The Labor Department's latest jobs report might be an indication
Perhaps the Great Resignation will be confined to 2021.
The Labor Department has reported that 4.25 million Americans quit their jobs in January, down 3.4% from December and the lowest amount since October. That’s encouraging news for employers who have been struggling with retention over the past year.
On the other hand, job openings outnumbered available workers by nearly 5 million in January, and total vacancies dipped to 11.3 million, according to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS). This followed an upwardly revised 11.4 million openings in December, which marked a data record going back to 2001, Yahoo! reported.
January marked eight consecutive months of job openings in the United States totaling more than 10 million. Compare that to pre-pandemic, when job openings hovered around 7 million per month in 2019, and you’ll see the country still has a long way to go in terms of rebounding from COVID-19.
In his semiannual economic update before Congress last week, Federal Reserve Chair Jerome Powell said the labor market was "extremely tight" right now. “Employers are having difficulties filling job openings, an unprecedented number of workers are quitting to take new jobs, and wages are rising at their fastest pace in many years,” Powell said.
Accommodation and food services saw the largest decrease in job openings in January, as vacancies fell by 288,000 to reach just under 1.5 million. Transportation, warehousing and utilities saw openings drop by more than 130,000. Conversely, durable goods manufacturing saw job openings increase by 85,000.
The streak of historic job openings is a direct result of the pandemic, which forced people to re-evaluate their priorities in life. That’s why employees are seeking greener pastures, demanding higher salaries, better working conditions, greater work/life balance and more opportunities to advance their careers. To combat the nationwide staffing shortage and compete for talent, employers are having to increase their compensation and benefits packages beyond the traditional healthcare, dental, vision and 401(k) offers.
For example, Goldman Sachs, JPMorgan and Citi paid nearly $11 billion in combined additional compensation last year to retain staff, the Wall Street Journal reported. Meanwhile, Amazon, Ollie's Bargain Outlet, Sheetz and other brands offered signing bonuses to recruits. Little Caesars went one step further by giving new hires in the Detroit area a pair of club, suite or lower bowl tickets to any sporting or entertainment event at Little Caesars Arena or Comerica Park.
Bank of America announced in January that it is giving its workers $1 billion worth of restricted stock – even lower-level employees will benefit from the reward. Last year, Bank of America also announced it was rewarding 97% of its global workforce with either a cash incentive or a stock grant in recognition of their efforts during the COVID-19 pandemic.
Conversely, Goldman Sachs is hoping to discourage top bankers from leaving – by taking back their bonuses. The New York City-based bank is looking to retake vested stock from executives Omer Ismail and David Stark, who left Goldman Sachs last year for companies that would be considered clients, reported Bloomberg. The company is also pulling unvested compensation from the two, according to the report.