'Great Rotation' responsible for increased labor turnover, experts say

article

(Photo: iStock)

HOUSTON - With labor turnover in various job markets remaining an ongoing issue, some experts suggest it's because more employees are gearing towards better opportunities.

Initially, economists were calling the labor shortage the "Great Resignation," or even the "Great Realization," as people seemed to realize they aren't happy where they are in their respective careers.

MORE: 'Great Resignation' spurs some to go into business for themselves

According to Nicholas Migliozzi, Area Vice President for human resources, staffing, and recruiting agency, Randstad USA, it's more like "the Great Rotation."

"So the ‘Great Resignation’ comes down to you know, record-breaking highs when it comes to, you know, people choosing to resign from work here at Randstand, we've been calling it more of like a ‘Great Rotation,’ because it's not like they're resigning, and technically going straight on to unemployment, or not working, but they're moving into a different role because of the options that they have."

In other words, rather than employees simply quitting jobs, or realizing they don't enjoy working with the company they are, instead, people are finding better opportunities within their career field and in essence, jumping ship.

The Breakdown: What were the factors playing in the Great Resignation?

Some call it the Great Resignation, others call it the Great Realization, but we have a quick breakdown on the ongoing trend of millions of Americans quitting their jobs every month.

Even Texas, based on a recent WalletHub report, still fares comparatively worse in its unemployment rates recovering. The unemployment rate in Texas, as of May 2021, in fact, actually increased but still is higher than the national rate.

"Our unemployment rate has actually increased to where we're at a rate of 5.5% compared to 4.6 nationally," Migliozzi said.

Part of this could be due to the after-effects of the coronavirus pandemic.

"The effects that we're seeing more comes down to more of like the employees' thought process, you have some people that still want to continue to work remote, you have some people that want to be in office and I think the biggest thing across the board is just the options that we're able to see from that aspect," Migliozzi explained. "So, with people being able to choose where they want, that kind of calls in some of this ‘Great rotation,’ ‘Great Resignation,’ whatever you'd like to call - because if people are unsatisfied with having to go into work, or getting used to managing their workload from home, then as employers need to figure out what makes sense."

The Great Resignation turning into The Great Regret

A new study finds a high number of people who left their job as part of the "Great Resignation" are now experiencing a lot of regrets. More than 70% of millennials and Gen Z-ers polled state they regret leaving their old job.

Pew Research also looked into the driving factors behind Americans leaving their jobs in 2021 and found that low-wage workers were most likely to have quit. As part of a staffing and recruiting agency, Migliozzi noted these are some main takeaways in conversations with employers.

"The biggest things that we're talking about comes down to salary, of course, you've seen quite an increase across the board when it comes to wage and compensation," he said. "And then also trying to talk through, you know, things that make sense from a hybrid structure. You know, giving them a little bit of, you know, what they want, if it is work from home, and if they want to be in the office from that aspect. So, we're trying to provide a lot of coaching around that. And then also kind of what the benefits packages look like."

MORE: Pew Research finds tie in reasons workers quit their jobs in 2021

Migliozzi argues it also has to do with employees looking to find a proper balance between work and personal lives.

"One statistic that kind of stuck out to me is like nearly three and five workers under the age of 35 which we're looking at 58% said that they would have accepted a job if they thought it would negatively affect their work-life balance," he explained. "So in other words, we're also seeing some of this work-life balance getting affected to why people are rotating into other jobs as they continue to join the workforce."

Great Resignation leads to shift shock for many

Many people are expressing remorse after getting new jobs during the Great Resignation. Kathryn Minshew is the founder and CEO of The Muse. She explains why a lot of employees are dealing with shift shock.

Though these conversations may often be difficult for employers to come to terms with, Migliozzi says ultimately it's about making workers feel comfortable, so they can be their most efficient.

"I think the hardest part is, you, if you're raising everybody's salary that's coming in, you've also got to go in, and you've got to look at equity races and everything in between for your current employees," he said. "So that cost itself is something that's, you know, really getting pushed back on us, but the cost of vacancy is just as expensive as continuing to raise the salaries from that aspect."

"I think there are also still some companies that believe, now that we're getting past the pandemic, to an extent, they feel like everybody should be coming into the office, and there are just some individuals that, you know, have gotten more comfortable at home and become very efficient with what they need to do from a work standpoint to where they feel as if they deserve that opportunity," Migliozzi continued. "In some circumstances, they definitely do."

Pay raise not keeping up with inflation? Here's how to negotiate

FOX 26 Consumer Reporter Heather Sullivan speaks with an expert on how to negotiate a higher salary when your pay raise falls short of inflation.

For this reason, Migliozzi offered advice to some employers to be flexible when necessary.

"I think an employer would be able to read and understand and if the leader of that company doesn't understand it, you're probably going to see more when it comes to this ‘Great Resignation’ or ‘Rotation’ because there are so many options and our clientele that has taken that feedback and have grown tremendously compared to other ones that have not," he said.

Simultaneously, it's vital for workers to be open and honest about what they need from their employers, within reason of course, so they can work their hardest.

"For them to be successful, they need to be able to trust their manager, and they need to be able to ask for what they need, within reason, because none of us can be successful when it comes to having faulty equipment, or not being able to make the right call or put together the right data if we don't have that," Migliozzi concluded. "At the end of the day, you know, we do have to ask, and I would challenge that employee to have that conversation; and I think it comes full circle to the companies that get it and understand it are the ones that you're continuing to see grow."

To learn more about Randstand USA, visit their website. You can also read more on the advice Randstand is sharing with employers/employees by clicking here.