Every organization expects a reasonable resignation rate from employees. According to the US Bureau of Statistics, this number stands at 10.9% worldwide and 12% to 15% in the United States.
Most employees usually quit their jobs for personal reasons, but when they resign in droves throughout the entire nation, it becomes a cause for concern.
The United States experienced such mass resignation in 2021 amid the COVID-19 pandemic. Millions of employees voluntarily quit their jobs to search for better, more flexible ones.
The magnitude of departures was so high that Anthony Klotz, a business professor at Texas A&M University, dubbed it the “Great Resignation.” Lisa Curtis, an entrepreneur and CEO of a leading brand in America, called it “The Big Quit” in her article in Forbes.
The Great Resignation: Why Did So Many Employees Quit Their Jobs in 2021?
To put the Great Resignation into perspective, at least 4 million American employees quit their jobs every month in the second quarter of 2021. The percentage of American workers who resigned from their organizations in all US regions and industries averaged 2.73% in 2021. Before the pandemic, this number had never exceeded 2.4%.
In 2021, by contrast, only one month recorded a resignation rate lower than 2.4%: January at 2.3%. All other months after that recorded a number higher than 2.4, with the highest being 3.0%.
Why did so many employees quit their jobs in 2021? What could have been the trigger? This article highlights the causes and effects of the Great Resignation. It also provides statistics on the most impacted months, industries, and demographics.
Defining the Great Resignation
The Great Resignation, also called the Big Quit or the Great Reshuffle, refers to an economic trend in the United States in 2021 in which hordes of employees voluntarily resigned from their jobs.
The term Great Resignation was coined by Antony Klotz, a psychologist, and business professor, in May 2021 during his research on the issues causing many American employees to quit voluntarily.
According to many experts, the Great Resignation began either in the last quarter of 2020 or early 2021, as the COVID-19 pandemic was still ongoing. The phenomenon started after the rolling out of COVID vaccines and the lifting of travel restrictions. Companies resumed normal business operations, and employees were called back to work.
11 Causes of the Great Resignation
Although the reasons behind the Great Resignation were many, most revolved around the pandemic. The pandemic was the main trigger but not at its onset. The Great Resignation began after travel restrictions got lifted and the vaccine was distributed. Here are the main reasons many American workers quit their jobs in 2021.
1. Intense Competition for Workers
2021 began with intense competition for employees, which gave those dissatisfied with their current jobs a leeway to search for better ones. There was an increase in job opportunities in many sectors and industries.
The American government had just rolled out COVID vaccines and lifted restrictions. Therefore, many employers were confident in returning to business as usual. It was clear that the American economy was gradually recovering.
Most employers had fired or temporarily laid off workers when the pandemic started. Therefore, they needed to rehire after the economic situation got easier.
Rehiring fueled competition for workers, giving most the confidence to quit their jobs and take up better ones. Employees who had delayed resigning for fear of lacking opportunities finally felt comfortable leaving their current employers.
2. Employee Dissatisfaction in the Workplace
According to a survey by the Pew Research Center, some workers resigned due to dissatisfaction with their current employers. Most, especially Gen Zs and millennial employees, cited they felt disrespected at work.
Some felt their organizations didn’t do much to help them through the tough times of 2020. The Pew Research Center study showed that this was the third key reason workers quit their jobs in 2021.
3. Low Pay and Lack of Benefits
As the Pew Research Center cited, low pay and lack of benefits were two other reasons employees left their jobs in 2021. The pandemic gave most workers time to analyze their careers and reevaluate their priorities.
Some felt dissatisfied and unfulfilled in their current occupations and thus wanted better ones. Therefore, when hiring opened up, employees quickly took up this opportunity.
4. No Career Growth
Lack of career growth was the second main reason workers quit in 2021. But since employers were on a hiring freeze during the pandemic, most delayed their exit until job opportunities opened up. The onset of 2021 was the right time for such workers to leave their current employers.
5. No Work-Life Balance
COVID-19 forced many people to work from home. Many realized the benefits of working from home, for example, comfort, reduced commuting cost and time, and better work-life balance.
The travel restrictions and pain of losing or being far away from loved ones also made employees reevaluate their priorities, with some realizing they valued other things more than their work and career.
When hiring picked up, workers left to search for jobs that would grant them a healthier work-life balance.
6. Employee Burnout
COVID-19 also contributed to stress, with many worrying about their future and loved ones. Many workers lost not only their family but also their colleagues to sickness or death.
Additionally, organizations had temporarily laid off workers, and thus, the remaining ones had to put in more hours. All of these factors elevated levels of stress, which may have played a role in many employees resigning.
7. Childcare Issues
Some employees resigned because they didn’t have anyone to care for their kids. Most cited they had a challenge getting daycare services, and their organizations were not doing much to help with the situation. Some workers also resigned to care for ailing loved ones.
8. Lack of Work Hour Flexibility
Many employees found working from home more comfortable and flexible. They became accustomed to this work lifestyle and thus were reluctant to return to the office. Some resigned when their organizations demanded a return to the regular nine-to-five work schedule.
The pandemic also led to the rise of remote and hybrid work opportunities. It made employers comfortable with this work lifestyle, so some were willing to allow employees to work from home.
When hiring opened up, employees quit their current jobs to take up those with more flexible work arrangements.
9. Relocation to a Different Area
Although unrelated to COVID-19, some employers quit their jobs in 2021 because they wanted to relocate to another area. The study by Pew Research Center cited that this was one of the minor reasons why some employees resigned.
10. COVID-19 Vaccine Requirements in Companies
Many Americans initially hesitated to get the vaccine due to personal, political, and religious reasons. The American government issued a temporary directive requiring private organizations with at least 100 employees to get the vaccine or undergo weekly testing.
Some employees saw this mandate from the government and some employers as a breach of their rights and freedom. They chose to resign instead of complying.
11. Fear of Getting Infected With the COVID-19 Virus
Having seen the deadly and contagious nature of the COVID-19 virus, some employees resigned because they didn’t want to get infected. The outbreak of Omicron and Delta variants may have also elevated employee fear.
Some employees were reluctant to return to the office when their organizations required them to get the vaccine, so they resigned for their safety.
Monthly Statistics of the Great Resignation in 2021
A total of 48 million American employees voluntarily resigned from their jobs in 2021. The average resignation rate was 3.98 million per month. The magnitude of resignations was also higher in the second half than in the first half of 2021.
From January to June 2021, monthly resignations ranged between 3 million and 4 million employees. However, from August to the end of 2021, monthly departures rose to more than 4 million. In the second half of 2021, 25.6 million workers quit their jobs.
Here are the month-to-month statistics of resignations from July 2021 to March 2022:
- July 2021: 4,028,000 (2.8%)
- August 2021: 4,270,000 (2.8%)
- September 2021: 4,362,000 (2.9%)
- October 2021: 4,157,000 (2.8%)
- November 2021: 4,500,000 (3.0%)
- December 2021: 4,300,000 (3.0%)
- January 2022: 4,032,000 (2.8%)
- February 2022: 4,352,000 (2.9%)
- March 2022: 4,504,000 (3.0%)
Demographic Statistics of the Great Resignation
According to the Pew Research Center, most American workers who quit jobs in 2021 were Gen Zs and millennials aged between 18 and 29. They cited low pay, lack of career growth, and disrespect at work as the main reasons for leaving.
Employees aged between 30 and 49 came in second at 17%, and those aged 50 to 64 were third place (9%). The generation with the least number of resignations were the baby boomers aged 65 or older, at only 5%.
In terms of income and education level, employees with low incomes quit the most, followed by middle-income individuals and high-income workers.
Employees without bachelor’s degrees also had a higher resignation rate than those with undergraduate and postgraduate degrees.
Industries With the Highest Quit Rates During the Great Resignation
Accommodation and food service industries were the most affected by the Great Resignation. These two sectors, together with healthcare, were also the most affected by the pandemic.
Retail and the technology industry also recorded high numbers of resignations, with most workers looking for more flexible jobs. Here are the sectors that documented the highest resignation rates in 2021.
- Accommodation and food services (6%)
- Leisure and hospitality (5.6%)
- Retail trade (4.7%)
- Transportation and utilities (3.6%)
- Professional and business services (3.2%)
Other industries that were affected include:
- Grocery Stores
- Social Services
Effects of the Great Resignation
The Great Resignation has tremendously impacted the entire United States’ labor market. It has influenced many companies to change how they conduct business by allowing employees a more flexible work schedule and many other benefits.
Let’s look at four consequences triggered by this economic trend.
- Labor Shortages
The Great Resignation essentially turned the tables of employment. Now, it’s not the employee searching for a job but the employer looking for workers. The power held by employers over the hiring process has changed, or at least lessened, thus giving workers more bargaining control.
Some employers are now willing to offer higher pay, more benefits, and flexible working schedules to attract candidates.
- High Employee Turnover
The Great Resignation has elevated the rate of employee turnover. It has resulted in employees with less loyalty toward their companies. High employee turnover may, in turn, affect the morale of those who remain at the company. Low morale can cause disengagement and reduce productivity. Employers need to now think of creative ways and strategies to retain employees.
- War for Talent
The Great Resignation also led to an increase in job opportunities in the United States. A Federal Reserve Bank of St. Louis survey reported an increase in job openings from an average of 4.28% in 2020 to 6.25% in 2021.
The first quarter of 2022 also saw a rise in vacancies to an average of 7%. Job recruiting websites and companies were busier than ever in 2021.
- Costs of Talent Acquisition
Acquiring new talent usually comes with job advertising, interviewing, and onboarding costs. It also diverts the company’s attention from business operations to attaining new employees.
Organizations shift their time and attention to interviewing prospective candidates, reviewing resumes, creating job listings, and conducting background checks.
- Business Disruption
When employees resign, the organization’s momentum gets disrupted. Productivity takes a dive, and progress toward performing tasks reduces.
The departure of hordes of employees from one organization can tremendously hurt an organization’s operations. It may also disrupt the company’s effectiveness in serving customers.
- The Corporate World
One of the reasons businesses are struggling to fill positions is due to the Great Resignation. Companies have a limited pool of talent to choose from and need to be competitive to fill some positions.
As The Great Resignation continues, we will see changes in how companies deal with labor shortages.
For the latest information, see the latest search results on The Effect of the Great Resignation in Corporate America.
- Labour Force
Naturally, The labor force is affected by The Great Resignation. With an increase in people resigning, a shortage in the workforce is a natural occurrence, along with a shift in the type of work people apply for.
We can’t see all the effects at this time since the practice is ongoing, but it makes sense to check out the latest search results for the latest and most popular information about the effects of The Great Resignation on the Labor force.
According to recent data, resignation costs for one employee average over $11,000. These costs are related to onboarding, lost time, and lost talent. Considering the Great Resignation cost is always being updated, it makes sense to check out the latest Search results related to the cost of The Great Resignation.
The Great Resignation greatly affected American employers and the United States labor market. At least 25% of the total American workforce voluntarily resigned from their jobs in 2021.
This economic trend also led to a surge in job vacancies since every resignation from an employee was a job opening for another. Most employers had to sweeten their employment deals to attract and retain top talent.
For in-depth information about The Great Resignation, see the books on amazon.
Some of the ones listed include:
- The Great Resignation: Why Millions are Leaving Their Jobs and Who Will Win the Battle for Talent
by Russ Hill and Jared Jones | Oct 30, 2021
- The Great Resignation: Understanding and Adapting to the Forces Revolutionizing Work
by Benjamin Wann | Jul 3, 2022
- The Great Resignation: How Coaching and Appreciative Leadership Can Help You Win the War for Talent
by Laura Darrell – MA Leadership | Aug 1, 2022
Google News is a great way to keep up with the latest stories covered by the media about The Great Resignation. You can also set up a News Alert to get a notification anytime something new is published.
There are a variety of videos on YouTube that offer different perspectives. When watching a video, you can also view related topics that appear on your screen. See the most recent videos related to the great resignation.