Third Thursday Thoughts, 10th Edition
From Chief Executive Officer, Brian Lucas
Is it the Great Resignation or the Great Rearrangement?
If you are in the recruiting business, the current candidate inventory sometimes feels like a dried up well, and this Great Resignation is the hidden straw drinking the rest of your cocktail.
Or is it? The term “Great Resignation,” which is now the new term for the record number of people leaving their jobs since the beginning of the pandemic, reached a new milestone this past November: 4.5 million quit their jobs.
But while the mass departure of employees from their jobs is historic, the term might be a bit lacking in capturing the full scope of what’s happening. There seems to be a general idea that people don’t want to work in the wake of the pandemic.
It appears that this data depicts more of a “Great Rearrangement,” in which workers are quitting their jobs in record fashion, but instead of embracing inactivity, they’re probably leaving older, lesser jobs for new, better jobs.
Resignation does not mean that people are resigning and exiting the workforce; it just means they’re quitting their current company. The term “Great Resignation,” still is the most applicable descriptor, mainly because we don’t know what people do once they hand in their key fobs. We can research how many resignations are happening voluntarily, but we don’t know necessarily why they’re happening, or where they’re going. The only thing we really know is that, month over month, lots of workers are leaving.
On the flip side, new hires need to be considered in order to get a hold the bigger picture. When looking at the wide curve of the job market, the number of hires has, for the most part, stayed the same. The US added 199,000 jobs in December 2021, falling short of predictions made by economists.
People are leaving jobs, and then they’re starting jobs. Hires have a tendency to be higher in areas where resignations are higher, which suggests that a rearrangement is happening. That’s why a rearrangement; people moving from one job to another; seems a much better explanation of what is going on.
There’s also retirement, as a growing number of workers aged 55 and older are leaving the workforce.
There’s a balance amongst quits and hires, but certain sectors are dealing with the consequences of high turnover more than others. Industries on the front lines of the pandemic, such as retail, leisure and hospitality, health care, and manufacturing were hit hardest by exits in November. The accommodation and food-service sector notched its highest number of quits in 2020.
Play the game of retain. For companies trying to retain workers who may be tempted by greener pastures, it’s important to understand how to entice them to stay. Note the calls for higher wages, greater work-life balance, and higher degree of personal autonomy when it comes to working from home. You just can’t be complacent. You’re going to have to offer more. And if you’re not willing to offer more, people are going to leave.