Picture this: The year is 2022. The number of COVID-19 cases is tapering off. Many work-from-home employees are being called back to the office, and intercontinental vacations are on the rise again. It seems like life is finally returning to its pre-pandemic normal.
Except, you notice that an alarming number of establishments have one not-so-typical thing in common: They all have signs on their front doors that say, “Now Hiring” in big, bold letters. From the signage at your favorite local coffee shop to the printed poster at the bank’s teller window, everyone needs new employees—but why?
Enter the Great Resignation, a period that began in 2021, during which approximately 47 million employees in the United States quit their jobs. While many Americans didn’t immediately notice resignation rates rising, within a year, it was clear that people were leaving their positions en masse in favor of better work opportunities and an improved work-life balance.
Today, we’re discussing the causes of the Great Resignation and how it’s impacted the United States economy in the months and years since.
What Caused the Great Resignation?
There’s no one particular catalyst for the Great Resignation. Rather, people left their jobs for myriad reasons, including:
- Pandemic-related factors
In 2021, the health concerns surrounding COVID-19 were still considerable. So, when companies began asking their employees to return to work, many didn’t feel safe enough to work in such close proximity to others. In addition, many people enjoyed working from home and the work-life balance that it often provided. Some employees who wanted to continue working from home chose to resign from their jobs in search of other remote positions.
- Job dissatisfaction
Another cause of the Great Resignation is that of low wages and a lack of benefits. According to a survey by Microsoft Corporation in 2022, 43% of workers said they were somewhat or extremely likely to consider changing employers that year. Many employees did so because they found similar positions that paid a higher salary or offered more substantial benefits.
- Shifts in workforce demographics
The Great Resignation saw an increase in retiring baby boomers, with many opting for early retirement rather than returning to work after COVID-19. However, it wasn’t the baby boomers leading the charge in the alarming rate of resignations. Instead, millennials and Gen Z were at the forefront. The number of people aged 30 to 45 (millennials) who have quit their jobs has increased by 20% since 2020. In addition, job transitions by people under age 30 (Gen Z) have increased by 80% since the start of the pandemic.
- Childcare responsibilities
Amidst virtual schooling and daycare closures, many parents had to exit the workforce to prioritize caring for their families. This was especially prevalent for mothers and single parents.
Short and Long-Term Impacts of the Great Resignation on the Economy
Since the start of the Great Resignation, there have been numerous short- and long-term implications for the U.S. economy, including:
- Labor shortages
Integral industries like healthcare, education, retail, and manufacturing were hit particularly hard by the pandemic. This resulted in a shortage of employees and companies that were desperate to fill empty positions.
- Wage inflation
With labor shortages increasing, many businesses began introducing more competitive benefits packages, such as higher starting salaries, signing bonuses, and impressive health and vacation plans. However, to offset these added costs, many businesses increased the prices of their products and services, contributing to the average inflation rate of 8% in 2022.
- Supply chain disruptions
As industries such as transportation and manufacturing saw a decrease in employees, delays and shortages in goods became more prevalent.
- Shifts in types of employment
Gone are the days of the mainstream salaried worker. In their place have risen freelance workers who have either resigned from their full-time positions or added freelance work to their busy to-do lists. A recent study from the Upwork Research Institute showed that 64 million people in the U.S. took part in freelance work in 2023: a stark increase from 4 million the year prior.
Your Career in Finance Begins at UTPB
Whether you’re interested in helping individuals with their personal finances or you’d rather work with businesses on a corporate level, The University of Texas Permian Basin offers several programs tailored to working professionals. Each program is 100% online, so you can complete the courses in a time frame that aligns with your schedule.
Depending on what stage of your career you’re in, we have three online programs to choose from, including:
- Bachelor of Business Administration in Finance
Our online BBA in finance is an excellent choice for those just starting their careers in the financial sector. The core courses will help you develop a well-rounded financial management skill set, and a wide selection of electives gives you the ability to customize the program toward your professional goals.
- Master of Business Administration in Finance
If you want to focus on the business and financial aspects of your growing career, our online MBA in finance provides strategic thinking and management skills that you can apply to real-world scenarios in several industries.
- Master of Science in Finance
This 30-credit online master’s degree focuses heavily on financial management, building on the executive decision-making skills needed to thrive in the corporate world and finance industry.
Once you’ve chosen a program that aligns with your interests and aspirations, apply today to begin paving the path to your future.
Sources:
https://fortune.com/2022/12/29/baby-boomers-great-resignation-quit-rates/
https://www.investopedia.com/the-great-resignation-5199074
https://www.worktango.com/resources/articles/10-industries-great-resignation
https://www.forbes.com/sites/edwardsegal/2024/05/14/how-and-why-the-freelance-workforce-continues-to-grow-and-change/