Hiring is rising, the unemployment rate is ticking down, and more people than ever are quitting their jobs.
The surge in turnover is the latest sign of a recovering economy. It reflects growing optimism and confidence among workers, both about career prospects and the pandemic.
Nearly 4 million people in the U.S. voluntarily quit their jobs in April, the highest monthly number ever reported by the U.S. Bureau of Labor Statistics. It’s half a million higher than just before the pandemic, when unemployment was near record lows and the job market was booming.
The latest count is nearly twice as high as it was in April 2020, after the economy was locked down and layoffs soared in reaction to the coronavirus.
It’s not just the number of people quitting that was exceptional. It’s also the share of workers choosing to do so. In the U.S., 2.7% of employees quit in April, the highest share recorded.
Comparable data isn’t available for Texas and the Dallas metro. But for the South, the region that includes Texas, the April rate also set a record high: 3.1%, the equivalent of 1.63 million workers.
“We use the term ‘healthy turnover’ to describe those high quit numbers,” said Anthony Klotz, associate professor of management at Texas A&M University. “Part of this is a return to normal churn. Over the past 15 months, people have had a lot of time to plot out their moves. With the economy improving, plus vaccinations, they feel confident enough to enact the plans they’ve been making.”
Klotz warned of this in early May. “The great resignation is coming,” he told Bloomberg Businessweek, and his prediction was confirmed by labor turnover data released this month by the Bureau of Labor Statistics.
Others revised the notion slightly, calling it “the great reshuffling” or “the great re-sorting.” Klotz likes those descriptions because the changes aren’t just among workers. Employers are adjusting, both to hold on to staff and upgrade talent, and that will lead to even more quitting and hiring.
“We’re entering into a period where resignations will continue to stay high,” Klotz said.
Nebraska Furniture Mart, which operates a giant retail center in North Texas, is trying to slow the outflow and attract new candidates. Its turnover, which is lower than industry norms, has increased to about 30%, up by roughly a third, said Megan Berry Barlow, human resources director.
The company has responded in several ways, she said. It boosted hourly pay for warehouse workers to $18 to $23, and talked about additional raises of 7% annually.
“Turnover has definitely gone up, so we’re hoping this big pay raise will help control that,” Barlow said.
Many workers got pay raises in January, generally 5% to 7%, she said. And the company created several workplace options for others, depending on whether they have to be onsite to do their jobs.
For those who can work remotely, Nebraska Furniture Mart offers a flexible work arrangement ranging from a few days in the office to none. It added training to help managers lead remote workforces. And if a salesperson or cashier wants to wear a mask to work because of health concerns, that’s fine, too.
“We had to change — not just policies but how we deal with people,” Barlow said. “The world is a different place now.”
She applauded employees for stepping up during the pandemic, including those whose contributions came from working at home. She wouldn’t consider ending remote work now, she said, “and pulling the rug out from under people.”
“That’s not the type of employer brand we want,” Barlow said “We value the people here, and they proved to us that it could work.”
Historically, turnover is high in retail, and 4.3% of those employees nationwide quit their jobs in April. The share was higher, 5.6%, in accommodations and food services.
Even professional and business services, a giant segment that includes administrative assistants, lawyers and accountants, had a turnover rate of 3.3%, higher than the average for all industries. In April, over 700,000 people nationwide quit their jobs in professional and business services, and that’s one of the largest job sectors in Dallas.
“That sounds like a terrible number, but the labor market has been so tight,” said Jay Denton, chief analyst at ThinkWhy, a Dallas-based software services company whose products compare talent and salaries in the U.S. “A lot of it is pent-up demand, people who would have left their jobs but didn’t want to take the chance during a pandemic, even for a promotion.
“This [turnover] should loosen up the labor market, and that’s a good thing,” he said.
A quarter of workers are looking to make a change, according to a recent Prudential Pulse of the American Worker Survey. Those workers said they wanted more pay, more work-life balance and opportunities to grow and learn.
They also want to keep working from home. In a March survey, 42% of remote workers said they would look for another job if their current employer won’t offer a remote option for the long term.
“That’s probably an extra benefit they’ll be able to get, given the dynamics of the market,” Denton said.
When ThinkWhy posts a job opening or hires a recruiter, it has to specify that it’s for a job in the office. The assumption is that a software services company will allow full-time remote work, he said, but ThinkWhy doesn’t want to go that way.
It lets workers stay home on Fridays. The rest of the week, everyone comes into the office.
“For us, it’s really about culture and collaboration, and when we’re building products, it’s much easier to be together,” Denton said.
