It doesn’t seem to matter where you are or what industry you are in; you are hearing about how challenging it is to hire new employees and keep existing ones right now. According to CNBC, 4.5 million people quit jobs in November 2021 alone, which set a new record over the last twenty years, the time that the U.S. government has been tracking this information. It’s caused such a stir that it’s referred to as The Great Resignation, The Big Quit, The Great Reimagination, The Great Reset, The Great Reshuffle, and The Great Realization. Both business owners and employees wonder what this looks like for 2022 and beyond. This article will dive into what happened in 2021 and what it means for 2022. It will discuss why people quit jobs, suggestions to attract and keep employees, what may be preventing people from wanting new jobs, and the future for filling job openings. Check out the video or keep reading.
Is there really an employee shortage?
According to tradingeconomics.com, December 2021 hit a record of 11.45 million job openings, and as of January 2022, it was down slightly at 11.26 million job openings. For perspective, in January 2021, there were 7.23 million job openings one year prior. That puts the average monthly job openings in 2021 at 9.28 million and a range of 4.22 million more open jobs at the end of the year than at the start.
Job openings are at a record level, but what about unemployment?
Unemployment is defined as people actively looking for a job and being unable to find one. As of February 2022, bls.gov states the unemployment rate was 3.8%, or 6.3 million, whereas, in February 2021, one year prior, it was just over 6%. Going back one year further to February 2020, before Covid hit, unemployment was 3.5%, or 5.7 million. You can see overall that the unemployment rate is normalizing.
The types of job openings
Bls.gov provides a detailed list of industries and the increases and decreases in job openings. Below is a quick summary to get an idea of what is going on in various industries.
This is a chart of industry, the number of jobs added in February 2022, and whether employment in that industry has been up or down since the pandemic started.
What about salary and wages?
According to CNBC.com, Willis Towers Watson (WTW) performed a survey to determine the raises companies expect to pay this year. Companies in the U.S. are expecting to give raises of 3.4% to employees in 2022. In 2021, the average raise was 2.8%. You may think it’s inflation as that is covered so heavily in the news, but that’s not the sole reason reported. In fact, just 31% reported that as a factor. The other significant factor is the ability to attract and keep talent. Specifically, 74% of companies noted that the labor market is the reason they have increased raise budgets, also part of the WTW survey.
A separate study reported by The Conference Board, cited in December 2021, expects the wage increase in 2022 to be at 3.9% or .5% more than WTW. Similarly to the WTW survey, they attribute that primarily to new hire wages and inflation. In addition to budgeting for raises, they also state that jobs offering a signing bonus doubled in October 2021 from where it was in March 2020.
A third study published in January 2022 from JWilliamsStaffing.com, notes that the pay increases have been even higher at 4.7% as a staffing agency.
The top 10 reported reasons employees quit their jobs
These were reasons reported as to why people quit their jobs in 2021 from a survey from Pew Research. They are in order from the highest count of reports at number one to the lowest at number 10. In addition to these, another eye-opener is that Microsoft surveyed 30,000 people in 31 countries. The results were that over two-fifths of those people are considering leaving their current employer in the next year, with 70% citing the top reason they require flexible hybrid work. If you’re struggling to hire people right now, look at each to determine how you could adjust your offerings and policies.
1. The pay was too low
Consider reviewing the market standards for salary to ensure you are in line with expectations. If you have an OnTheClock.com account, log in, go to HR360 and use the salary benchmarking tool for free.
2. No opportunity for promotion
Find ways to allow employee growth and plans to get there. Could you offer continuing education reimbursement or mentorship programs to encourage growth?
3. Felt employer was disrespectful
Review policies, especially around Covid-19 and work-life balance, and determine if there are ways employees could feel this in your company. Make adjustments as needed.
4. Lack of child care
Child care is a challenge, but if you were offering flexibility in work schedules, it might help to alleviate challenges in this area.
5. Needed more flexibility
Similar to above, think of ways to offer flexibility, whether it is in scheduled time to work or location of work.
6. Unhappy with benefits
According to several sources, being this is an employee market right now, are you offering competitive benefits? Have you taken the time to review what’s being offered by the interviewees that turn down jobs or the existing employees that leave the company? This feedback could be collected in the exit interviews.
7. Relocating to a new area
Think about whether it’s worth losing an employee over relocation and whether there is a way to keep them working remotely. The cost to replace employees is high.
8. The job required too many hours
Look at staffing and who is doing what to determine whether there is an appropriate headcount. That is easier said than done right now, with the challenge to hire, but it’s also more important than ever to treat the existing employees fairly.
9. Job didn’t offer enough hours
Consider getting regular feedback from employees working part-time regarding the requested number of hours and whether there is an opportunity to take on additional work.
10. The employer required a COVID-19 vaccine
This came in at the bottom of the top items, but similar to the relocation above, is there any way to keep valued employees working remotely as an alternative, so the business keeps going? Remote work won’t work in all scenarios, but it’s something to consider. Additionally, consider the actual risk of the employees holding out. Are they encountering several people each day, or do they work in their own space? Also, remember that medical and religious reasons are legal exemptions.
What types of jobs have the highest turnover?
According to JWilliamsstaffing.com, the highest quit rate and turnover have been in food services, health care, social assistance, transportation, warehousing, and utilities.
What states have the most quitting?
According to winknews.com, as of November 2021, Georgia and New Hampshire were tied with 4.5% quit rates, Vermont at 4.4%, North Dakota at 4.3%, and Kentucky at 4.2%. As of January, Alaska and Nevada have topped the list both at 3.8%.
What are the people who quit doing now?
Most of the people who quit their job for reasons other than retirement are now employed full-time (65%) or part-time (23%) despite the significant number of job openings. According to Pew Research, 33% say it was very easy to get a new job. About half of people who switched jobs report significant improvement in the ten issues above. That does leave about half who are not experiencing an improvement.
What is preventing people from getting a new job?
According to Forbes, the consensus is that unemployment, stimulus checks, fear of the virus, and a lack of childcare are the top reasons. But there is more to this because unemployment has ended. According to CNN, these are the main things preventing people from getting a new job at the end of 2021.
1. The Startup Boom
According to Forbes, in July 2020 alone, there were 600,000 new business applications filed which was up 100% from 2019. In 2021, there were a record 5.4 million applications for new businesses in the U.S., according to Economic Innovation Group. NPR.org cites a comparison from 2020 of 4.4 million applications for new businesses versus 2019 of 3.5 million applications. The record was broken in 2020 and broken again in 2021.
2. The Wealth Effect
The stock market is doing so well, cryptocurrency has boomed, and home prices have risen 25%. This is thought to have bought more time for people to think about what they are going to do. Cryptoslate.com claims that 11% of people have quit their job or know someone who has due to crypto investment. Over half of the people who did this had jobs that paid $50k a year or less, whereas 8% make $150k or more.
Day trading has become popular with a lot of people stating they have the only living once attitude. A highly used app, Robinhood, had 22.5 million accounts opened that are almost all regularly used.
3. Fear of the COVID-19 variants
LinkedIn surveyed people in late 2021 and according to that, 33% of people who considered getting a new job were apprehensive because of the Delta variant. As of March 2022, there are still several publications noting Delta as something to be concerned about. Monmouth University surveyed Americans in January, and exactly half are either very or somewhat concerned about catching a new Covid variant.
4. Exploring a new career
This is where the term “The Great Reshuffle” stems from, as people think about what they want from a career and why they are working. The Great Reshuffle is more of an accurate description of what is going on right now, and it’s considered by many to be the evolution of The Great Resignation.
5. Burnout
The primary reason for burnout is reported as health care and childcare stress, along with home and work-life balances not being as clear. Also interesting is according to Economic Research, 3 million people have decided to retire early, as of October 2021, rather than find an alternative.
What is 2022 and beyond looking like for filling open jobs?
This is a lot of numerical data and stats, so what does it mean for 2022 and beyond?
CNBC interviewed Rucha Vankudre in January 2022, a senior economist regarding the topic of employees quitting and turnover. According to Vankudre, employers are going above and beyond to attract employees, and there is nothing seen right now that anything will change in 2022.
As for perspective on the actual labor shortage, Vankudre acknowledged that there aren’t enough workers for the jobs that need them.
In that same CNBC article, other senior economists were asked about the future of labor shortages. Ron Hetrick noted the retirement of the Baby Boomers as a major factor, along with millennials reducing work participation, slowing birth rates, and few immigrants suggesting that this is not something that will be corrected within the year. Therefore, the overall message in researching this topic is that employers need to prepare for and adapt to this.
As of January 2022, Forbes is mirroring this mindset as well and noting that things may be “normalizing but not back to normal.” The message is that this situation is here beyond the pandemic and that hiring practices will need adjustment to adapt.
What can you do if you’re struggling to fill job openings?
In summary, it’s an employee market right now. If you’re struggling to hire, consider looking at the list of top 10 reasons employees quit to think about what you could offer that improves those sticking points. Another recommendation comes from Andrew Hunter, a co-founder of the job search engine Adzuna to open the borders of hire, evaluate criteria for new hires and realize that location of the employee is no longer a barrier with so many jobs adapting to remote.
If you’re hesitant about going remote, offering employees flexibility, and tracking employee time, OnTheClock.com is the solution. You may track employee time worked anywhere. Start your free trial today.
