A Never-Ending Job Quits To Cope with the High Cost of Living Crisis after COVID-19
Post-pandemic lifestyle brings a huge number of job quits due to the cost of living crisis, changing the economy as a whole.
The post-pandemic imprinted a long-lasting impact on employment opportunities and job quits. After COVID-19 hit the world, there was an immense increase in the number of job layoffs, with a growing trend of working from home. The pandemic has shown a vast impact on the economy, leading to an unprecedented cost-of-living crisis in many regions. Post-pandemic life also costs us drastic economic change with an increased number of job quits due to crises related to the cost of living.
There was a huge rise in prices unlike an increase in salaries and employees started feeling financial stress. Due to this pressure, low-income workforce choose to stay in underpaying employment, while may prefer to quit it for good. The whole world suffered from an economic storm after inflation and interest rates soared into the sky.
After a pandemic allows us to breathe in fresh air, the economies start recovering and businesses reopen. But this time we saw a huge shift in the labor market trend and that was a higher number of job quits. This article aims to analyze the influence of the cost-of-living crisis on the surge in job quits during the post-pandemic period.
This detailed research provides us with useful insights after thoroughly examining those factors which are directly responsible for the rise in the cost of living, but also impacting the changed behavior of the labor force. This further navigates the challenges that arise with the cost-of-living crisis and its implications on the retention of the labor force in light of employer-employee dynamics.
Global Survival Challenge And Businesses Collapse:
The cost-of-living crisis has posed a thought-provoking concern among policymakers, businesses, and the common man worldwide.
So, which factors caused the pandemic to be constructed and impaired?
With the life-threatening virus COVID-19, the world faced an imbalance in supply chain movements, inflation hiked, and shifting in house markets increased. Thus, there was a global struggle to meet the basic needs.
Post-pandemic life forced us to bear higher expenses for basic necessities such as food, shelter, and health. This hike in prices makes people uncertain about their future. This uncertainty leads to an unexpected rise in the number of employees voluntarily leaving the organization and quitting their jobs. Many businesses were challenged to maintain a stable workforce after the work recovered from pandemic injuries.
Job Quitting is the result of the Cost-of-living Crisis:
Let’s go into further detail about how the two factors, the cost-of-living crisis and the rising trend of job quitting are linked with each other. To understand the influence of the cost-of-living crisis on job quits, there is a need to compare the surveys of recent years with the previous ones.
In June 2023, a survey was conducted by PricewaterhouseCoopers PwC, where 26% of the 53000 employees wished to quit their jobs. Most of this result is perceived to be driven by the cost of living crisis followed by financial stress. Around 47% of the UK employees said that they are left with nothing after the end. While 15% state that they have to struggle throughout the month to pay the bills.
According to Dana Peterson, Chief Economist & Center Leader of Economy, Strategy & Finance at The Conference Board, if we compare these stats to the past with similar conditions other than the pandemic, we see different results. Before COVID-19, whenever there was acute economic distress or financial stress, people usually stay put to any job they grab.
When the recession hit the US in 2008, only 2.6 million jobs lost or quit were recorded. This is a low rate of job leaving or termination. The reason for job quits back then was mostly the shrinking of the company and reduced vacancies, followed by layoffs. In the UK, there is currently a drop in vacancies but, still the number is better than the pre-pandemic times. On the other hand, the US recorded an immense increase in private sector jobs by 479,000 for the labor market.
Great Resignation and Quiet Quitting Trend:
The head of people and organization Sarah Moore at PwC UK, states that Great Resignation is about employees quitting their jobs to search for higher-paying jobs. This weird trend has been going on since COVID-19 and we may see the highest quit rates during these years in the hunt for a good salary to match their cost of living.
As per the survey program JOLTSP, conducted by the U.S Bureau of Labour Statistics, an unprecedented rise of quits is monitored from 2001 to 2021 by 2.4% to 2.8%. This ratio further increases to 3% after 2021.
Another study in China by McKinsey, a study was conducted on 6 countries with data of over 13000 employees. These countries include Australia, the UK, the U.S., Canada, India, and Singapore. According to this study, 21% of employees have quit their jobs in these 2 years, whereas 40% of employees from the same country are planning to quit soon. Out of 5, 2 employees sound certain about the future of job quitting in the coming six months.
Great Resignation is also known as Great Attrition and this trend includes three factors reshuffling, reinventing, or reassessing.
Reshuffling means employees who quit their jobs are moving towards high-paying sectors and shifting business industries. As a result of this cost-of-living crisis, many industries are losing talented employees and they cling towards hunting experienced individuals and retaining them.
Those who fall into Reinventing are quitting their conventional jobs and shifting towards non-traditional employment like part-time, work-from-home, or other temporary roles. However, a study revealed that out of these kinds of job quits, 47% of employees returned back to the office. Whereas, 27% choose to do the prior full-time job.
Coming on to the next trend Reassessing, which shows an increased number of job quits due to the higher cost of living. Most of them think of their families’ increased demand and future needs for a sustainable lifestyle. So they stepped out of the 9–5 job cycle and quit jobs for better opportunities.
Genuine Reason for Job Quits:
These reports have further elaborated the facts that an increase in Great Resignation is recorded during 2021. It was either due to an uncomfortable employee-employer relationship or an employee-employee relationship on the office premises. Moreover, the reason also covered unsatisfactory compensation packages, uncertainty of career advancements, and non-productive and meaningless work by managers.
Demographically, the job quits may vary depending upon the age factor and the goals of an individual. We have seen an increase in job shifts in older people aged 25–45 who prefer to do business, are self-employed, and need flexible hours to work. On the other hand, job quits at the age of 18–24 are recorded due to the urge to maintain a work-life balance, career goals, and a valued job.
While it’s hazy whether the worries workers raised were begun by the pandemic or were going on pre-pandemic. The Harvard Business Review noted that the same individuals who quit their positions during the pandemic may not face the economic, financial, and social uncertainty if they leave before the COVID-19 outbreak. However, there was a decline in the same uncertainty, when stimulus checks began. A huge increase in job quit was recorded followed by the pandemic.
It’s essential to take note that not every person who quits their job makes this decision by choice. Some of them are influenced by the absence of adaptability combined with low remuneration troubled specialists with kids, who were frequently incapable of managing the cost of the increasing expenses of youngster care, compelling them to be unemployed. As per the Harvard Business Review, this has affected women more than men. around 300,000 women quit their jobs by the end of 2021.
Implications and Recommendations:
Following the number of job quits and the cost of living crisis, many industries and businesses, policymakers, and individuals have tried different strategies. They have tested employee retention with increased remunerations, long-term benefits, and other perks to navigate the challenges posed by the cost-of-living crisis.
The insights gained will aid in crafting targeted strategies to retain skilled employees, support workforce well-being, and manage the impact of living expenses on job satisfaction. Moreover, the research may offer guidance on implementing policies that address the root causes of the cost-of-living crisis, such as affordable housing initiatives, wage adjustments, and financial literacy programs.
Recently the food industry like McDonald’s has increased the wages up to 10% and got a positive response with employee retention.
Moreover, Walmart has also started a program named Live Better U, to facilitate the students to pay their tuition fees in response to their working hours and successfully retained employees.
In light of these retention parameters for retaining employees, other challenges should be catered to, like the relationship of employees with managers and colleagues’ cooperation mechanism for a healthy workplace environment.
Conclusion:
If we look closely at job quits in comparison to the cost of living crisis, we will come to the point where the basic needs and demands of people are the same. Despite the differences in culture, jobs, workplaces, and countries, their global needs are perfectly aligned with each other. Moreover, it is important to provide the workers with a sense of achievement, regard, and collective appreciation to increase the chances of their high productivity and success.
Another Harvard Business Review states that if the four needs of employees such as physical, mental, emotional, and spiritual are fulfilled at a workplace, employees show higher productivity. This increase in employee productivity eventually positively brings high economic growth. Over the past 2 years, the pandemic combined with inflation, lack of employee engagement, and other social stresses resulted in a decline in economic growth.
As the post-pandemic world grapples with the cost-of-living crisis, understanding its influence on job quits is critical for building resilient economies and sustainable workforce environments. By analyzing the data and insights obtained through this study, business owners can make informed decisions to mitigate the challenges of the cost-of-living crisis and ensure a stable and thriving workforce in the long term.
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