Unemployment may be higher, but employees are still leaving their jobs at record rates. Here’s why.
2020 caused countless headaches for business leaders in virtually every industry, but there was a silver lining: the skyrocketing unemployment rate meant the job market would become less competitive. Or so everyone thought. Prior to 2020, employers had been dealing with record-low unemployment rates, and as a result, high turnover. Cue the pandemic shutdown. Layoffs quickly mounted and the unemployment rate shot upwards. Typically, high unemployment rates coincide with an employer-driven job market, meaning lower turnover rates as employees cling to their current job and fight not to be laid off — but that’s not what happened in 2020.
Turnover Rates Have Increased Over the Past Five Years
Annual total separations rates by industry and region, not seasonally adjusted
Source: Bureau of Labor Statistics
The total employee separation rate for the manufacturing industry has been trending upwards in the United States for the past five years, according to the BLS. Employee separation swung from 25.6% in 2015 to 31.3% in 2019. If you’ve dealt with talent acquisition during the past five years, and turnover felt like it was only getting worse, it wasn’t just you.
Hires and total seperations rates. seasonally adjusted, november 2017 – november 2020
Source: Bureau of Labor Statistics
Hires
Seperations
Turnover increased for the manufacturing industry in 2020
Job openings, hires, and total seperations by industry, seasonally adjusted
Source: Bureau of Labor Statistics
Job openings
Total seperations
High turnover isn’t just a general trend. The manufacturing industry, specifically, experienced higher separation rates in November of 2020 in comparison to November 2019. Both job openings and total separations increased from 2019 to 2020. If your company is in manufacturing or manufacturing-adjacent industries, statistically, you can expect continued high turnover rates in 2021.
Most Turnover Is Voluntary
The turnover rate encompasses workers who have been laid off and fired (involuntary separation) and workers who quit a job of their own volition (voluntary separation). For the past decade, workers are increasingly choosing to leave positions they don’t like.
As employers try to deal with increasing turnover, it’s important to increasingly consider the needs of workers in retention strategies. Voluntary turnover was rapidly escalating prior to 2020, and the escalation shows no signs of stopping moving forward. By 2020, the Work Institute predicted the number of workers voluntarily quitting would jump to 47 million, or roughly 1 in 3 workers. With the high turnover trend predicted to continue, employers must strategize for a new normal.
U.S. Total Employee turnover
Source: Work Institute, 202 Retention Report
Total Seperations
Layoffs/Discharges
Voluntary Terms
We are Living Through a Period of Extreme Disruption – To Some Extent, Turnover is Unavoidable
Employee turnover rates have been increasing during the past five years, and based on 2020 data, high turnover rates aren’t going anywhere anytime soon in the manufacturing industry. Job openings, hires and separations remained high in 2020 and will likely continue to be high in 2021. Still, the question remains: Why is turnover so high, and why does the job market continue to be so unstable?
There isn’t a singular answer, but one big trend is playing a huge role in the job market: COVID-19 created mass changes (and therefore chaos) in the lives of all Americans. When people are dealing with big personal disruptions, those personal issues begin to affect the workplace, especially for blue-collar workers.
To some extent, issues (like a lack of childcare during a COVID-19 outbreak) are mitigated for white-collar workers who can oftentimes work from home for a period of time. But for blue-collar workers whose jobs require a physical presence and therefore have less flexibility — the impact is more pronounced.
When employees don’t have the flexibility to deal with these prolonged issues, they will leave voluntarily or “point out.”
Factors
Childcare Issues
This includes daycare staffing issues, daycare illness outbreaks, closed schools, school outbreaks, required online school days, additional precautions required if a child shows any symptoms of illness, illness of a babysitter, etc. All these factors result in parents having to take more time off or quit their jobs to care for children.
Family Obligations
Sick family members (especially older family) may require additional care in the wake of COVID-19. This additional, and often unexpected, burden can have a big impact on workers.
Work-from-home options are more common and more attractive
Low-skill, white-collar jobs that offer work-from-home options (data entry and call center positions, for example) are increasingly available and attractive to blue-collar workers who feel burned out and want more flexibility in their work.
Long COVID-19 recovery time
Some people take an extended time to recover from COVID-19. According to a study published by the CDC, 35% of COVID-positive respondents were still experiencing prolonged illness after a two-week period, including 26% among those aged 18–34 years; 32% among those aged 35–49 years; and 47% among those aged ≥50 years. Among respondents reporting cough, fatigue, or shortness of breath at the time of testing, 43%, 35%, and 29%, respectively, continued to experience these symptoms at the time of the interview. Workers experiencing prolonged symptoms after they’ve returned to work from their quarantine period may take off additional days or leave their job completely until they feel better. Some of these workers will seek less physically demanding jobs.
Workers are increasingly leaving the full-time workforce
One in four women are considering leaving the workforce or downsizing their careers in the wake of COVID-19, according to a McKinsey & Company survey. Burnout was cited as a major reason for women’s decisions.
Health fears
News of a plant outbreak may make workers more inclined to call off work or start looking for another job that offers work-from-home options.
Competitive unemployment compensation
Competitive and extended unemployment compensation has made the job market even more challenging for employers. To attract workers, employers must provide job opportunities that are significantly better than unemployment benefits.
Conclusion
With high national hire and separation rates for the manufacturing industry, the five-year trend of high turnover is most likely here to stay for 2021. At the end of the day, the United States and its workforce are undergoing a period of disruption. Blue-collar, manual labor jobs will be deeply impacted because it provides workers with less personal flexibility.
Here are some solutions
Strong benefits – including affordable health care – have never been more important
In the wake of a pandemic, workers desire healthcare that won’t break their bank accounts. These benefits will also help boost your company’s profile if you don’t offer top wages for your local market.
Community partnerships are a great resource for future talent
If you are struggling to find talent, schools, community groups and staffing agencies who facilitate these partnerships can help your company build the sustainable workforce of your future.
Flexible options may help workers
Manufacturing and light industrial work don’t easily lend themselves to flexible job arrangements, but considering options that will help workers balance their work and personal lives without penalty will help reduce some turnover and prevent employee burnout.
Consider smart staffing partnerships
With high turnover that is often paired with high absenteeism, boosting your team’s contingent worker presence can help your company maintain production schedules and levels