Why Are People Quitting Their Jobs in Record Numbers?

The global labor shortage is impacting all industries and companies of all sizes. In this segment of Backstage Pass, recorded on Oct. 13, Fool contributors Brian Withers, Trevor Jennewine, and Rachel Warren discuss some of the factors behind the record resignations hitting the workforce right now.

Brian Withers: Let's move on to number -- the crazy job market, job openings are pulling back. Unemployment is going the right direction, which is nice. It's continuing to trend down. But more people than ever are quitting their jobs. I'm going to show you a chart because I think this is super interesting. The YCharts here we got something we can share.

This is job participation. Hang on. This is it. Total quits. If you look at the number of people that have quit every month, so this is a monthly number over the past year, it looks like it's going up and to the right, which is really interesting. Look at the three-year trend. It was hovering around 3.5 million and it certainly extended beyond that. You could make an argument that some of the people that were going to quit back here are really just quitting here. I don't know. Let's look at the 10-year trend.

The 10-year trend just looks like more people are quitting [laughs] than ever before. Certainly this number is certainly a 10-year maximum, and then if you look at it, even over as long as they've been tracking it is the highest that it's been since then. With everybody leaving their jobs, what are maybe a couple of things that you guys see from your research and stocks and the companies that you see could be driving this trend? Trevor, let's start with you.

Trevor Jennewine: I'm going to give a simple answer. I think it's convenience. I think you saw that big dip in quits during the pandemic. I think a lot of people during the pandemic got a taste for that remote work life, and I think the convenience that comes along with that. If you need to go to an appointment during the middle of the day, if you have something that you personally need to do in the middle of the day, it's typically very easy to rearrange your schedule.

Of course, there's Zoom (ZM) meetings and other things that are planned. But if you're able to work on your own schedule, I think there's a level of convenience there that you just don't have where you're working in an office from 8:00 to 5:00 or whatever it might be each day. I think the fact that there were a lot of business closures and then a lot of people were at least temporarily working remotely, I think that helped impress upon them how much they actually like that freedom.

I know that there are studies that go back and forth about whether or not people are more productive or less productive, or whether or not it makes a difference if you're working remotely. But I do believe that a lot of companies are shifting that direction. I think Rachel has some stats later about how prevalent remote work is right now. But just to cite something, Gartner earlier in the year said that they believe that at least 48% of workers will work remotely at least part-time in the future, and that's up from 30% prior to the pandemic.

Then individual components. Businesses are also moving to more remote channels like 25% of enterprise meetings are expected to take place in person by 2024, and that's down from 60% today. I think there are again, a lot of conveniences that come with being able to do your job remotely, and I don't think people want to give that up. If we're seeing more people being called back into the office, I think almost their values have changed in the past year, and they're prioritizing their work life, they're prioritizing more toward life now because they realize that they can work remotely, and if that option is on the table, then that's what they want to do. I think that is one driver behind the high level of quits. I think there are lots of other drivers. I'll turn it back over to you guys.

Rachel Warren: I agree that convenience or the lack thereof is definitely becoming more and more of an important point with employees. I've even heard from members of my own family how working at home, they feel so much more productive. They get so much more done in a day with fewer interruptions. You're thinking now with so many of these big corporations with big in-office meetings that would take so long, you see, now I can just follow that with a quick Zoom call.

Now that people had a taste of that due to working at home for long in the earlier days of the pandemic, I think that many workers aren't willing to maybe put up with the same things they were pre-pandemic. More companies are going remote or hybrid. The freelancing sector is booming. There are a lot of opportunities out there if you want to work remotely and a lot of people do. I think for some people, if maybe their company won't or can't go remote, they're looking at other options.

They want that convenience, the time to spend off the road that they can instead be at home or with their families. I think that it can lead to a better quality of life, which then can lend itself to more productivity when you're working. I think that those can be positive trends and that many people are looking at how they want work to fit into their life differently than they did pre-pandemic. I was curious in particular when I was thinking about this question of, what are some of the catalysts driving these trends? Something that I've heard a lot about in recent months, was that one of the big trends driving the ongoing labor shortage is the fact that women are leaving the workplace.

Not necessarily out of a desire to do so, but in many cases out of necessity, whether due to child care shortages or other reasons. But I did a little research into this, and I found a report that came out in September released by McKinsey & Company. It was entitled: "Women in the Workplace 2021." I believe it was their seventh annual study of this kind. The data basically surveyed many people from all different walks of life and all different work backgrounds. Out of their survey of all of these women, they found that 1 in 3 mothers have considered leaving the workforce or dialing back their careers because of COVID.

Burnout is obviously a major driver of people leaving the workforce and maybe looking for something remote across all genders. But what was interesting from this report in particular was, the report found that, "Women are even more burned out now than they were a year ago, and burnout is escalating much faster among women than among men. And that 1 in 3 women say they've considered downshifting their career or leaving the workforce this year. That 4 in 10 women have consider leaving their company or switching jobs and high employee turnover in recent months suggests that many of them are following through."

That was from that report I found that very interesting. I think that there are certain positive changes that are happening. Perhaps with the labor force where people are putting their priorities first and what works for them with their job. People, I think in many cases maybe they want better benefits, they want to earn more and they're willing to go out there and look and see what those options are because now there are so many hybrid and remote options.

But I do think there is also some of these less positive trends that are driving a labor shortage, such as this one I just mentioned. Definitely a lot of catalysts at play here.

Brian Withers: Rachel, I totally think that having coronavirus, it's hard enough to have kids and work from home when you're the primary caretaker and throw the fact in that the childcare place closes often or has been closed for an extended period of time. Or if you take your child there, it's likely they could get sick and depending on how old they are, they have medical challenges, that makes it even more complicated.

The stress of sometimes not being in the workplace and not being seen and not having your voice heard potentially with the unique schedule; and take that and now everybody's working remotely, absolutely, it makes sense to me that women are seeing these kinds of challenges and that's unfortunate. I hope that companies think about as we go hybrid how to make this better, and we may talk about that in just a bit [laughs]. But for me, I feel a little bit like I'm a trailblazer.

You talked about leaving the corporate office, and that's something I did a little over two years ago now and I really like this idea. People have worked from home for a while and some have even decided to move to different locations or certainly spend an extended period of time away from their house, and this has started to disconnect.

You're always used to, "Well, where do I need to work and then so then where do I need to live?" Actually disconnecting those two things, I think is a powerful exciting prospect for people as just, "Wait a minute I don't have to; one, drive in the office; and two, I can live anywhere. Wow, that's really great." [laughs]

All of us who work remotely, the three of us here certainly experience that, and have chosen this career somewhat because we have that flexibility. I think more and more people are discovering that they don't have to live where they work and I think that's exciting.