No other phenomenon since World War II has made as significant an impact on the labor market as the Covid-19 pandemic has. What we have been through in the last two years might have forever transformed work and office life as we knew them.
The technology sector traditionally had a high turnover rate for years. This is partly a result of the dynamism of the sector, with startups turning into unicorns in a few years and attracting talent like a magnet. Part of it is due to the characteristics of the workforce—highly educated and always in demand regardless of the location. Switching careers every few years for higher pay and more responsibility is nothing unusual in the software industry. What is unusual is this phenomenon spreading to other sectors.
47.4 million Americans quit their jobs in 2021, with 4.3 million in December alone. Termed as “The Great Resignation” by Anthony Klotz, an associate professor of management at Texas A & M University, this phenomenon baffled scholars and economists. Theories as to its causes abound.
- The pandemic prompted older employees to seek early retirement. They probably thought continuing their careers during the pandemic was not worth it.
- Some people took this opportunity to realize their business ideas and try their luck as entrepreneurs.
- The health risks and lockdowns forced employees in their primes to get their priorities straight and act accordingly. These priorities are particularly reflected in employees’ preference for a hybrid work arrangement. The 2021 Work Trend Index commissioned by Microsoft found that 73 percent of employees wanted flexible remote work options to continue in some form after the pandemic.
- Low-wage earners got a chance to receive better pay by changing jobs.
It was this last point that made scholars and HR people rethink the massive transformation in the labor market. Low-wage earners were thought to be more conservative in changing careers and value job stability more than high-wage earners did. Not anymore. The accommodation and food services sector in the U.S., which is traditionally characterized by low wages, saw a spike in job openings in 2021, with more than 10 percent of jobs remaining vacant as of August 2021.
It turns out what has been coined as “The Great Resignation” was low-paid employees taking a page out of developers’ books. Low-wage workers are enjoying an unusually high level of bargaining power vis-à-vis the employers. There are more jobs than ever before, people are leaning on their savings and stimulus checks they received from the governments to weather the storm, and nobody seems to be in a rush to work in less than ideal conditions. Apparently, the easing of lockdown measures has created a great demand for workers. Some employees left their jobs for greener pastures with better terms and higher pay, luring others to take their places and setting off a chain reaction of sorts.
Bharat Ramamurti, the National Economic Council Deputy Director, defines this phenomenon as “The Great Upgrade.” It involves companies vying to attract talent and offering higher salaries, signing bonuses, remote and hybrid work arrangements, and other perks to sweeten the pot. Some others prefer describing this as “The Great Negotiation” or “The Great Reshuffle,” but the main idea stands.
Pandemic had a serious impact on the traffic job search websites attract. Job search websites saw a significant decline in traffic during the first half of 2020. The traffic for the whole segment was down 14.6 percent on the year. Long lockdowns, non-existent demand in many industries, and the uncertainty about the possible trajectory of the pandemic all played a role in that sharp decline.
As the economic prospects improved in 2021, so did the traffic and revenue for those websites. The financials of Recruit Holdings Co. Ltd, the parent company of top job search websites like Indeed and Glassdoor, offers us a peek into this remarkable turnaround. The company’s HR Technology segment, under which Indeed and Glassdoor are listed, enjoyed a 107.3 percent year-on-year increase in revenue in the second quarter of 2021, showing us that the pandemic is behind us as far as the job market is concerned.
For people willing to take advantage of this surge in interest in job search websites, Peaka has launched a job marketplace app template: JobPointer. This template lets you build a marketplace app that brings together employers and employees. The former can use the app to handle job postings and keep track of applications for vacant positions. Employers cannot risk making the wrong call in hiring at a time when the labor market is unusually active, and they no longer enjoy the upper hand. JobPointer will give them the best chance to attract talent. On the other hand, employees can upload their resumes to the app and manage their applications. With so many options to choose from, they will benefit from the structure JobPointer will introduce into their job hunting processes.
For people willing to capitalize on the sea change taking place in the job market, JobPointer is ready to show the way.