Over the past 2 years, things have changed drastically in the job market globally. From most companies shifting to a remote work model to many other slashing jobs, there have been ups and downs for both employers and employees. One of the biggest phenomena we witnessed during this entire episode is, however, the Great Resignation. If you are unfamiliar with the term yet, millions of workers have been quitting their jobs amid the pandemic throughout the world. The U.S. is one of the most affected countries in this regard.
According to the U.S. Bureau of Labor Statistics, in August 2021, the rate of employees resigning rose to 2.9%, an all-time high since December 2000. Particularly in the leisure and hospitality industry, the quits rate was as high as 6.4%, which is an increase of more than 164,000 resignations. This was followed by the trade, transportation, and utilities industry.
As of August 2021, 4,270,000 no-farm employees have quit their jobs willingly. This phenomenon is being called the Great Resignation. The reasons for quitting are different for everyone. Some have realized when working from how little time they spent with family so far, causing them to take a break. Others have had the time to introspect and decide whether they really want to stay in the profession or switch to something else.
But what does it all mean for the U.S. job market right now and in the foreseeable future?
Is the Great Resignation Really Bad?
At first thought, it may seem like the Great Resignation is a big setback for both employers and workers. Employers are, of course, losing one of their biggest assets, their human resources. But for workers, there is actually more good news than bad. So many employees quitting their jobs together has left a gaping hole in the job market, which needs to be filled at the earliest. Companies are struggling to find people to hire.
A report by Manpower Group reveals that hiring in the U.S. is likely to increase by 48%. The roles that are most in-demand include IT, telecom, technology, and media communications. Also, banking and finance, as well as hospitality industries, show a significant uptick in hiring. But that’s not all.
Employers are also doing the best they can to retain existing employees. With the impact of the Great Resignations, employers in the U.S. and elsewhere have realized what employees really seek in a job. In the tight labour market right now, flexibility is the key to attracting and retaining employees. Organizations are now willing to make their work environments a lot more relaxed by introducing hybrid models. 51% of companies in finance are planning to support a hybrid workforce, where employees have the option to work partly on-site and partly remotely. As of early 2021, only 22% of organizations were willing to make this shift.
Organizations are also offering increased pay to attract employees in hard-to-fill positions. According to Bloomberg, the average hourly pay for workers in the U.S. rose by 4.8% compared to last year.
What Does it Imply?
Well, looking at the statistics, it is clear that there is no dearth of jobs in the U.S. right now. Employers desperately need people to fill in vacant positions. But it is also important to remember that talent is still a key criterion in hiring. Just because there are jobs does not mean that companies would be willing to compromise on talent and qualifications. For job-seekers, upskilling and developing new capabilities can prove to be very fruitful at this time.