Yes, Virginia, there really is a “Great Resignation.” And its effects are being felt across the Commonwealth. Nationwide, more than 47 million people quit their jobs in 2021 — an annual record. And an additional 4.5 million employees quit their jobs in April 2022. Nationally, the unemployment rate was 3.6 percent in April, but the total number of job openings in the U.S. still exceeded 11 million. Hence, many of these individuals are not leaving the workforce; they are taking jobs elsewhere for better pay or other more desirable conditions. Although Virginia’s minimum wage increased to $11 per hour in 2022, because of today’s labor market, the “real” minimum wage established by supply and demand is between $15 and $18 per hour.
According to the Virginia Employment Commission, Hampton Roads has the second-highest unemployment rate in the Commonwealth. The shortage of workers prompted the Hampton Roads Workforce Council and other organizations to join together to host a “Hampton Roads Regional” Job Fair in April. More than 100 employers participated. Many smaller job fairs are also scheduled by a variety of organizations.
Why is this “great resignation” occurring and what can employers do to obtain and keep the help they need?
The causes of this situation are not fully known and are not the same for all employers, but several factors are seen as contributing. First, the pandemic gave many individuals the opportunity to work from home — and they liked it.
Second, pay has failed to keep pace with the recent uptick in inflation, and workers see an opportunity for higher wages by switching employers or entering new lines of work.
Third, because of the lack of childcare (or the ability to pay for it) and problems experienced in the school systems, many workers, especially those in two-income families, have decided to stay home and raise their children.
Because the reasons for the great resignation are variable, no single answer is going to effectively address the trend. To attract and retain employees, employers are going to have to be more flexible and more agile in this labor market. Several options are likely to be helpful, but each business is going to have to determine for itself which action or combination of actions is best for the type of employees they need and their operating budget. Here are some of the more common actions being taken by innovative employers:
- Simplifying the hiring process
- Enhancing the company’s online presence
- Setting up an employee referral bonus plan
- Offering signing bonuses
- Providing relocation bonuses
- Granting retention bonuses to key employees
- Establishing above-market salaries and pay increases
- Offering flexible work schedules
- Providing childcare subsidies
- Setting up a college loan pay-off program
- Providing enhanced developmental opportunities
- Proposing a four-day work week
- Identifying work-from-home options
- Creating part-time work opportunities
In other words, employers are going to have to be innovative and willing to try new approaches to meet their needs. In today’s tight labor market, qualified job seekers have the ability to pick and choose where they want to go. Employers who can’t or won’t adapt will be faced with continuing production or service issues, or worse — business closure.