Lately, it's everywhere in the news: Everyone is quitting.
Employers can't fill jobs. Businesses are reducing their hours for lack of staff. And why are employees quitting? Is it a search for better opportunities? Embarking on a new career or industry? Needing more workplace flexibility?
This is an effect of the COVID-19 pandemic that many might not have seen coming. But in hindsight, it may make some sense: Months of closed offices and lockdowns have led many to think about their lives.
The headlines tell the story: The Wall Street Journal reports that U.S. workers left their jobs nearly 20 million times between April and August this year. That's a number more than 60% higher than the resignations handed in during the same period last year, and 12% above the spring and summer of 2019 when the job market was the hottest it had been in almost 50 years. Although waves of resignations are more typically led by younger employees, workers between 40 and 50 years old also quit in higher numbers this year-an increase of more than 38%.
In October the New York Times wrote that nearly 4.3 million workers voluntarily quit their jobs in August, up from four million in July and the most in the two decades that the government has been keeping track. The Washington Post concurs: Nearly one in three U.S. workers under 40 have thought about changing their occupation or field of work since the pandemic began.
It's happening across industries, from food service to finance, from hospitality to health care.
It's being called The Great Resignation.
The government's response to COVID-19 brought numerous economic incentives to the public, including extended unemployment benefits, stimulus checks, and reduced interest rates. With this increased cash flow, perhaps some employees felt like they could make ends meet without a job.
But even as unemployment benefits decreased, it hasn't seemed to immediately translate into a significant employment uptick. Instead it seems to decrease spending, as people cut back rather than jump right back to work: For example, a CNBC article reported that states that withdrew early from federal unemployment programs fueled nearly a $2 billion cut in household spending instead.
Or employees might have invested time and monetary resources into learning new skills or changing careers. Time reports that back in January 2021, 66% of unemployed people-at every income level-were considering changing occupations and a third of them had started taking courses or job retraining. The Society for Human Resource Management (SHRM) reports interest in retraining overall is highest-70%-among people who lost the most income during the pandemic. Among those in the travel and tourism industry, for example, 68% globally have been laid off or had their hours cut. But in terms of willingness to retrain, a Boston Consulting Group survey shows that about 70-75% workers in that sector are willing to retrain. That same survey also points out that approximately 65% of those in the finance industry are also willing to retrain either for a new career or improve skills in their current one.
Although the industries may look quite different, the urge to see what else is out there applies across sectors.
Although banking and payments have not been hit nearly as hard as the manufacturing, hospitality, food and leisure, and health care industries, the pandemic still is leading to career changes for many who haven't been getting what they want in their current fields.
Yvette Lee, human resources advisor at SHRM says, "In the industries that were hardest hit because of closures, there were people who turned to look at industries that, in the future, may not be as impacted. Like a waitress who decides that she wants to learn coding so she can have more stability and flexibility at work."
Where they want to be
Perhaps many with poor working conditions have quit and used stimulus funds and unemployment benefits to spend more time looking for other jobs or careers. But it's also likely that workers everywhere in every industry are reconsidering what work means.
COVID-19 has caused many to work remotely and for employers to quickly pivot tasks and processes to being remote; consider how financial institutions turned many services digital seemingly overnight, and it seems to have benefitted them greatly: The digital transformations from financial services have led to better than expected earnings in the first two quarters of 2021.
But digital transformation may also bring workplace snags: Anecdotal evidence from financial institutions points to a difficult time finding frontline workers, such as tellers and branch employees, to work typical business hours. Yet financial institutions, from small credit unions across the country to behemoths such as Bank of America are upping starting wages-up to $25 an hour.
Is it helping? The jury's still out.
But not everyone wants to work totally remotely either; a Post-Scar School poll reports that
a majority of workers ― 59%- say they do want to return to their workplace all or most of the time after the pandemic is over. Just under 2 in 10 say they want to mostly (10%) or always (8%) work remotely, while 2 in 10 desire an even split between working at home and commuting occasionally.
As Lee points out, the pandemic has caused-and continues to cause-a shift, and workplaces everywhere will be affected. "Employers have had to reimagine the workplace," she says.
What this means for payments
Some of the challenges that financial institutions have faced during the pandemic were similar during pre-pandemic times-they just came up faster. For example, organizations who were moving processes and services online had the advantage. But that advantage was a slim one, because the pandemic exponentially sped up the need for those processes and services. Issues such as security and operations still remain challenging in a remote environment.
Banks also have the issues of keeping employees and the public safe as well, from plexiglass barriers to limited hours to branch closures. Some FIs have actually increased security on premises because of mask requirements and ensuring customers adhere to them. "Masking mandates have made people react in different ways, and when you are in a bank, that's not a situation you want to be in," Lee says.
Safety is one thing, and personal fulfillment at work is another. Many of us identify ourselves by what we do at work, but people also want to live a balanced life between our jobs and our families, says Linda Carmichael, SVP, Operations Fidelity Bank and NEACH board member. "Some managers enjoy the camaraderie inside the bank, but others think, 'I have done my job well, and I have done it inside my house, so why do I need to come back?' Those decisions need to be demonstrated by leadership," she says.
Although many factors-such as the pandemic, savings, and care duties-are involved in this employment situation, say economists, the issue is not going to transform overnight. At NEACH, our New Role of Operations Workgroup outlined changes in staffing in a recently released white paper.
Future posts will address what changes like this mean for payments now and moving forward. Because, without a doubt, as these employment developments continue, their impact will leave a lasting mark across our industry.
AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.