Will Workers Continue to Leave Their Jobs in Record Numbers?

​Editor's Update: 4.2 million people quit their jobs in October and 4.5 million people quit their jobs in November, according to the Department of Labor.

Labor market watchers are wondering if the latest data illustrating how much of the U.S. workforce quit their jobs will continue its record-breaking streak.

The U.S. Labor Department's Job Openings and Labor Turnover Survey report, to be released tomorrow, will likely show that the Great Resignation is continuing unabated.

A record 4.4 million workers—about 3 percent of the workforce—quit their jobs in September, the last month recorded. Tomorrow's report will cover the month of October.  

The previous record was set in August, when 4.3 million people quit their jobs. Quits in both June and July hovered around 4 million. In February 2020, before most of the pandemic-related turmoil began, 3.5 million workers quit their jobs.

About 20 million workers left their jobs between May and September this year—50 percent more than in the same period last year, when employees were still hunkering down in the first wave of the COVID-19 pandemic. This summer's total is also 15 percent above the same period in 2019, amid the hottest job market in decades.

While U.S. workers are quitting in droves, employers are reporting record-high job openings—10.4 million in September—creating a scenario in which strained industries are competing for talent and driving up compensation.

While the rise of quitting across the labor market "is remarkable … the concentration among a few sectors is eye-popping," said Nick Bunker, an economist at the Indeed Hiring Lab in Washington, D.C. "Quits are up the most in sectors where most work is in person or relatively low paying."

About 6.6 percent of workers in accommodation and food services quit their jobs in September, the highest rate of any sector. Health care, leisure and hospitality, professional and business services, and retail round out the industries with the highest percentages of workers quitting.

Quits have also increased in education, with many teachers resigning or retiring early due to the pandemic.

Bunker noted that quits are up 78 percent in manufacturing from February 2020 and up 43 percent in leisure and hospitality. "Meanwhile, the number of quits in the financial activities sector is only up 5 percent over that same time period."

Nela Richardson, chief economist at ADP, described the trend in quits by sector not as a sea change, but as "an amplification of quits where there were already high quits rates before the pandemic."

She added that in most industries where it's easier to find remote work and pay tends to be higher, quits are near their previous levels.

"But for low-paying, low-skilled jobs with a lot of customer interaction, quits are higher. I expect that trend to continue," Richardson said.

Reasons for Quitting

Many factors have led to the historic churn. First, the September data was collected when COVID-19 cases were spiking, fueling safety and child care concerns for many employees.

"People are still worried about COVID," said Richard Wahlquist, president and CEO of the American Staffing Association in Alexandria, Va. "There are those who are hesitant to return to a workplace that is not 100 percent vaccinated. And we're hearing reports of 30 percent to 40 percent unvaccinated in some sectors. These concerns are amplified going into the holiday season."

In addition, child care is still not at pre-pandemic capacity, putting more pressure on working parents, Wahlquist said.  

According to a September survey from employment marketplace ZipRecruiter, 55 percent of job seekers said they are trying to get a job that will allow them to work from home, citing workplace safety or child care/family care needs as driving their decisions.

Wahlquist noted that vaccine hesitancy may also be adding to the high quits numbers. People who don't want to receive the vaccine are being confronted with vaccine mandates and may be quitting, and if that's so, quits are likely to remain at sustained levels as more workers are required to be vaccinated, he said.

Experts also believe that workers are switching jobs to take advantage of the strong candidate's market and seek out better pay and benefits from employers desperate to fill job openings.  

"Employers are pulling out all of the stops and using all tools in their toolkit to try to get talent to notice them, including dropping hiring requirements, speeding up the process, and offering signing bonuses and other incentives," Wahlquist said.  

People who change jobs generally see faster wage growth than those who remain with their employers.

"More opportunities are out there, especially for lower-wage workers," Richardson said. "If there is little investment in workers, meaning low pay and not a lot of career development, it is easy to walk across the street and get another job. This is a moment where employers will have to rethink what loyalty means and how to retain workers beyond merely a paycheck."

She added that a rise in home equity and a strong stock market are helping pad some workers' finances, making it easier for them to move on or even retire.

"Before the pandemic, a large wave of Baby Boomers was getting set to retire," she said. "Some who may have retired in a year or two have decided to retire early."  

Then there are the 62 percent of job seekers from the ZipRecruiter survey who say they are looking to change their type of job or switch careers entirely.

"Workers during this pandemic have been introspective about where they are in their lives and have used that time to consider career options," Wahlquist said.

He added that many in the professional services sector who have been allowed to work remotely do not want to return to the office and are seeking more-flexible jobs, whereas those in logistics, health care and hospitality have been burned out working longer hours over the last 20 months and are rethinking what they want to do. Workers across industries are interested in more flexibility and investment in their professional development and career growth, Wahlquist said.

Finally, the pent-up demand for voluntary turnover during the crisis months of 2020 is likely fueling quits this year.

"There was a very low number of quits in 2020," Richardson said. "Part of what we're seeing this year is a delayed reaction—people who would have quit last year stayed in place to see what was going to happen."

The Geography of the Great Resignation

Turnover has not been distributed evenly across the country. The South, the West and the Midwest have the highest percentage of workers quitting their jobs, at 3 percent or higher, while 2.2 percent of workers in the Northeast have quit.

In September, quits rates increased in 15 states and decreased in 10. Eighteen states broke or tied their records for overall number of people quitting.

The largest state increases in quits rates occurred in the West—Hawaii, Montana, Nevada, Oregon and Utah. The overall number of quits increased in 13 states, led by states with large populations like California (443,000 quits) and Texas (439,000 quits).

Industries such as hospitality and recreation that currently have high turnover rates are pushing quits up in the West, while the increase in quits in the Northeast this year is likely due to employers reopening from restrictive lockdowns as well as the region's higher vaccination rate, leading to more people being willing to explore new opportunities. Job openings have also increased at the fastest rate in the Northeast this year.

Quits surged in Hawaii and Montana this year, two states dependent on tourism and recreation.

"With 7.1 percent of the workforce quitting their jobs in one month, Hawaii is leading the way in the Great Resignation," said ZipRecruiter lead economist Sinem Buber. "The state's quits rate is more than double the current national rate of 3 percent, which is a record high. It is the highest rate seen in any state on record."

Buber attributed this rise in quits to the earlier loss of tourism jobs and the state's large share of employment in leisure and hospitality. "Those industries are now rapidly restaffing, creating opportunity both for unemployed people and for currently employed job seekers," she said.

As for Montana, the abundance of opportunities available in the state is encouraging people to leave their jobs for better ones, Buber said. "Montana has more than two job openings per unemployed person, putting substantial bargaining power in job seekers' hands."

Buber said that hires are also dramatically lagging behind job openings in the Northeast, where high employment costs and a higher share of workers in white-collar jobs often lead to slow hiring processes.

Parting Thought

Richardson said that while quits are important to track, she's more concerned about continuously low labor force participation and elevated long-term unemployment.

"Quits represent a lot of things, but one of those things is other opportunities," she said. "People who quit tend to have options. But the long-term unemployed and those who are not even in the labor force are more concerning because it means that those people increasingly don't have an option and are struggling. We all know that companies tend to hire people who already have jobs."