Published On: Mon, Jan 8th, 2024

How is the Troubled Economy Affecting the Great Resignation?

It has been more than a year since the Great Resignation kicked off in April 2021 and reports seem to indicate that it has not yet run its course. According to numbers released by the US Department of Labor in March 2022, 4.3 million people in the US quit their jobs in January 2022. That total matches the number of resignations in December 2021, and is down just slightly from the record 4.5 million recorded in November 2021.

A recent study conducted by Pew Research gives some insight on the factors that drove the Great Resignation. The findings of the study promise to be helpful to employers who are continuing to wrestle with what they can do to keep their employees.

photo/ Robin Higgins via Pixabay

Employees need higher pay to deal with hyperinflation 

The Pew Research findings reveal that economic factors have been central to the Great Resignation since it began. When asked why they left their jobs, 63 percent of respondents cited “pay was too low” as a reason.

The present economic landscape in the US has workers just as concerned, if not more concerned, about the size of their paychecks. For businesses, keeping employees at work in this state of hyperinflation means increasing salaries or finding other creative ways to help employees financially. Increasing wages to keep up with inflation would be a huge step toward keeping employees in the office.

Should businesses choose to keep pay rates at their current levels, they need to understand that such action results in their employees effectively taking an 8 to 10 percent pay cut due to the current aggregate rates of inflation. There is little hope that this would not result in many more people quitting their jobs and looking for other opportunities.

Better work environment could increase retention

Very few industries were left untouched by the effects of the pandemic. However, the healthcare and IT sectors saw the most change. Those two industries saw their employees repeatedly pushed to their limits and, as a result, resigning at record rates.

Healthcare professionals were required to work non-stop at hospitals to care for Covid patients. Conditions were made worse by the lack of therapeutics to treat the conditions brought about by Covid. In addition, many patients brought strong opinions about Covid therapies to the hospitals with them and confronted healthcare workers with these opinions.

These increased demands resulted in healthcare workers bearing unprecedented levels of stress. As a result, healthcare workers ranked as the second-largest sector in terms of resignations. Toward the end of 2021, one in five healthcare workers had left their jobs.

IT professionals were also taxed during this season with facing new — and often unprecedented — demands. Out of nowhere, IT professionals were called upon to create remote access environments designed to allow workers to stay connected and productive. Not only did they need to create a new technology infrastructure, but they also needed to support it.

As early as August of 2021, which was less than six months into the pandemic, tech companies were reporting a mass exodus. A year after the pandemic dramatically increased the demands on tech workers, less than one in three are reporting that they have a “high intent” of staying at their current jobs.

According to the Pew Research study, the issues leading to resignations in the IT and healthcare industries were found to be present in many other industries. While financial factors ranked first in terms of why people resigned, second on the list of reasons for leaving was “felt disrespected at work,” which was cited by 57 percent of those who resigned. Another 45 percent said “not enough flexibility to choose when to put in hours” was a reason for resigning, and “working too many hours” was cited by 39 percent as a reason for resigning.

Addressing employees’ financial concerns is clearly at the top of the list for employers who are looking to slow the rate of resignations in their organizations. However, for those who cannot keep up with financial demands, increasing non-monetary benefits like flexible work hours and remote work opportunities may hold a key to attracting and retaining employees. Regardless, employers must acknowledge that the Great Resignation has brought new expectations that must be addressed.

Michael Gibbs is the CEO of Go Cloud Careers, a global organization that provides training for elite cloud computing careers. Go Cloud Careers is focused on helping individuals achieve their dream technology career by getting hired. Michael has 25 years of experience in networking, cloud computing, and IT security.

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