Companies that made it through the pandemic in one piece now have a major new problem: more than a quarter of their employees may leave.
What's happening: Workers have had more than a year to reconsider work-life balance or career paths, and as the world opens back up, many of them will give their two weeks' notice and make those changes they’ve been dreaming about.
“The great resignation” is what economists are dubbing it.
I talked to a guy the other day and he had an interesting perspective. He said “how is it all these companies survived COVID, but they won’t survive post COVID?” Nobody can get product to sell, or the materials they need to make products to sell, and now a massive labor shortage. He said “just watch how many companies go out of business over the next two years,” just because of the two reasons I mentioned above.
Can’t disagree with his view.
^ That’s similar to my view but I think the bigger guys are going to buy out the smaller businesses at distress sale prices
"more than a quarter of their employees may leave."
I think this is grossly exaggerated but the exodus will be tangible.
Boomers leaving have been helped by the surging stock and home prices.
Guy on my team announced his retirement. He was of age but the main reason he gave was he didn't want to come back into the office.
This will be a great time of opportunity for young motivated talent. Name their price.
I'm living through both material and labor shortages in my industry right now. Demand has been pent up for a year and I have never been busier. My company didn't do any layoffs as it was an essential business during the pandemic. However, even when we have staff to meet a customer demand, the materials can be tough to get at times.
Another article saying the same thing.
^ I don’t disagree with any of that but in the end, the scenario as I see it will be long term not so advantageous to employees, as when the consolidation takes place the employees will eventually have less options
Yep right now an employee with a specific skill set may be able to jump ship and go work for companies A, B, C, D, E, F or G and with your prediction 2 years later maybe only companies A, D and G are still left. The remaining ones were either bought out or went out of business.
^ Extrapolate that to how the stock market is performing, an awful lot of people are worried about inflation, the smart money which includes the Fed is discounting inflation as short term problem, that is how I see all of this.
On the subject of unskilled labor wage inflation.
Be hard to imagine what's it like being a current employee watching newbies hired in at 20 to 30% over standard wage. Everyone's wage will have to go up.
I don't see short term inflation in that scenario.
A lot of people that leave their long term jobs right now may be sorry in the near future. The market is so volatile right now that there is no way to know which businesses will be stable or able to grow long term. A business that is thriving and hiring right now may not be doing so well 2 years from now when the pent up demand has been met and the bubble starts to burst.
The new employees that are currently being hired may well be the first ones laid off when the market changes. While large companies are more likely to survive in the long term it doesn't mean taking a job at a large company right now is any safer. They are likely to snap up smaller businesses that are struggling and will want to keep any top talent they aquire from those companies and eliminate any recently hired people that are in similar roles within their company.
While seniority alone won't keep you safe at your current job, if you are good at the job you will have proven your value to them. Between that and the relationships you should have built with your coworkers and clients you will be safer than you would be at a new company.
You know who always gives good work/business advice? Whodey. Always appreciate his views on topics like this.
I don't think people will be resigning. With prices going up and economic uncertainty. People will hold on to whatever they have.
I of course work because my wife is mean and doesn't want me drinking, smoking weed, gambling and strip clubbing 7 days a week; just 4.
@Lone_Wolf @whodey just explained why it's a short term problem, keep in mind 2-3 years down the road at your new company when the hot as hell demand of right now starts to cool down, you'll be the more recently hired guy and when they need to cut back your the cut back like it or not. Trust one thing the economy is always changing what is true right now, will not be the proper strategy in a very short time period.
I'd heard there are a lot of people retiring - perhaps the pandemic made them realize it's better to start smelling the roses
"... how is it all these companies survived COVID, but they won’t survive post COVID?” ..."
It's part of The Great Reset and dismantling of Capitalism
People got used to sitting on their butts getting paid. Now they have to work again, they don't like it. I think at this point, its mostly just a threat. Workers think it is so much better somewhere else. Then some will change jobs, then figure out the old job wasn't so bad. We just need to get rid of these stupid extra unemployment payments.
Can't really blame them for balking to go back to work after getting a taste of decent money.
Right or wrong, the wages for unskilled labor are unlivable in this country. Not even close.
I think it’s more of the matter that many older employees who could have retired simply held on longer due to boredom and what else would they do with the extra time on their hands. There was a backup of resignations and now that will bottleneck rehiring processes. I see lots of people job hopping and doing lateral changes.
Part of it that people who were planning to retire in a few years are just going to do it now. With all the stay at home working eliminating travel expenses and general the shutdown of leisure they have been packing away money for a year.
I think industries that had unusually low turnover during the pandemic due to people staying put will see a wave.
My industry has been business as usual since last fall. I don't expect crazy turnover but there definitely are opportunities out there.
I’d retire if I was a couple years older. Not ready mentally to retire but I was tempted this last year. I didnt like teleworking
Now you have both Bank of America and Goldman Sachs telling their employees that they are expected back in the office after Labor Day, the CEO of Goldman Sachs said he will no longer pay New York wages to employees working remotely from much cheaper locations, and Bank of America is requiring their employees to disclose whether or not they are vaccinated, I know a lot of you Libertarian leaning will have a problem with that but too bad, the employees of these companies and their affiliates are among the highest paid with more benefits than most, if they don't like the edicts they can find another job.
I’m not sure I’d want to work downtown either. Just seems such a hassle getting to and fro, so why bother when you can take half the pay elsewhere since openings are out there, and your living costs are more manageable. Seems a no brainer to me other than to leave and live away from that. I heard real estate prices have fallen the most their and in SF the past year. Not everywhere is real estate booming.
I work in the banking industry and I don't see any problem with this. Expecting the NYC pay level while not having to deal with the NYC cost of living is ridiculous. When I just looked at a cost of living difference between Cincinnati and Manhatten it shows that the cost of living is 171% higher in Manhatten. That means to enjoy the same life style I have in Cincinnati with ~$100k salary I would need a $271k salary in Manhatten. For me it would be an even more dramatic difference since I live in a very rural area an hour east of Cincinnati with an even lower cost of living.
My company has an office in Manhatten and I often see positions that are virtually identical to my current one and could be easily be done remotely just like I currently do mine. If I tried to apply for one of those jobs and told them I wanted the Manhatten pay bracket and to keep working from home here in Ohio they would just laugh.
In the past the majority of people with the education an skills that Wall St firms were looking for all moved to NYC to work on Wall St. Now that the past year proved beyond a doubt that these types of jobs can be done remotely a lot of companies will likely look to hire people outside of NYC, but they won't be paying NYC wages for the remote position. It will be a great way for the company to save money by paying a lower wage and by not needing to pay for a massive Manhatten office. The prospective employees will still be able to enjoy the same quality of living by living in a cheaper location.
I think in the long run this can have the same type of effect that the highway system did by allowing people to live further away from the currently overcrowded city cores. There will always be some people who enjoy living in the heart of a busy and vibrant city but there are also many that live in an overcrowded city that would prefer to have more personal space by living outside the city but don't move out of the city because they don't want a long commute to work every day.
As to requiring employees to prove they are vaccinated, I don't see any problem with that. A business should be free to require things like vaccinations if they so choose and the employees should be free to find a new company if they don't agree with the company's policy. If a large number of people want to work for a company that doesn't require vaccinations the market will adjust to benefit those companies and if a large number of employees don't want to work in an office with people who may not be vaccinated the market will adjust to benefit companies that do require vaccination. Personally, I don't think most employees care enough about their company's vaccination policy to change jobs over it. There are a small percentage of people that will only want to work in an office that requires everyone to be vaccinated and a small number of people who will refuse to work for a company that requires them to be vaccinated. Probably 80%, including myself, don't care much either way.
@whodey I agree with everything that you’ve said the difference being those people that are close to retirement they will likely stay in the city for the bucks as their pensions and benefits will take a hit and I’m sure a large portion of those workers are planning on relocating once they retire anyway and won’t want to take the salary hit after so many years of dealing with the living situation
It's a free market. Companies can pay what they want and people should be free to decide it they want to be vaccinated. I am but am at the tail end of a career that I want to finish up without hassle.
The free market will decide who gets paid and what rules they will have to follow. I couldn't get paid enough to live in NYC with the bullshit that you have to put up with. Hell, I live in California but work in other states most of the time. I'm going end up living 6 months and 1 day in another place because of the jackass politics in CA.
One car argue that if one's job is done almost exclusively on a computer that person can be anywhere as long as they get the job done - add to that apps like Zoom and you should be good to go - it may not be as clear-cut as that but perhaps it's b/c it's a new paradigm - I guess one reason to work face-2-face w/ colleagues is to enhance the collaborative process (e.g. tech-jobs; etc) but this may not be that necessary for many jobs.
w.r.t. the vaccine - personally I think it's fucked-up to require/force a person to have it - at the end of the day this was a vax that was quickly developed and disseminated; it hasn't been yet approved by the FDA; and NO ONE knows what the long terms effects will be not only of a new vaccine but a new technology dealing with DNA manipulation - I think too many people are putting too much blind-trust on our "health experts" and on technology - a lot of the people I've been hearing not wanting to get it are actually in the medical-field - in congressional-testimony it was reported that about half the folks at the CDC and NIH had not been vaccinated.
At the end of the day - those that wanna get the vaccine should not be forcing those that don't want it - at the end of the day if the vaccine "is that good" then those that got the vaccine should not have to worry and it should be those that didn't get the vaccine that should worry; right?
Corporations in order to be competitive will at a minimum offer a hybrid model of remote/office work, because that is where the marketplace is heading as the norm with many positions fully remote. This of course depends on your field of work. Truckers not at all.
"at the end of the day if the vaccine "is that good" then those that got the vaccine should not have to worry and it should be those that didn't get the vaccine that should worry; right?"
That's not entirely true since this vaccine, or any vaccine that I am aware of, is not 100% effective. Even with a 90% (or whatever the actual number turns out to be) effective vaccine, working closely around unvaccinated people still exposes you to a higher risk than working around only vaccinated people.
I would be opposed to a government regulation that said you have to be vaccinated to work at any private company or even in specific industries. I am not opposed to private companies making a decision based on their perceived risk vs reward evaluation and setting their own internal policy to require vaccination or not.
This is no different than companies that routinely have employees that travel to high risk areas requiring vaccines for diseases that are prevalent in those areas. It is also no different than companies that require their employees to use additional safety gear beyond what is regulated by OSHA.
In a free market a private company should feel free to take whatever safety precautions it feels necessary. Personally if I were making the decision for my company I wouldn't require vaccination as a condition of employment, but I would require that anyone who can't show proof that they have been vaccinated would have to continue to wear a mask and follow many of the same types of precautions that have been in place over the past year whenever they are in close proximity to any other employee or client.
Speaking of remote work, I thought this article in today's WSJ was interesting:
"Many Companies Want Remote Workers—Except From Colorado" wsj.com
tl;dr: an unintended consequence of a Colorado state law requiring employers to disclose the salaries for open positions. Rather than disclosing salaries for remote positions, many companies are stating that you can't do remote work from Colorado.
There was a 1985 comedy called Lost in America about a man who decides he is tired of the rat race and suddenly quits his job. Some of these 25% may have a similar experience.
I am one of those. After years of management, I’m ready to head back towards a 40 hour work week. My company is bending over backwards to retain me, but even with bonus incentives working 60 hours a week is in no way satisfying or personally fulfilling.
I’m glad I’m retired now these issues are not going to be easily resolved and it’s going to get very difficult for smaller businesses to survive let alone expand
Larger businesses will be fine and work out the issues as they come up but the little guys are in trouble now