As the labor market recovers, there continue to be many jobs to be filled. We’ve hit another record of 9.3 million job openings in April, with a persisting challenge to find workers. However, the more important immediate priority for human resources professionals could be internal – preventing workers from leaving. If April’s quits level is any indicator, this is exactly the task. A record 4.0 million people left jobs in April.
Layoffs continued to fall as businesses struggle to fill open positions and face the challenge of keeping employees. Simply put, hiring is not keeping pace with job openings.
What’s the Story on Future Hiring?
The meaning of a record number of quits can easily be misinterpreted. A record number of quits could be a good thing for the overall economy and especial for talent acquisitions professionals, even though it can make life challenging for managers. It can be a signal that the pent-up supply of talent is finally starting to have the confidence in the market to leave a position for something better as the impact of the pandemic subsides.
So where did those quitters go? Based on overall figures for job openings, hiring, quits and layoffs, the most likely case is that they have transferred to other jobs versus leaving the workforce.
How big is the future hiring challenge? Recruiters and talent acquisition must find a way to attract 3.2 million more workers to fill the growing jobs gap.
Talent Shortage Impact on Industries
Manufacturing Already plagued by the well documented challenge of material shortages, manufacturing has also seen record quits. Workers have been able to tap into different jobs with other businesses eager, if not frantic, to fill spots. Even with minimal layoffs, soaring job openings and fewer hires are causing stalled production and unmet quotas.
Healthcare As the post-pandemic’s impact shifts demand from hospital COVID care and as people become more comfortable returning to their doctors for everyday care and elective procedures, quits numbers indicate that some trained medical staff may be stepping away from front-line work and into day-to-day operations at a primary care or outpatient center. Job openings are still near all-time highs, even after coming down slightly from March.
Transportation, warehousing and utilities Having fared well for most of 2020 when hires were on pace with job openings, there is mounting pressure to find new workers to keep up as customer demand remains strong. The quits also jumped up in April, making matters worse for short-staffed teams.
Several factors are at play when we look at what is causing the labor shortages and influencing employee quits behavior. Key influences attracting workers away from current roles include higher wages, followed by more sought-after schedule arrangements and sign-on incentives.
After a year of pandemic-induced hard knocks, the increased wages intended to entice workers back from the sidelines appear to be encouraging job hopping as much or more than the intended outcome of bringing back all previous employees from the sidelines.
Labor Force Outlook
ThinkWhy’s talent intelligence software, LaborIQ®, projects the U.S. will reach 73 million hires for 2021. This will be from a combination of filling current job openings, refilling roles as people leave their current jobs and adding new jobs. This volume may not be reached until some employment conditions change and consumer and worker habits return to pre-pandemic patterns. We will likely see people begin to rejoin the labor force in larger numbers in late summer and fall. Until then, more people will need to return to work for hiring momentum to ignite the job gain many expected in the second quarter of 2021.
LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.