood or city looked roughly similar in terms of pay and work conditions, Pollak says. That’s no longer the case and it’s prodding many more workers to jump ship, she says.
They can hunt for new opportunities because historic labor shortages have shifted the balance of power in their favor. Some 3 million people have stopped working or looking for jobs during the COVID-19 crisis because of health concerns, the need to care for children, or in some cases, enhanced federal unemployment benefits that phased out last month.
Struggling to find workers
Yet consumer demand remains strong as the economy continues to reopen and many Americans remain flush with more than $2.5 trillion in extra cash from government stimulus checks or from hunkering down earlier in the crisis.
The result: Businesses need workers but are struggling to find them.
One sign the job-switching will continue: Nearly three-quarters of workers say they're thinking about quitting, according to a survey by Joblist, which provides online tools to job seekers.
The pendulum will eventually swing back to employers, at least to some extent, says economist Sophia Koropeckyj of Moody's Analytics. Parents will go back to work as schools fully reopen by next year, easing worker shortages and reducing employees' bargaining power. The economy will slow and the number of openings will decline, she says.
At the same time, she says, millions of baby boomers will retire in coming years and unemployment should fall below 4% by 2023.
"The tight labor market could enable workers to maintain a stronger bargaining position vis-a-vis employers for longer than the pandemic recovery," Koropeckyj says.
Here's why workers are quitting:
1. Lots of openings, higher pay
About 63% of workers planned to switch jobs through year-end because of the abundance of openings, many at higher pay, according to a July survey by Joblist for USA TODAY. Seventeen percent of workers said they quit because of low pay or a lack of benefits at a previous job, according to another Joblist survey.
U.S. wages and salaries grew 3.5% in the second quarter, the most in nearly 20 years, according to Labor’s Employment Cost Index.
2. Working remotely
Fifty-four percent of workers surveyed by ZipRecruiter in September said they preferred a job that let them work from home. Only about 10% of jobs offer that option, though that’s up from 3% before the pandemic, Pollak says.
Many employees, in turn, are leaving jobs that require them to work in offices, says Jim McCoy, senior vice president of talent solutions at ManpowerGroup.
That could eventually prod more companies to allow remote work, Pollak says.
3. Upset with COVID work experience
Nineteen percent of workers said they’re unhappy with how employers treated them during the pandemic. This could include those who burned out after being forced to work long hours while colleagues were out or are in stressful industries such as health care.
4. Switching careers
Twenty percent of workers surveyed by Joblist quit jobs to pursue new career paths, and their passions.
After graduating from college in May 2020, Shane Eyermann of St. Louis couldn’t find a job in his preferred field of medical sales – or any kind of sales – so he took a position handling insurance claims for a freight company. “It was repetitive,” he says.
This year, he started seeing more postings for sales jobs and landed one as a sales representative for a company that makes synthetic colors for the food and paint industries. The salary is $15,000 higher than his previous job, allowing him to move out of his parents’ house.
Many restaurant and retail workers, in particular, grew weary of the low pay and health risks that came with their jobs. In August, 892,000 workers in restaurants, bars and hotels quit as did 721,000 retail workers.
About 25% of hospitality workers surveyed by Joblist said they wouldn’t want to work in the industry again.
And 20% of all workers say the pandemic caused them to change the kind of role they were seeking to one that permitted remote work, a ZipRecruiter survey shows.
Thirteen percent of workers quit because their jobs didn’t provide work-life balance, the Joblist poll reveals.
Since late last year, Mark Meadors, who’s in his early 30s, was putting in more than 70 hours a week at four jobs – a full-time position in human resources for a construction company and part-time gigs at a grocery store, boat dealership and in the Air Force Reserve.
Meadors, who lives in Knoxville, Tennessee, took the part-time jobs because he felt his HR position wasn't stable as the pandemic buffeted the construction industry.
The grind left him exhausted and with little time to spend with his wife and five kids. As job openings soared, Meadors quit the HR, grocery store and boat dealer positions to take a more secure human resources job at a university. He continues his duties in the Air Force Reserve.
“It was a relief,” says Meadors, who left the Air Force in 2019. “I’ve got to attend to the needs of my family, and I’ve got to be there for them.”
6. Health concerns
Forty-four percent of workers are quitting at least in part because of a focus on health issues, according to a survey by Digital.com, a consulting firm for small businesses. The delta variant may have prompted people in regions with no mask mandates or social distancing requirements to quit, Koropeckyj of Moody's Analytics says.
7. Starting their own business
One-third of workers quit jobs to launch businesses, the Digital.com survey shows.
