Employees are quitting in droves this summer – and it will likely get worse
It is said that starting a business is a big challenge, but maintaining one is an even bigger challenge. And it doesn’t matter if you have 3 or 300 employees, one of the biggest challenges you face right now is hiring and retaining the right people. And that is made all the more frustrating because in many respects, the economy is red-hot.
As a business owner – or an executive in charge of running a business, division or department – what can you do better to keep your employees? And do you really know why employees quit? Here’s a hint: it’s not about money.
I Quit
Employees are quitting at record rates and employers are worried that the pace of quits will pick up dramatically for the remainder of the year. And to validate the worries employers are feeling, Korn Ferry surveyed employees and found the following:
- 85% of employees who quit have no regrets about doing so
- 31% said they plan to quit their job without having another one lined up
- 45% are more likely to quit without a job than they would have been before the pandemic
Want more bad news? Well, of those who plan to quit or have done so already:
- 36% said the pandemic allowed them to reevaluate what they need and the changes they want to make
- 32% said the culture of their current organization pushed them to resign
- Only 25% said a higher salary was motivation to leave.
Understanding the JOLTS Report
Want proof of how many are quitting, even during the pandemic? Look no further than the Labor Department’s JOLTS Report (the Job Openings and Labor Turnover Survey), which tracks monthly changes in job openings as well as job offerings and “quits.”
Unlike other reports that track employment data, the JOLTS reporting period lags by a month, although it does provide additional color to the employment landscape.
On August 9th, the Labor Department reported that on the last business day of June, the job openings level increased to a series high of 10.1 million, which was a gain of 590,000.
Further, the job openings rate rose to 6.5%. Job openings increased in several industries, with the largest increases in:
- Professional and business services (+227,000);
- Retail trade (+133,000); and
- Accommodation and food services (+121,000).
The DOL also reported that the quits level and rate increased to 3.9 million (+239,000) and 2.7%, respectively. Quits increased in:
- Professional and business services (+72,000);
- Durable goods manufacturing (+47,000); and
- State and local government, excluding education (+33,000).
Job openings rate, seasonally adjusted, June 2018 – June 2021
It’s Worse for Small Businesses
As reported in the NFIB’s monthly jobs report for July:
- 49% of owners reported job openings that could not be filled and
- 27% are forced to raise employee compensation in the next three months.
Both of these are 48-year record highs.
What Can a Business Owner Do?
While employers might want employees to return to the office in-person, getting them to do so will be hard, especially since 60% of employees said they would quit their jobs if forced to return, according to Flexjobs. And fear of COVID is not the top reason employees cite either.
While COVID is a top concern, the fact that the average employee saved about $5,000 during the pandemic because of reduced commuting and food costs is just as important.
There is no doubt that the next few years will be very different when it comes to running a business and hiring employees – more of us will be working from home, our technology will get better and maybe even a four-day workweek might become the norm.
Your financial advisor is a great resource to help you with your business – from helping you find talented employees to helping you keep talented employees. And remember, for your employees – it’s not just about money.