What Does the Great Resignation Mean for Small Business?

As America began to emerge from the Covid-19 lockdown in the spring of 2021, the economy predictably started to rebound as small businesses reopened and repositioned themselves in the marketplace. The pandemic crushed many struggling businesses and left multitudes of workers unemployed in its wake.

One thing that was not fully expected, was the phenomenon now known as The Great Resignation, or the Great Reshuffle. The lockdown forced millions of people into hibernation while businesses scrambled to retool their process flows to accommodate remote commerce. Many analysts predicted that the work force would happily return to their previous positions and that the economy would slowly, but steadily return to normal.

Instead, the job market tightened as demand for workers grew within the labor market. Job openings and resignations swelled to historic highs, and layoff rates fell to record lows. Wages grew at a fast clip as businesses competed for talent.

As the Great Resignation continues in 2022, it has become apparent that the Covid lockdown created its own dynamic within the U.S. labor market. Data suggests that most people are not quitting simply to remain idle. Research suggests that the majority of those who have left their jobs have done so for three reasons; 1) low pay 2) low chance for promotion, 3) disrespect related to the job.

During this time, people have had the chance to evaluate their career paths and they are interested in making changes that can positively impact their future. As they go forward, they do not want to find themselves in a similar circumstance. They need to make more money, they need jobs that have a long-term future and growth, and they want to work in a friendly environment that they can enjoy.

Underneath these 3 factors, are other drivers that every small business owner should keep in mind.

Roughly half of those polled say that childcare issues were a major catalyst behind their decisions to quit their jobs. The pandemic grounded not only working adults, but their children. Schools and daycare facilities were closed, and the families adopted a new rhythm to their daily lives. If returning to the job means more trauma to disrupt those patterns or if the pay rate does not cover the cost of child care, it might not be worth returning to their prior job.

Some have quit their jobs to pursue further education and ultimately would like to find employers who offer tuition reimbursement. Still others have opted to pursue jobs that offer better health and life insurance, or other benefits that make their overall salary more valuable.

Some have chosen this time to retire, while others have decided that now is a good time to start a family or to travel. Work/Life Balance is high on the list of many who have taken the opportunity to change careers. What is ironic is that only about a third of those who have resigned, relate their decision to Covid-19 vaccine or masking mandate issues.

Small business owners would be wise to consider these and other factors as they search for the optimal workforce in the coming days.