By Charles Passy
Some data suggest workers are hunkering down and less likely to quit their jobs these days
The Great Resignation is coming to a close, as far as one prominent economist is concerned -- and "the Big Stay," as she dubs it, could be here to, well, stay.
Nela Richardson, chief economist at ADP (ADP), the payroll-service company, says that workers are increasingly sticking with their jobs (aka the Big Stay) in the current economic environment. And she cites a number of factors behind this transition from last year, when more than 50 million employees quit their positions (aka the Great Resignation).
Richardson's argument is rooted in some key U.S. government and ADP labor statistics. In a recent ADP Research Institute posting, for example, she pointed to the rate of job "quits" having fallen 5% in the first three months of 2023 versus the previous period -- and by an even greater percentage versus a year ago.
Richardson also told MarketWatch that the Great Resignation was clearly fueled by a period when many workers benefitted from the pandemic-related financial assistance provided to them by the government, and therefore could afford to leave their jobs altogether -- at least for a while. It "gave people a breather," she says.
In that sense, the movement wasn't even about job-switching but a true, if temporary, resignation from the workforce. But now, without that government aid, many people need to get back to work to support themselves.
"It wasn't 'the Great Resignation and never work again,'" Richardson says.
Richardson's view comes at a time when some might be feeling a little uneasy about the hiring picture in their field -- and therefore may be all the more inclined to stay put at their current jobs. The tech sector, in particular, has been affected by massive layoffs: A recent MarketWatch analysis showed that nearly 200,000 workers in the tech industry have lost their jobs since the start of 2023.
But Richardson's view is not shared by some other economists and experts who track the job market. They still see an environment -- perhaps even a permanent shift in the culture -- that has people leaving companies in a way that was unthinkable generations ago.
And some point to figures that suggest, at the very least, a job market that doesn't exactly encourage or reward loyalty.
John Leer, who leads global economic research for Morning Consult, a decision-intelligence company, cites one telling government statistic: Wage growth for "job switchers" currently stands at 6.9%, based on a three-month moving average. That's solidly ahead of wage growth for "job stayers," which registers at 5.7%.
Still, that 1.2% gap isn't as large as it once was: In July 2022, "switchers" saw wage growth of 8.5%, while "stayers" saw growth of 5.9% -- a gap of 2.6%. But the current gap is not insignificant, Leer says.
The bottom line? "It still pays for people to quit," Leer says.
Richard F. Moody, chief economist for Regions Financial Corporation (RF), also sees something of a generational shift at work. Decades ago, people believed in the idea of staying with a company for many years, if not their entire careers -- and companies often rewarded them for their loyalty. But the younger workers of today have become accustomed to quitting jobs -- and seeing they may even reap financial benefits by making such moves.
"So they may think that's the new normal," Moody says.
Aaron Terrazas, chief economist for Glassdoor, a web-based job-search and recruiting platform, argues that the reality probably sits somewhere in the middle. It's hard to ignore the drop in quitting that Richardson cites, he says, but it's also hard to ignore the fact many workers no longer see the value in staying put.
"We've had a generation who has come of age in a labor market where the returns for loyalty aren't there," he says.
Terrazas adds that the growing shift to remote work has also changed the picture -- meaning workers may have more opportunities that are not wedded to geography.
But Richardson sticks by her Big Stay theory, even as she acknowledges some shifts in the workforce culture of late. She says the Big Stay term itself is "definitely resonating with folks," noting none of her other ADP posts have gotten as much attention.
Of course, hardly a week goes by these days without some buzz phrase about the workplace, from "quiet quitting" to "bare-minimum Monday," making waves. But Richardson insists her aim was just to paint an accurate picture of the current job market.
"I wasn't trying to coin anything," she says.
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 21, 2023 11:37 ET (15:37 GMT)
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