As the impact of the pandemic continues to unwind, it looks like large numbers of Americans are considering quitting their jobs to find new ones. In this post, I will review what we are seeing in the broad economy and what you should think about if you one of the individuals looking to quit your job for a new endeavor.
The everyday headlines repeat similar messages. After dealing with all the ups and downs of the pandemic, workers are really stressed, and in many cases, fed up with their jobs. On the other hand, many workers remain reluctant to return to the office because of lingering fears of catching the virus, child-care or elder care challenges, still-generous unemployment benefits in some states or the prospect of collecting low wages if they return to work. Many others want to continue to work remotely and want an employer who will allow this.
This has led to an explosion of job openings (nearly 9.3 million according to a recent post on CNBC), despite a relatively high unemployment rate, as businesses struggle to recruit and retain employees — a dynamic that has placed power more firmly in workers’ hands. With employers offering higher wages to attract candidates, many workers — especially in low-wage positions in restaurants and hotels — are leaving their jobs and jumping to ones that pay even slightly more. They simply will not tolerate low-paying positions.
Surveys have warned for months that workers were itching to quit their jobs. The phrase “turnover tsunami” that was coined in a Society for Human Resource Management (SHRM) 2021 post is now well underway. The New York Times has used the phrase “the Big Quit” to describe what we are seeing. According to the Labor Department, nearly 4 million Americans left their jobs in April — the highest number on record for at least 20 years.
The New York Times says economists point to several factors that are at play:
There’s a backlog of quitters. During the height of the pandemic, fewer people quit their jobs than would have otherwise. Now, with the economy recovering, many feel more comfortable leaving their jobs.
The economy reopened quickly. For many businesses, demand has risen faster than workers can be hired to meet it, contributing to an explosion of job openings. Workers who want to quit have plenty of opportunities.
Low pandemic spending left some workers with savings. That gives them more of a cushion to cover a stretch of unemployment.
Some workers have reassessed their lives. They may have decided to spend more time with their families, start businesses, look for a job that allows remote work or change careers.
These same economists expect the unusually high rate of quitting to continue. But many businesses are reacting by taking the action that is likely to eventually tamp down turnover by increasing compensation.
All of this is coming at a time when workers are increasingly demanding more pay and better working conditions. They want more job flexibility, more opportunities for workers of color and more understanding from employers of mental health and child-care needs. Businesses are finally paying attention, largely because they are desperate for workers.
Planning for a Job Change
If you are one of these potential job changers, I have some ideas for you:
It is easier to find a job if you still have one. This is the old, but still correct adage, that you should not quit your current job unless you have a new one.
Be sure to determine if you will lose any stock options, 401(k) contribution vesting or other forms of compensation that are tied to your length of service with your current employer before quitting.
Research your new employer to make sure you know what kind of organization you are joining and that it matches your values and workstyle.
Nail down all the details of the new position including job description, compensation, benefits and the dates all benefits start. Ask for a copy of the employee handbook to do your research as part of the hiring process. In particular, determine when any new health and vacation benefits accrue and can be used.
Don’t forget about your old 401(k) as you change jobs. Plan to move the assets to an individual IRA or into your new employer’s plan to keep these assets working for you.
Summary
Are you looking to change jobs? If so, please be sure you have carefully planned your next steps. Take some basic actions to make sure you understand your new company, the compensation and benefits offered and when your new benefits will become effective. Planning should pay off in a drama and surprise free transition to your new job.
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