Labor Market Optimism Is Reaching A Peak
Earlier this quarter, we wrote about how fast salaries are rising. It’s like nothing we’ve seen before.
One of the contributing factors to this trend is the mobility of workers. In April, 2.7 percent of U.S. workers left their jobs, compared to just 1.6 percent in April 2020, per the U.S. Labor Department.
The proportion of U.S. workers quitting their jobs for new opportunities is at the highest level in more than 20 years, according to a report by The Wall Street Journal.
The optimism among employees to explore and find new opportunities is creating pressure on companies to raise wages and find other benefits to retain their workers. It’s a huge shift from a year ago, when unemployment spiked and people favored job security.
Part of this is expected.
“When there’s uncertainty, people tend to stay put, so there are pent-up resignations that didn’t happen over the past year,” Texas A&M professor Anthony Klotz said in this Forbes article.
Expectations have also changed among workers, leading to more resignations. In a Prudential Newsroom survey, 87 percent of American workers said they prefer to work remotely at least one day per week. One in three said they would not work for an employer who required them to be onsite full time. This mindset is reflected in part by the changes in the housing market.
Another signal from the data is the challenge companies face in engaging with their remote employees. A high proportion of people leaving jobs are those who have never met their coworkers in person. As people return to the office, this trend could change, but don’t expect things to return to the way it was pre-COVID.
“It’s easier to sustain a relationship right now than to build a relationship,” Ally Financial Inc. Chief Human Resources Officer Kathie Patterson said to the Wall Street Journal.
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