Why are people leaving the workforce?
This week and next we welcome very special guest, Megan Wagner, of Marketing Coach Megan. She is a former student and now colleague and friend. The two of us hosted a Clubhouse event to discuss The Great Resignation and we thought it would make a wonderful podcast because there is so much information about people leaving the workforce exacerbated by the pandemic.
#TheGreatResignation has been widely discussed during the pandemic. It was coined in 2019 by Dr. Anthony Klotz, associate professor in the Mays School of Management at Texas A&M University, and refers to a mass exodus from the workforce.
The U.S. Department of Labor noted that in April, May and June of this year, 11.5 million workers quit their jobs. A record 4 million Americans quit their jobs in April, twice the number who quit in April of the previous year. An additional 3.9 million quit in June. That leaves the balance of 3.6 million who left in May.
Other sources we used on the podcast in reference to The Great Resignation include a survey conducted by The World Economic Forum as well as a survey conducted by Microsoft as part of its Work Trend Index. Both are quite robust and include responses from around the world. [As a note, on the podcast, I said that the WEF survey was a LinkedIn survey and the Microsoft survey was part of its World Trend Index rather than Work Trend Index. Yikes!]
I also reference data from Gallup and Pew Research. I provide the links but also include some of the graphics below that I referenced on the podcast. The sites are worth a look because Gallup and Pew are both excellent resources and provide scads of data.
From Gallup:
U.S. Labor Force Participation Trends, February 2020 to February 2021, by Gender
Seasonally adjusted
Number in labor force February 2020 February 2021 Change
Women, 20 and older 74,501,000 72,173,000 -2,328,000
Men, 20 and older 83,930,000 82,095,000 -1,835,000
Difference (net women) -9,429,000 -9,922,000 -493,000
Percentage in labor force
Women, 20 and older 59.2% 57.0% -2.2 points
Men, 20 and older 71.6% 69.6% -2.0 points
Difference (net women) -12.4 points -12.6 points -0.2 points
It should be noted that more women left the workforce than men even though men make up more than half the workforce to begin with. Several reasons account for this as we will see in the following data:
U.S. Labor Force Participation Rate, by Gender and Child Under 18 Status
Based on adults aged 25 to 55
Women with Women no Men with Men no
children (%) children (%) children (%) children (%)
February 2020 74.7 78.4 93.5 86.5
January 2021 72.4 76.7 92.7 84.8
Change -2.3 points -1.7 points -0.8 points -1.7 points
Source: IPUMS USA, University of Minnesota
Overrepresentation and Underrepresentation of Women in Major Occupational Categories
OCCUPATIONS MOST OVERREPRESENTED BY WOMEN%)
Share of female workers Increase in
(%) unemployment rate
(pct. pts.)
Healthcare support 86 +3.9
Personal care and service 75 +10.7
Office and administrative support 75 +2.2
Healthcare practitioners and
technical 75 +0.6
Educational instruction and
library 74 +1.0
Community and social service 66 +2.1
Food preparation and serving 55 +10.8
OCCUPATIONS MOST OVERREPRESENTED BY MEN
Management 42 +1.4
Production 31 +1.5
Farming, fishing and forestry 28 -3.9
Computers and mathematics 27 +0.5
Protective service 24 +1.8
Transportation and material
moving 21 +3.4
Architecture and engineering 17 +0.4
Military 14 n/a
Installation, maintenance and
repair 4 +8.3
Construction and extraction 4 +5.5
Source: IPUMS USA, University of Minnesota
GALLUP
Reasons That U.S. Adults Are Not Working, by Gender
Women with Men with Women Men
children (25-55) children (25-55) (all ages) (all ages)
% % % %
Jan 6-18, 2021
Care for children out of
school/day care 28 12 8 3
Economic reason 23 36 16 22
Other, not listed 22 19 17 15
Personal health reason 14 20 10 11
Concern for getting/
spreading COVID 5 6 4 7
Care for elderly/person
with COVID 3 3 3 2
Retired 1 2 37 36
Apr 23-May 5, 2020
Economic reason 47 62 37 44
Care for children out of
school/day care 23 11 8 2
Other, not listed 16 13 12 10
Personal health reason 7 8 7 6
Care for elderly/person
with COVID 1 2 2 1
Retired 1 1 31 32
Concern for getting/
spreading COVID -- -- -- --
Source: U.S. Census Bureau Household Pulse Survey, Weeks 1 and 22. Items asked for main reason for not working for pay or profit. Economic and personal health responses were regrouped into the larger categories shown. Concerns about getting or spreading COVID not recorded in April-May data collection.
GALLUP
As I noted, Pew Research also conducted much research. I share the graphs here so that you may view. These graphs are much more colorful than the Gallup visuals which makes them much more legitimate (that's a joke - color does not denote legitimacy).
We may also see how different generations in the workforce are doing over the course of the pandemic. Gen Z, our youngest members of the workforce, are not doing as well as their older counterparts as noted in the graphic below from the World Economic Forum:
While Gen Z struggles, who doesn't struggle as much? Business leaders according to this graphic from the World Economic Forum:
Business leaders are learning that it's time to listen to employees. With The Great Resignation comes increased cost to employers to replace employees and find quality talent. is very difficult to determine the exact cost since so many factors vary, but Toggl Hire has estimates from several companies. Business leaders are also forced to innovate if they want to survive. It truly is an employee's market.
The World Economic Forum notes several reasons for employee burnout:
Zoom fatigue
Kids at home and you have to work/school
Burnout
Other distractions
Lack of motivation
Too many digital tools to learn and use (fragmentation frustration)
A study done in the UK by Personio and Opinium noted some of the reasons for resignations:
Worsening work/life balance
Pay freeze or cut
Toxic workplace culture – lack of appreciation, poor management, etc.
Reduction in benefits
Being furloughed
Also many people:
Evaluated the true economics of a two-income household and determined that the benefits no longer outweighed the costs.
Started a dream business.
Have had it with being undervalued and unheard by toxic, narcissistic managers.
Are concerned with their personal safety in having to return to an on-site position while the pandemic still rages.
Harvard Business Review had a wonderful piece noting why and WHEN people start thinking about leaving the workforce including (the following is taken verbatim from the review):
Work anniversaries (whether of joining the company or of moving into one’s current role) are natural times for reflection, and job-hunting activity jumps by 6% and 9%, respectively, at those points.
Birthdays—particularly midlife milestones such as turning 40 or 50—can prompt employees to assess their careers and take action if they’re unhappy with the results. (Job hunting jumps 12% just before birthdays.)
Large social gatherings of peers, such as class reunions, can also be catalysts—they’re natural occasions for people to measure their progress relative to others’. (Job hunting jumps 16% after reunions.)
Back to the Microsoft Work Trend Index survey of 30,000 people around the world. What are the work trends to pay attention to (the following is taken directly from the report)?:
Flexible work is here to stay - 73 percent of workers surveyed want flexible remote work options to continue, while at the same time, 67 percent are craving more in-person time with their teams. To prepare, 66 percent of business decision makers are considering redesigning physical spaces to better accommodate hybrid work environments.
Leaders are out of touch with employees and need a wake-up call -most business leaders are faring better than their employees. Sixty-one percent of leaders say they’re “thriving” right now — 23 percentage points higher than those without decision-making authority. They also reported stronger relationships with colleagues (+11 percentage points) and leadership (+19 percentage points), and a higher likelihood of taking all or more than their allotted vacation days (+12 percentage points). Business leaders surveyed were also more likely to be Millennials or Gen X, male, information workers, and farther along in their careers. In contrast, Gen Z, women, frontline workers, and those new to their careers reported struggling the most over the past year. And workers feel the disconnect. Thirty-seven percent of the global workforce says their companies are asking too much of them at a time like this
High productivity is masking an exhausted workforce - Nearly one in five global survey respondents say their employer doesn’t care about their work-life balance. Fifty-four percent feel overworked. Thirty-nine percent feel exhausted.
Gen-Z is at risk and will need to be reenergized - Gen Z. Sixty percent of this generation — those between the ages of 18 and 25 — say they are merely surviving or flat-out struggling.
Shrinking networks are endangering innovation – people are feeling the pandemic-driven isolation in their work and personal lives. Teams are more siloed.
Authenticity will spur productivity and well-being – As people navigated unprecedented stress on the front lines this year, balanced childcare and homeschool, worked from living rooms and quieted barking dogs, something changed: work became more human.
Talent is everywhere in a hybrid work world – A vast talent marketplace is one of the brightest outcomes from the shift to remote work. Remote job postings on LinkedIn increased more than five times during the pandemic, and people are taking notice. Nearly half (46 percent) of those we surveyed are planning to move to a new location this year, indicating that people no longer have to leave their desk, house or community to expand their career opportunities. This fundamental shift expands economic opportunity for individuals and enables organizations to build high-performing, diverse teams from a near-limitless talent pool.
Additionally, no longer can employers say that people need jobs so we can treat them any way we like. A wonderful piece by Lisa Earle McLeod notes that we need to stop saying that people don't want to work, they just don't want to work for you. Data are still being tallied in the wake of the cessation of additional federal/state unemployment benefits. It was initially thought by some that the reason people aren't filling many open positions is because they are getting more money with unemployment benefits. Preliminary data are showing this is not the case. What else are workers saying they want according to the Microsoft data?
Transparency.
To be trusted.
Employers who recognize that managing in a Zoom economy is different, and that their leaders need different skills and training.
Bosses who stop being skeptical whether they are actually working when they are at home.
To be respected by leaders who get that remote work is not an invitation for micromanagement.
To be recognized; in fact, according to bonusly.com, 63 percent of those in a recent survey who said they are regularly recognized also said they are very unlikely to look for a new job.
Organizations that understand that hybrid work requires management to communicate more, not less.
Boards and HR departments to finally awaken to the fact that narcissism is a malignancy and that bullies have no business managing other human beings.
To work for companies they can be proud of, that are involved in their communities and that take a stand for things that they believe matter.
To work for companies that cut bad costs discriminately, not for machete-wielding SG&A slashers who cut everything in sight.
To work for companies that believe the best time to invest in training and education is when business slows down.
A say -- in decision making AND in their own scheduling.
This seems daunting. Employers are scrambling to figure out how to make this work; some successfully, some less so. Don't say it can't be done because you will be in the later category. There is creativity in everything. Ask your employees....they may have answers.
What else can you do:
Create a plan to empower people for extreme flexibility.
Invest in space and technology to bridge the physical and digital worlds.
Combat digital exhaustion from the top.
Rebuild social capital.
Rethink the employee experience to compete for the best and most diverse talent.
That brings us to our ARS' for this two week period. At first I didn't think they were appropriate, but if you read this blog post and don't want to drink, kudos to you. If you, like me, enjoy a glass of wine or two, you might wonder what wines are most popular in the U.S.? According to USA Wine Ratings, the following are the top ten wine varietals in terms of sales in the U.S.:
Cabernet Sauvignon
Chardonnay
Pinot Gris
Pinot Noir
Sauvignon Blanc
Merlot
White Zinfandel
Malbec
Riesling
Shiraz
Our guest, Megan Wagner, also shared her ARS with us. According to alcohol.org, one in three Americans is likely to drink alcohol during working hours while in lockdown. We noted that we have NEVER done that!
Next week's ARS references a University of Michigan School of Public Health study on the toll certain foods have on our health. Specifically, how many minutes of life do we lose or gain eating certain foods and what impact does that food have on the environment. The worst thing we can eat? Hot dogs. (I wonder if adding sauerkraut counteracts the negative effect?) The following graphic from the study will help guide you to increases minutes of life:
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