Job Quitters

The quitting trend that started during the pandemic is still here, and it’s not going away anytime soon. Job market trends are important to real estate investors because housing markets rely heavily where people are working. In this episode, you’ll hear about how the job market has changed, why more workers are quitting or changing the way they work, and the kinds of jobs they are seeking. (1) Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. This quitting trend has been called The Great Resignation, but a new study by McKinsey and Co. describes it as The Great Attrition which is now turning into The Great Renegotiation. This is happening because more and more people are rethinking their work-life balance and renegotiating the terms of their employment with a greater emphasis on their personal lives. The Great Renegotiation To get an idea of the magnitude of the change we’re seeing, data from the US Department of Labor shows the voluntary quit rate is 24% higher now than it was before the pandemic. Companies are scrambling to fill positions and keep them filled. In April of last year, there were 9.3 million job openings. Fast forward to May of this year, and there were 11.3 million job openings. That’s an increase of two million unfilled positions. As the McKinsey study points out, there’s a huge mismatch between the number of available jobs and the number of workers eager to fill those positions. What the study reveals about the current situation is that many companies are trying to fill an abundance of traditional positions with traditional workers, and that’s where things have changed. Although some 60% of workers are still traditionalists, according to this analysis, there’s a growing number of workers who won’t accept the old way of doing things. The McKinsey analysis includes survey responses from 13,000 people in six countries who answered questions between February and April of this year. 6,294 were Americans. One of the authors of the report, Bonnie Dowling, says of the work world: “This isn’t just a passing trend, or a pandemic-related change to the labor market. There’s a fundamental shift in workers’ mentality, and their willingness to prioritize other things in their life beyond whatever job they hold.” She says: “We’re never going back to how things were in 2019.” (2) Why Are the Quitters Quitting? The results show three patterns among the quitters. 1 - The first is a desire to “reshuffle” their careers. That’s driving the reshufflers from one industry to another. In fact, 48% of the non-traditionalists are reshufflers. But the exchange of employees is not balanced so that some industries are losing more workers than they are getting in return. 2 - The second pattern shows a desire to “reinvent” their careers. That might take the form of an employee transitioning from a traditional full-time job to one that’s not traditional. That could include work that’s part-time, temporary, remote or non-traditional in some other way. 47% of the survey participants fall into this category. 3 - The third pattern is one the study calls “reassessing.” That’s when people quit their jobs altogether to take care of personal needs and reassess their priorities. They might quit to take care of children, older relatives, or even themselves. Discontent Varies from Country to Country The desire to quit varies from country to country with India at the top of the list for discontent. The study shows that more than 60% of the workers in India want to leave their jobs. The second highest level of discontent was in Singapore, at 49%. The other four countries in this study include Australia, Canada, the United Kingdom, and the United States. Taken together, 40% of the participants expressed a desire to quit within the next three to six months. So what is it that makes a job that motivates workers to quit or to stay? The survey says that workplace flexibility is the most important factor in preventing employees from quitting. Meaningfulness of work is also right up there. Other factors include support for an employee’s health and well-being, a safe workplace, and inclusivity. Geographic ties also play into this equation, although it could be a moot point with remote workers. The things that drive employees away include a lack of adequate compensation. No surprise there. Following that, employees quit when the job doesn’t live up to their expectations. It could be a lack of career development or advancement opportunities. They also want reliability and support from colleagues, and bosses that are caring and inspiring. Five Worker Personas But that’s only part of the picture. The analysis shows a total of five worker personas with the traditionalists accounting for the largest share. They are the first type of persona and make up 60% of the workforce. The four other personas account for the remaining 40% and they are the ones who are most likely to quit in the next several months. The second type of persona is the do-it-yourselfer. This type of employee places a high value on workplace flexibility, although a high wage offer could draw them back to the traditional workforce. The analysis says they are typically between 25 and 45 years old, and want more autonomy in their jobs. That could drive them to self-employment or non-traditional full- or part-time jobs, or gig work. Third is the caregiver. These are the people who quit their jobs to care for others, and wind up passively looking for a new job. For them to return to the workplace, they need a flexible schedule and a lot of support. Fourth are the idealists. This category includes students and younger part-timers, typically between the ages of 18 and 24. They don’t have a lot of financial obligations yet, and are looking for work that is more meaningful. They want flexibility, career opportunities, meaningful work, and people in their work world that are reliable and supportive. Compensation is not as important. Last but not least are the relaxers. These people don’t really care if they have a job or not. They may be retired, or job optional, and might return to the workforce if the job is sufficiently important or meaningful. Employees Have Raised the Bar on their Jobs Dowling says of this work trend that: “People aren’t tolerating toxic bosses and toxic cultures anymore, because they can leave and find other ways to make money without being in a negative situation.” She says: “There are more opportunities for work now than ever before with our increased connectivity.” What this shift in worker mentality says to me is that a large number of people are reevaluating their work-life balance, and getting their lives into focus. That’s not always easy to do because we are confronted with so many distractions. My husband Rich is a professional coach and conducts a “Focused Investor” presentation at the end of each year. It helps people focus on where they are now, and where they’d like to be a few years down the road. You can do this at any time of the year by watching a replay of his latest presentation on YouTube. The clip is called: “The Focused Investor - Four Steps to Success in 2022.” And please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 - https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/the-great-attrition-is-making-hiring-harder-are-you-searching-the-right-talent-pools 2 - https://www.cnbc.com/2022/07/20/40percent-of-workers-are-considering-quitting-their-jobs-soon.html