The Great Resignation is a term used to describe an increase in the quit rate among U.S. employees that began in 2021. Millions of people began leaving their jobs citing various reasons, including low pay, poor working conditions, and negative lifestyle impacts associated with the COVID-19 pandemic.
While the Great Resignation created challenges for many employers, it also presented an opportunity for companies to fine-tune their hiring and retention policies.
Here, take a closer look, including:
• What is the Great Resignation?
• What are the reasons for the Great Resignation?
• How can companies prevent employees from resigning?
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What Is the Great Resignation?
The Great Resignation refers to the fact that millions of people opted to quit their jobs during the height of the COVID-19 pandemic. Anthony Klotz, associate professor of management at Texas A&M University, is credited with coining the term.
Data suggests that the Great Resignation began in early 2021, reaching a peak of 4.5 million quits in November of that year, according to the Bureau of Labor Statistics (BLS). Altogether, the BLS estimates that nearly 48 million people quit their jobs in 2021.
The wave of quitting hasn’t entirely subsided, however. The Great Resignation trend persisted well into 2022, as more employees elected to leave their employers. For example, the quit rate was 4.1 million for September 2022, according to a recent Job Openings and Labor Turnover report.
Who’s Quitting Their Jobs?
The Great Resignation affected numerous industries but not always equally. According to an analysis by Zippia, for example, the industries affected most by the Great Resignation in 2021 include accommodation and food service, leisure and hospitality, and retail. Here are some other statistics on the Great Resignation and who’s quitting their jobs:
• Employees aged 18 to 29 quit more than any other demographic, with a 37% quit rate in 2021.
• Women were 11% more likely to quit their jobs than men, while Hispanics and Asians quit more often than Black or White Americans.
• Those with less education, e.g., a high school diploma, were more likely to quit than employees with some college or a college degree.
• Employees with lower incomes had a quit rate that was double that of those earning higher pay.
The range of people quitting is diverse, as are their reasons for doing so, as you’re about to learn.
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Reasons for the Great Resignation
Now that you know what the Great Resignation is, you are likely wondering why so many people walked away from their work. There’s no single cause for the Great Resignation. Instead, employees began leaving their jobs in response to a combination of factors. Here are some of the top reasons employees chose to quit, according to Pew Research.
• Low pay. Thirty-seven percent of employees said low wages were a major reason behind their decision to quit.
• No room for advancement. Thirty-three percent of people who quit their jobs in 2021 said they did so due to a lack of opportunities to get ahead.
• Felt disrespected. Interestingly, 35% of those who quit during the first wave of the Great Resignation said they felt disrespected by their employer.
• Child care. The COVID-19 pandemic made child care a struggle for many parents as schools closed for months on end. According to Pew, 24% of quitters cited child care as a major reason for doing so.
• Lack of flexibility. Being able to work flexible job hours or put in for time off as needed is important for many employees. Pew found that 24% of those who quit in 2021 cited lack of flexibility as a major motivator.
Other reasons for quitting included lack of benefits, working too many hours, wanting to relocate, or working too few hours. A small number of employees said they chose to quit over employer requirements to get a COVID-19 vaccine.
Here’s how the top 10 reasons for resigning look in chart form:
|Reason for quitting||% who said it was a major reason|
|Lack of advancement opportunities||33%|
|Lack of child care||24%|
|Lack of flexible schedule||24%|
|Lack of benefits||23%|
|Wanted to relocate||22%|
|Too many hours of work||20%|
|Roof few hours of work||16%|
|COVID-19 vaccine requirement||8%|
Ways Companies Can Prevent Employees From Leaving
Building a resilient workforce is important, but employee retention can be tricky, especially if workers don’t feel motivated to stick around. The Great Resignation has turned up the pressure on companies to provide employees with a more favorable working environment. Some of the ways companies may be able to prevent workers from leaving include:
• Offering flexible work schedules, including the chance to work remotely
• Focusing on building connections with employees and creating a welcoming company culture
• Getting input from employees on what’s working and what could be improved
• Showing appreciation for employees and respecting them at all times
• Offering opportunities for growth and advancement
• Enhancing benefits packages to include things like wellness perks or student loan repayment. The Great Resignation may have a significant effect on employee benefits in this way.
Offering higher salaries may be a starting point, but it could take more than just a bigger paycheck to convince employees to stay put. Thinking creatively and putting oneself in the mindset of the employee can be helpful ways for employers to figure out what’s needed most.
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The Great Resignation involved almost 48 million workers leaving their jobs in the wake of the COVID-19 crisis. This has taken a toll on many employers as they scramble to hire new workers to replace those who have quit. If you’re thinking of quitting, it’s important to get your financial ducks in a row first so you can maintain your standard of living during a job transition.
3 Money Tips
- If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.
- If you’re creating a budget, try the 50/30/20 budget rule. Allocate 50% of your after-tax income to the “needs” of life, like living expenses and debt. Spend 30% on wants, and then save the remaining 20% towards saving for your long-term goals.
- If you’re faced with debt and wondering which kind to pay off first, it can be smart to prioritize high-interest debt first. For many people, this means their credit card debt; rates have recently been climbing into the double-digit range, so try to eliminate that ASAP.
What’s the Great Resignation?
The Great Resignation refers to the millions of Americans who have quit their jobs since early 2021. Almost 48 million people left their employment in 2021. Some of the most common causes for the Great Resignation include low wages, employee burnout, inflexible work schedules, and poor work-life balance.
Should you quit for a better paying job?
Not being able to make your budget work is one of the clearest signs that you’re not making enough money. If you believe a better paying job could help you reach your financial goals or, at the very least, make budgeting less stressful, then it could be worth moving on to a new employer. However, consider what you might be giving up in the way of benefits or other job perks to snag a higher salary.
Is it better to quit or be fired?
Quitting a job may look better on a resume than being fired. Additionally, if you’re putting in proper notice in advance, it may be easier to plan your budget as you countdown to your final paychecks. Your employer may also appreciate your giving notice that you plan to make a job transition so they have time to hire someone to replace you.
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