April 6, 2022 – Trending in the press and social media is a phenomenon called the “Great Resignation!” It is the catchphrase for the millions who have quit their jobs, seemingly en-masse, since the beginning of 2021. Also known as the “Big Quit” or “Great Reshuffle,” how did it come about? Has employment changed or just the employee? Or have we just seen the “Great Realization?”
A Historical Perspective
Being a Financial Life Guide, I have had the opportunity to discuss the topic of “Human Capital” with my clients for over 20 years. Human Capital speaks to people’s wealth as it relates to what they do with their time and energy. The implications to your finances are well known; it is the earnings you make from work, your job, and your employment. It is a large majority of the time people spend before they “retire.” Early in your career, it represents your most significant asset – the present value of all future earnings. It encompasses our two most important resources – time and money!
Human Capital is at the heart of many clients’ most often cited quandaries: needing better work/life balance!
A deeper inspection of the drivers of this desire usually pointed to “work” as the culprit. At a base level, when considering their work life, clients often reported feeling unappreciated, under-compensated, and having complicated relationships with colleagues or managers. It seemed to be a more pervasive issue in certain circumstances, such as misalignment with company culture or the need to understand and follow your life’s purpose!
While many people felt this way, I was always surprised that few took any action to find a solution. Many firmly lived in the “rat race,” seeing each day pass as the last one. They were living a self-fulfilling prophecy – not gaining control of their time because they had no time to think about it, let alone make a change. Sometimes, this struggle manifests as a true “mid-life crisis” where anxiety becomes a feeling of depression, and indecision turns to irrational decisions.
The Bureau of Labor Statistics demonstrates that employment levels, and the number of people entering or leaving the workforce, will change over time. I would propose, and the markets believe, that this variation is rooted in economic factors and not from a systemic malaise that most workers felt about their jobs.
Major Shock to Our Way of Life
It was December 12, 2019, when whispers of patients in Wuhan, China experiencing shortness of breath and fever started to cross the ocean. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. We have endured a horrific experience, including losing loved ones and changes to almost every way we live our lives. Despite finding new strains, we emerge from this pandemic as a different society. Many believe some good has come from this tragedy, including myself, as written in the essay “Silver Linings Playbook.”
The COVID-19 pandemic set off nearly unprecedented churn in the U.S. labor market. Widespread job losses in the early months of the pandemic gave way to tight labor markets in 2021, driven by what’s come to be known as the “Great Resignation.” The nation’s “quit rate” reached a 20-year high in November 2021.
The Research Says….
Recent Pew Research Center survey findings were published in the article “Majority of workers who quit a job in 2021 cite low pay, no opportunities for advancement, feeling disrespected.”
In addition to the primary reasons of low pay, no opportunities for advancement, and feeling disrespected, others cited childcare constraints, working-hours flexibility, and benefits as essential factors. These are the same work/life balance factors facing employees’ pre-pandemic before we heard of Wuhan, China.
So Why Now?
Granted, some employee turnover relates to company policies on mandated vaccines. Some companies take a hardline stance on reducing remote work, while employees view the change as an entitlement rather than a work policy. But the research indicates these reasons are not significant drivers of employee transitions. So why are so many people taking a more proactive approach to their Human Capital?
I believe that while the “work factors” at play are the same as in the past (i.e., pay, benefits, a bad boss, etc.), the pandemic has allowed people to experience the all-important “life factors” that were missing in their pre-pandemic lives:
- Having breakfast and dinner with the family.
- Cooking meals at home and devising “staycations.”
- Being more productive with work rather than spending time commuting.
- Being appreciated based on your output rather than “face time.”
- Deeper conversations and relationships with loved ones.
- Reconnecting with friends and family via Zoom.
- Wearing comfortable clothes all day.
- Being involved in your children’s education.
- Many, many more!
These were dramatic changes, almost impossible to conceive were it not for the pandemic.
We have always stressed “The Power of Visualization” to clients as a technique to help determine their priorities in life. Some can do it; others have a hard time because “seeing is believing.” Amazingly, the pandemic provided people with the actual experience of living their lives differently, and now they know:
- They can save money or maintain a less expensive lifestyle while feeling more fulfilled.
- They have a much better perspective of their value at work or how their skills could be used differently or for a different company.
- They have experienced more control over their time and have learned to use it as a precious resource.
- They have a newfound respect for their health and the transitory nature of longevity. Every day now has a new sense of urgency.
Conclusion
I am hopeful that our experiences over the past two years have positioned each of us to be thoughtful and intentional about how we live our lives. The “Great Realization” should give us the incentive to make the needed changes. We owe it to our friends and families. But most of all, we owe it to ourselves!