It’s Not Just A Great Resignation, It’s A Sea Change
I wrote about the Great Resignation last year, it’s been a popular topic especially in personal finance circles. That post focused on the amount of new businesses being created while record numbers of “quits” were simultaneously recorded.
Resignations, or ‘quits’, have continued through 2022. This past May marked 12 straight months of more than 4 million people voluntarily leaving their job, according to CNBC.
But a recent study from McKinsey hints that something bigger is happening. A sea change around employment.
Reshuffle, Reinvent, Reassess
Here’s some of the big findings in the McKinsey report:
Despite significant changes in the economy since the onset of the Great Attrition (or what many call the Great Resignation), the share of workers planning to leave their jobs remains unchanged from 2021, at 40 percent. That’s two out of five employees in our global sample who said that they are thinking about leaving in the next three to six months.
Two out of five. That’s significant and the fact that it has stayed steady when the markets have tanked and inflation has roared is pretty amazing. You would think it would have declined and some folks would seek security and lay low through this recession.
The report goes on to list three main trends:
Reshuffling. Employees are quitting and going to different employers in different industries (48 percent of the job leavers in our sample). Some industries are disproportionately losing talent, others are struggling to attract talent, and some are grappling with both.
I think the pandemic socked a lot of people into realizing they’re stuck in an industry they’re no longer in love with. There’s lots to explore out there in the working world and most people have curiosities and talents in more than one place.
Reinventing. Many employees leaving traditional employment are either going to nontraditional work (temporary, gig, or part-time roles) or starting their own businesses. Of the employees who quit without a new job in hand, 47 percent chose to return to the workforce. However, only 29 percent returned to traditional full-time employment.
McKinsey analysis must read my blog because I recently posted about this very subject! You can read my post, I won’t rehash it here. Of course being financially independent makes reinvention easier and much safer.
Reassessing. Many people are quitting not for other jobs but because of the demands of life—they need to care for children, elders, or themselves. These are people who may have stepped out of the workforce entirely, dramatically shrinking the readily available talent pool.
Sometimes you just have to know when to call it quits. Life can be friggin hard. Trying to juggle the demands they list above and to simultaneously take care of your own health with a full time job is a plate-spinning trick of epic proportions.
Stress kills. And it seems millions of people are reassessing if it’s worth it. Clearly many are answering “no”.
I’m A Relaxer
The McKinsey report is long and has all sorts of charts and infographics about attitudes towards employment, reasons workers are quitting, and motivating factors that keep people in jobs, among others. If you’re like me you’ll geek out on the analysis.
A highlight is their breakdown and classification of different types of workers in the workforce. They go into great detail describing “the traditionalists”, the “do-it-yourselfers”, the “caregivers”, the “idealists”, and my favorite, the “relaxers”.
I’m clearly a relaxer now but have definitely been in some of those other categories at times in my life.
This is easier when you can work from home
Hope
I found the McKinsey report really hopeful and frankly a bit exciting. I know, what a dork. But seriously, it’s clear that a big sea change is happening around work, and it’s more nuanced than workers just quitting and hoping to score another job for a pay increase, or milking covid unemployment extensions.
This should excite everyone in the personal finance space. What are we chasing this magical personal finance thing for anyway? Freedom. More accurately, time freedom.
Freedom to work jobs we want to work, not ones we have to work. Freedom to start our own businesses, or to simply not work at all and enjoy life.
Time is that one precious and limited resource we can’t make more of. I’ve been taking back mine after going part time at my job in 2017. And it seems millions more out there are having a reckoning with their limited time, and finding ways to take some of it back.
Or at least when you’re trading it for money doing something you hate, to make it less painful to endure.
Your turn – Are you part of the work life sea change? If so what changes have you made?
I guess this would go under the reassessment group, but your article didn’t specifically mention the peak of the Baby Boom is turning 65 this year and eligible for Medicare. Just in numbers alone, I am guessing a big reason for people leaving jobs. Interesting read. Thanks for sharing.
That’s a great point and I don’t remember seeing it in the McKinsey Paper. I would think they or the BLS have been taking full retirements (age 65) into account when they consider what they call “quits”
i read the entire report and it was pretty interesting. i know my old guard former glorious organization will be the last to adapt to a changing work world.
i’m now a relaxer and had to wage a small and successful battle to retain my no BS job requirements. that hard charging stuff is a younger person’s game. the negotiation is much easier when you don’t really need the money so if you’re reading this and you’re younger: keep saving and investing!
Relaxers unite! And everything’s much easier when you don’t need the money innit? And to you young folk – check out Freddy’s blog!
Great read Dave, it’s interesting to muse, what these people are doing to afford to leave their 9-5. With 1/3 of the population with very little savings, how are they getting by until they start generating income in their own business? Maybe many of them have side hustles?
I think it’s complex. Many are being counted in the leaving group, but are surely getting another job. If that weren’t the case we’d see the unemployment number skyrocketing and its not. So a lot of this is probably folks jumping jobs to find the one they hate the least. But with the Ubers, Airbnbs, and dog walking apps out there I’m guessing side hustle income does play an important role as well. Thanks for the comment!
Gotta say, it feels less cool FIREing this year since so many are leaving too. Now that it’s mainstream I feel kinda lame. Mostly kidding, but when I left my employer didn’t even ask me why-there’d been so many that had quit in the past few years that I think they stopped caring.
On the plus side, I’m considering picking up some part time remote work, especially since my kids are in school and I’ve got large chunks of time to fill where I have to stay close to home. It’s nice to know that the world is opening up to such work so there should be plenty of opportunities.
When everyone’s doing it it’s no longer hip, haha. Goo luck with the remote work, I think things are changing but way slower than they should be
There’s a natural pushback against workplaces given that the cards are out on the table now: they don’t care about you as a person, they care about you as an employee. Gone are the days of pensions and retirement security at a single company. Nowadays, your “work family” lops off 10% of your family unannounced every couple of years. It’s great to see employees move up a knot in the endless game of tug-and-war that will continue on in perpetuity.
It is an endless game of tug and war, great way to describe it. And while we workers have the momentum we should get greedy and take what we can 🙂
I’m not FI yet (based on the budget I prefer & my dread/fear of being without a corporate medical plan in the US)… But my savings are such that I was able to quit last year and take a 9mo sabbatical before finding a different corporate job that’s 10% less pay but 40% less stress/annoyance. So I’m basically coasting and trying to pay more attention to my health; retraining my stress response to work related frustrations, etc.
One of the things I love about your blog is the clear eyed awareness that ignoring your health for the job is just slow death.
Wow congrats on the sabbatical and the new job with less stress, sounds like a win-win. AND THANKS so much for the kind words about my blog and message. I try to get that message across without being accusatory or preachy because I know that most people struggle with their weight and the numbers are only getting worse. I wish everyone could experience the transition I went through from an obese person to a fit person, it would motivate them a lot more. Thanks for your readership Wendy!
I know 3 people including myself that left Big Corporations for smaller independent work because of wokeism. We became tired of the endless video calls and conference calls and emails explain how racist we were or how our many years of hard work and success was only due to color of our skin. And I know many more that would be glad to leave if they only had the opportunity.
Being judged because of the color of your skin vice the content of your character is wrong 100% of the time, every time. Such a shame
I think this is temporary. Once the recession hits hard, most people will work in any job they can find. Just IMO, of course. But I could be wrong. The next generation of workers seem to be a lot more relaxed and they are not driven by the same things as the previous gens. We’ll see it works out in the next 10 years.
I tend to think you’re right Joe but we’ll see. And I agree that young’uns are definitely being driven by different values, sometimes those mean less consumer things but in other cases not so much.