The pandemic era’s “great resignation” has morphed into desperate “job hugging” — with workers clinging to their positions at levels not seen in nearly a decade, according to the latest data.
The so-called quits rate among US workers slipped to 2.0% in June, far below the 3.0% peak of November 2021, according to the Bureau of Labor Statistics.
Just 3.14 million people quit in June — down from 3.27 million in May — marking a steady return to pre-pandemic lows. By contrast, 4.5 million people quit their jobs in November 2021.
Employees are holding onto jobs “for dear life,” consultants at Korn Ferry wrote in a report last week that was cited on Monday by CNBC.
In total, about 47.4 million Americans quit their jobs throughout 2021, setting an annual record. As of June, around 19.3 million Americans have voluntarily quit their jobs year-to-date.
“There is this stagnation in the labor market, where the hires, quits and layoff rates are low,” Laura Ullrich, director of economic research in North America at the Indeed Hiring Lab, told CNBC.
“There’s just not a lot of movement at all.”
That has led to the voluntary quits rate crashing to lows unseen since 2016, outside the first days of the COVID pandemic.
“There’s quite a bit of uncertainty in the world — economic, political, global — and I think uncertainty causes people to naturally” remain in a holding pattern, Matt Bohn, an executive search consultant at Korn Ferry, told the Comcast-owned financial news service.
He compared spooked workers to skittish investors sitting on the sidelines, waiting for the right opportunity.
The lack of movement comes as higher interest rates make it more costly for businesses to borrow money and expand operations.
Job growth has slowed sharply in recent months, with the hiring rate plunging to its lowest level in more than a decade, excluding early pandemic days.
More CEOs now plan to shrink their workforce over the next 12 months than expand it — the first time that’s happened since 2020, according to a recent survey. A Conference Board poll published this month found 34% of executives planning cuts versus just 27% expecting to hire.
The dramatic shift from the great resignation to the great stay reflects a labor market that’s essentially frozen solid.
Workers who couldn’t stop quitting two years ago now won’t budge.
But this death grip on current jobs carries serious risks, experts warned.
Job huggers are sacrificing cash because those who switch typically command higher wages than those who stay put, Ullrich noted.
Workers getting too comfortable may stagnate rather than take on additional responsibilities or learn new skills.
This impacts their marketability and career growth when the labor market eventually improves, Bohn cautioned. Employers might also decide these static workers no longer meet performance standards.
It’s not inherently bad to stay in a job for a long time, experts stressed, but hugging too tightly can backfire.
The freeze-up also makes it harder for new entrants like recent graduates to break in. With fewer workers moving up or out, there’s nowhere for them to slot in, Ullrich told CNBC.
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