DENVER, Colo. — During the pandemic, people are leaving their jobs in search of more money, flexibility, and happiness. All of that is leading to a dramatic increase in resignations, which is causing a nationwide employee shortage.
“Well, the pandemic was truly unprecedented in terms of the economic impact it had,” said Glassdoor labor economist Dan Zhao. “We never had a crisis that evolved so quickly that millions of people were unemployed at a drop of a hat.”
According to the Labor Department, a record 4 million people quit their jobs in April alone, leading to what experts are calling "The Great Resignation" and a drastic shortage of hourly employees across the country.
“Demand for workers is also very high,” Zhao said. “That’s why we’re seeing jobs opening at record levels. There are over 10 million jobs open today."
More than 740,000 hospital, restaurant, and hotel workers quit in April, according to the Labor Department.
“We saw in August over 4 million people quit their jobs,” Zhao said. “In part, that’s a reflection in fact that during the pandemic many workers re-evaluated their priorities. They weren’t getting what they wanted out their jobs, better pay, better benefits, and better career opportunities.”
According to Zhao, the pandemic has given people all kinds of reasons to change direction in their careers. The pandemic has allowed them to save money to find that different path.
“The extra savings provide a financial buffer, and they can be a little pickier when they want to take the jobs,” Zhao said. “But those savings aren’t enough to keep them out of the workforce permanently.”
However, business finance expert Mac Clouse said while this is good for people to change careers, businesses across the country are still hurting due to a lack of employees. Clouse said fewer employees have an impact on the consumer.
“The scary part is that it may get kind of cut off a bit when we see prices rising so high that consumers no longer have the income to afford not to work,” Clouse said. “The quickest fix to get employees to come back is offering higher wages. That’s the easiest thing to do but somewhere down the road the higher wages that’s being paid means higher prices for the product being produced.”
It’s not clear how long this employee shortage and work demand is going to last.
However, Zhao believes this will start to push companies in a different direction on the way they recruit.
“Because we’re seeing large corporations commit to long-term wage increases, they know it’s a structural issue,” Zhao said. “They’re going to continue to face this down the road which is why they’re trying to get ahead of it now.”