Four Reasons To Celebrate The Great Resignation
Competition for labor is forcing employers to design better jobs for lower-level workers — and that benefits everybody
There’s been a lot of talk lately about the Great Resignation, where legions of worker are reportedly leaving their jobs due to pandemic-related burnout, creating labor shortages for employers that threaten their bottom line.
But with 2021 data from the Bureau of Labor Statistics showing the number of Americans quitting their jobs being somewhat lower than the number of new hires, the Great Resignation appears to be more like the Great Reshuffling or, more accurately, the Great Churn at the Bottom.
Yes, the bottom. The data are clear – the biggest increase in quits is happening among workers in low-wage jobs in industries like leisure and hospitality, food service, and retail and manufacturing. People in these lower-level jobs are not taking sabbaticals to consider their life priorities. Rather, they are taking new jobs where the terms of employment are better. Things like higher wages ($15/hour vs. $10/hour), flexible work schedules (with guaranteed breaks vs. stand-on-your-feet-all-day requirements), improved benefits (paid sick days vs. not feeling well? Sorry, you’re on your own), and greater respect (with opportunities for advancement vs. dead ends) are what’s driving the churn and causing workers to head for the exits and bravely demand more for their time and efforts.
As Founder and Chief Scientific Officer of the Workforce & Organizational Research Center (WORC), I’m deeply committed to making sure all jobs are worth having. Through our partnerships with investors, nonprofits, and employers, we successfully help companies improve conditions for their frontline workers and reduce turnover, increase productivity, and reach their business goals.
Rather than see the Great Resignation as a problem, I see it as a Great Opportunity for creative companies who want to win at the employee retention game and forge new pathways to success. Competition leads to innovation and while we still have a long way to go, I see innovation resulting in improved job quality for frontline workers.
So, hats off to the Great Resignation! Here’s more on why I see it as a cause for celebration:
Companies that improve jobs for lower-level workers are winning at DEI. Today, diversity, equity, and inclusion are business imperatives and worthwhile jobs lift all populations, particularly those most harmed by systematic inequality and concentrated in lower-level positions. Reaching long-term equity and inclusion goals is impossible without improving lower-level job quality.
Competition for workers has caused wages to increase. Wage rates in lower-level jobs have jumped substantially in the last 12 months. Earnings are up over 12%, which is vitally important to business success and employee well-being. A recent report by JUST Capital found the top quintile of companies in their living wage ranking have returned 12.3% compared to bottom quintile companies who have seen a 1.1% return relative to their industry peers. The bottom line: Companies paying a living wage show better returns than companies that don’t.
Workers who are compensated fairly are more engaged. Better-paid workers are more engaged and productive. That statement is supported by solid social science research. But, if you’re not convinced, just ask any business owner whose lower-level workers are stampeding out the door because a competitor is offering higher wages. And engagement hits the balance sheet. According to a 2020 Gallup study, companies with the highest engagement ranked 23% higher in profitability, 18% lower in turnover, and 81% lower in absenteeism.
Improving workers’ social and emotional well-being is good for society. The benefits of good jobs are foundational for social participation, responsibility, and progress. Worthwhile jobs promote work-life balance; community and family engagement; and improved physical, mental, and emotional health. Investing in workers delivers equity, inclusion, security, opportunity, and much more – and unlocks the business value of an engaged, experienced workforce.
Our goal at WORC is to help employers invest in their workforce and treat their lower-level workers like an asset to be maximized, not a cost to be minimized. And with competition over labor driving innovation, the Great Resignation is helping our cause. Through human-centered research, tools, and frameworks, we are helping our partners build the case for better jobs and creating the pathways to get there.
Ellen G. Frank-Miller, PhD, has spent her 30-year career collaborating with employers, national advocates, and community-based organizations to help make frontline jobs better and more accessible to all people. An organizational scholar by training, Dr. Frank-Miller has 15 years of experience in HR consulting and excels at creating evidence-informed programs and policies. Prior to launching the Workforce & Organizational Research Center (WORC), Dr. Frank-Miller founded and led the Workforce Financial Stability Initiative at the Social Policy Institute at Washington University in St. Louis. She earned her PhD at the University of Chicago.
