Coronavirus lockdown measures have brought us economic straights in parts of this country like we have not seen since the Great Depression. But as businesses begin to get back to work, it looks as if we are seeing the light at the end of the tunnel. What we would typically look for in our efforts to judge the health of the economy would be the unemployment rate. But something strange is happening, something that has driven the “quits” rate to a historic high.
Quits Levels and Rates is a metric monitored each month by the Bureau of Labor Statistics. The Quits rate is the number of verified incidents of a person quitting their job, and this month more people have quit their jobs than at any point in which the rate has been tracked.
Until now, the highest Quits rate was reached in the year 2000 at about 2.7%. The quit rate for May 2021 was 3.1%. It’s not something that is being widely reported on. However, the Wall Street Journal posted an article entitled, “Forget Going Back to the Office—People Are Just Quitting Instead.”
According to the article, “In April, the percentage workers quitting was 2.7%, according to the Labor Department, up from 1.6% the previous year. The shift is prompting employers to raise wages and offer promotions to keep their best talent from quitting. The desire for change by employees indicates many are feeling confident about looking elsewhere for better prospects, despite the elevated unemployment. High quit rates punish employers with higher turnover costs and disruptions. Economists say churn tends to signal a healthy labor market as workers are attracted to jobs that better suit their skills and interests.”
But these high quit rates are not holding across all industries. Workers in the hospitality industry have the lowest quit rates, even lower than in 2019. According to the BLS, the age group that showed the most change in employment was the 60 to 64 age range. But this age group didn’t leave their jobs for better ones, they left the jobs to retire. The second-largest age group to change jobs is the 25 to 34 age group. In 2020, the 25 to 34 age group had the largest quits rate by far. This year, the retirees outpaced them by double. Still, quit rates are elevated across the board overall.
There are a number of factors that we can reasonably assume contribute to this phenomenon. First and foremost, is the fact that many people have been forced into working at home. They have become accustomed to working without being under the constant scrutiny of management. Interestingly, at the same time, companies have been looking to technology to find new ways to track what their employees are doing online during the workday.
In short, the American workforce has gotten a taste of freedom, and they like it. This is a bell that cannot be unrung, and chances are high that it will have a lasting effect on the way we get things done.
Power to the People!!