Harnessing the Great Resignation Among Technology Workers for Public Benefit

POLICIES WITH POTENTIAL

By: Ashley E. Orr and Tamara Savage, Carnegie Mellon University

There Were Overall Higher Quit Rates and Job Opening Rates in 2021

The pandemic has changed how workers interact with their work and their employers. As labor demand surged in 2021, 47.8 million workers quit their jobs in what has now been termed the “Great Resignation,” and workers’ bargaining power increased. There are a multitude of reasons why so many workers quit their jobs in 2021, such as low pay, few benefits, desire for better work-life balance, lack of childcare, and lack of meaningful work. High proportions of workers quitting and vacancies open for long durations are costly for both the companies seeking new workers and the employees who remain on the job. Employers report increased costs of search, recruitment, and hiring of new workers. Employees who remained with their employers during this period report higher workloads and burnout as managers attempt to operate on lean teams. This creates a negative feedback loop, whereby open vacancies lead employers to overwork current employees, who become increasingly unsatisfied and burnout. Those employees are then more likely to consider quitting, lured by opportunities at other organizations — leaving the original firm with additional vacancies and the cycle continues. In this policy brief, we will examine workers in the technology sector, an industry with high turnover and many opportunities for remote work. To address this worker discontent, we advocate the U.S. adopt policies which allow workers to balance the demands of work and their personal lives, seek to equitably include and support a diverse workforce, and expand options for workers to engage in public sector work.

Figure 1: Monthly quit, turnover, hiring, and job opening (vacancy) rates between Jan. 2005 and Jan. 2022. Rates are calculated as the portion of total employment during that month; for instance, the quit rate reports the proportion of total employed workers who quit in the preceding month. (Data source: BLS Job Openings and Labor Turnover Survey (JOLTS), retrieved April 2022.)

Workers’ Concerns Are Spurring the Great Resignation

During 2021, more workers left their jobs than during an average year (47.8 million/year vs. an average of 32.6 million/year over the past 15 years). Figure 1 exhibits this increase in quits and job openings as a proportion of total employment in the U.S. Research indicates that both blue and white collar occupations saw higher turnover, with particularly high quit rates in retail and IT-related occupations. In IT-related occupations, survey evidence found 72% of workers were considering quitting their jobs, while 31% were actively seeking a new position.

During the pandemic, technology-related workers reported increased expectations to meet increased customer demand, leading to overwork, working nights and weekends, and burnout. Survey evidence suggests that workers’ concerns driving discontent and resignation ranged from perceived job insecurity, relentless requests for innovation and overwork, lack of pay and schedule flexibility, and company cultures that do not promote their wellbeing. Previous research has shown that workers prioritize workplace flexibility and are even willing to forgo wages to avoid costly commutes. Policy has the greatest potential to intervene and address worker discontent via expansions of pay, flexibility, and benefits. If firms fail to foster employees’ work-life balance and do not offer sufficient benefits to both new and existing workers, they may continue to experience high turnover and rising costs of filling vacancies.

Now is the time for action as workers have more bargaining power, wages are beginning to rise, and there is greater societal concern about diversity, equity, and inclusion. Many open positions in technology-related occupations have historically resulted in higher salaries for these highly skilled knowledge workers; however, relentless overwork and a lack of career progression threaten firms’ ability to retain the talent they have. Across industries, some workers have seen increased wages, yet those benefits have been unevenly distributed. The pandemic period exposed many social inequities; paramount among these are the need for workplaces to hire and support a diverse workforce, concerns which are particularly acute in STEM-related occupations. Women and people of color are underrepresented in the STEM workforce and make less than their male colleagues. Diversity, equity, and inclusion policies contribute to company culture and labor policy must seek to expand access to work for historically disadvantaged groups and ensure newly included workers are provided equitable pay and benefits.

The Great Resignation presents an opportunity to provide meaningful public sector work options for technology workers. During the pandemic, employees’ tolerance for being mistreated and overworked has decreased, and their desire for meaningful work has increased. The psychological concept of “moral injury” refers to witnessing or participating in behaviors that contradict one’s moral beliefs or that have the potential to harm others. Moral injury can happen in the workplace when employees are asked to cut corners or are mistreated. The federal government has tried to capitalize on discontent among technology workers by offering them similar occupations, such as software engineers and cybersecurity analysts, but with the added benefit of doing meaningful work.

What Can We Do? Policy Recommendations

We recommend the following policies to equitably address worker discontent:

• Expand opportunities for remote work: Companies can be incentivized with tax credits, such as those for hiring workers with disabilities and other employees who will benefit the most from remote jobs, such as working mothers and caregivers. Employee hiring incentives, such as the Work Opportunity Tax Credit, have been shown to increase employment among the target group.
• Provide certainty about work schedules, protect scheduling flexibility, and offer a uniform paid family medical leave policy: Providing workers with greater certainty about their schedules will address unstable scheduling practices and unfair availability requirements, while protecting workers who request schedule changes and providing for workers who take temporary leave for family or medical reasons. Precarious scheduling demands are disproportionately placed on workers who are young, Black, and without a college degree and lead to higher worker turnover, economic insecurity, and intergenerational costs among workers' children, whereas paid leave leads to increased labor force attachment.
• Increase transparency in hiring policies: Ensuring that applicants know what salary is being offered for each position can increase gender and racial pay equity. Example legislation includes a mandate that employers must disclose the salary range in all job postings and banning asking applicants for their previous salary.
• Recruit technology workers into government jobs: Providing workers with a public sector alternative to their current employment can address their need for meaningful work, such as improving online government services and bolstering national security. Pathways for technology workers into government service include the Tech Talent Project and the Presidential Innovation Fellows program; hiring efforts are currently underway at the U.S. Digital Service, the Consumer Financial Protection Bureau, and the Department of Homeland Security. The government can work to decrease hiring timelines and provide similar amenities, such as remote work and higher pay, to better compete with private industry.

About the Authors

Ashley E. Orr is a PhD Student and National Science Foundation Graduate Research Fellowship Program Fellow at Carnegie Mellon University’s Heinz College. Ashley researches at the intersection of labor economics, urban economics, and public policy. Her research has studied remote and hybrid work modalities, worker migration, human capital investment, and the determinants of labor supply and demand. A first-generation college graduate, Ashley earned a Master of Philosophy in Economics from the University of Oxford, England, where she studied funded by the Rhodes Scholarship. She also holds a BS in Mathematics and BA in Economics from Youngstown State University.

Tamara Savage is a PhD Candidate in the Department of Engineering and Public Policy at Carnegie Mellon University. Her work is at the intersection of emerging technologies and public policy, and her dissertation research is focused on improving technology forecasting by including policy, economic, and social factors in forecasts. Tamara has previously worked for the federal government and in the technology industry. She holds a BS in Engineering and Literature from Harvey Mudd College.

Acknowledgements

This material is based upon work supported by the National Science Foundation Graduate Research Fellowship Program under Grant No. DGE1745016.

Disclaimer

Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation.