When a manager insisted last November that she work remotely despite suffering from COVID-19, Jesenia Ramos knew she had reached a breaking point and needed to make a change. But it wasn’t until late July when she and her husband, Alberto Cordero, also unhappy with his treatment at work during the pandemic, made the leap to self-employment.
“We wanted to make our dream come true. We wanted to open a restaurant. We thought about it a lot because we knew it was going to be a big change,” Ramos said.
The pair, who moved from Puerto Rico to Colorado in 2016, left behind careers in the retail industry and poured their life savings into a “ghost” kitchen in the Aurora Mall that serves the dishes they grew up with, as well as a second concept serving lighter fare like shakes and sandwiches.
“Honestly, we work a lot because when you have your own business you have to work. But I find what I am doing right now is more rewarding,” Ramos said. “When we decided to do the business, it was a way to be able to work as a family together.”
Ramos and Cordero are part of a growing trend of workers voluntarily quitting their jobs to pursue different options, what some analysts are calling the “Great Resignation.” It started in earnest in late spring and Colorado is a leader, ranking ninth in the nation with 3.4% of workers quitting their jobs, not counting retirees, in August. The U.S. rate also hit a record 2.9% in August.
To put that “quit rate” in perspective, an average of 2.4% of workers quit their job per month in Colorado in seasonally-adjusted counts going back to December 2000. In the tight labor market before the pandemic, when the unemployment rate was in the mid-2 percent range, it was averaging 2.8%, according to the U.S. Bureau of Labor Statistics.
When closures in March and April of last year resulted in massive layoffs, the quit rate went all the way down to 1%. By August 2020, it was back to the historical average of 2.4%, which represented 64,000 Colorado workers who quit their jobs that month. This August, 94,000 voluntarily stepped away from their jobs.
Normally, higher quit rates are associated with a tight labor market or economic recovery, said Ryan Gedney, a senior labor economist with the Colorado Department of Labor and Employment.
“What we do see in the trends both nationally and for Colorado is the quit rates have accelerated the last four or five months,” he said.
The quit rate has hit 3% before, he said, and it is important to note it is based on a smaller sample size than some other labor surveys. What is unusual about the new record high is that it coincides with a still relatively high 5.9% unemployment rate in Colorado in August. Normally, elevated unemployment and people voluntarily jumping ship don’t go hand in hand.
For example, when Colorado’s unemployment rate was at 5.9% in January 2003, the quit rate was 2.6% and it was 2.7% in January 2014, another month with 5.9% unemployment.
Elizabeth Renter, a data analyst at NerdWallet, said the U.S labor force has shrunk by 3 million people since February 2020. Most who left were near retirement age and took an early out. Parents who couldn’t find adequate child care, mostly women, also left their jobs to take on that role. And a segment of workers, concerned about their own health or caring for ill family members, continue to wait out the pandemic.
As the economy rebounded with the rollout of vaccines, it created an imbalance between job openings and available workers. There were 10.4 million jobs that need to be filled in August, but only 7.7 million unemployed workers in September available to fill them, Renter said. Employers have responded by lifting wages and offering more flexibility, and sensing the market is now in their favor, a growing number of workers are changing jobs.
Colorado has followed a slightly different path, with the labor force rising from 3.15 million right before the pandemic to 3.19 million, according to BLS counts. Coloradans are either working or actively looking for work at one of the highest rates of any state. That higher “participation rate” helps explain why Colorado, which used to have one of the lowest unemployment rates in the country, now has one of the highest. But it also represents increased competition and doesn’t explain why a larger number of people are quitting.
“We might be seeing a backlog of resignations. It made sense that people may have wanted to quit their jobs but waited until they were in a secure place,” Renter said, adding “There is still a lot of uncertainty.”
Despite that ongoing uncertainty, workers are quitting in record numbers, and for reasons that aren’t entirely monetary. Some are quitting even when they have nothing else lined up.
Leanne Groen holds her cat Zucchini at her home in Westminster on Wednesday, Nov. 3, 2021.
Enough is enough
Before the pandemic, Leanne Groen, who lives in Westminster, enjoyed her job at a professional employment organization advising small businesses that couldn’t afford their own human resources staff.
Even in the best of times, people don’t connect with human resources because they are happy and want to say how much they love their manager, she said. The pandemic introduced a whole new set of complicated issues to tackle — government-ordered closures, remote work, new sick leave rules, mask mandates and vaccination requirements. Often, the directives came down piecemeal and open to interpretation.
Groen found herself on the front lines explaining complicated issues to desperate small-business owners facing the loss of their livelihoods, and it wasn’t pretty.
“I have experienced wonderful customers and nasty customers at their wit’s end. They are navigating through this pandemic and their tempers are at an all-time high. Human resources came to be a punching bag,” Groen said.
No matter how understanding her manager was or how many vacations she took to renew herself, Groen said she couldn’t get back into a positive frame of mind about her job and career choice.
“How do you solve burnout?” she asked. “It is not like you can remove me from my role entirely. Maybe you are on the right bus but in the wrong seat. But there wasn’t another role for me to move into. We were a small business and consulted with small businesses.”
The breaking point for Groen came this summer when she had to deliver bad news to a client who was already having a horrible day. He unleashed on her with fury, triggering a panic attack and breaking her will to stay. She knew she needed to get off the bus.
“It was so heartbreaking to see small businesses suffer like this. I hated watching them suffer having to navigate the overly complicated but necessary rules,” she said. Earlier this month, Groen finally quit her job and plans to start over in a new career, one she will take time to figure out.
Ramos also liked her job and said she was well-paid fielding customer service calls from home for a retailer. Her husband worked as a manager in loss prevention at a mall in Lakewood. Although they longed for more family time, the couple, in their 30s, said they were in a good spot financially.
Co-owner of Cocina Isla Encanto, Alberto Cordero, slices a skirt steak for an order in the kitchen at The Aurora Eatery in the Aurora Mall Nov. 04, 2021.
But the pandemic changed everything. Cordero’s National Guard unit was deployed to provide relief during the outbreak and he injured his leg. Because hospitals were full, he couldn’t get the surgery he needed. When he did finally get it, his employer pressured him to come back before he was ready, forcing him to work in pain, Ramos said.
And there was last November when COVID-19 infected family members one-by-one and Ramos used up her leave caring for her family until she got sick herself.
“My supervisor said you have to work with COVID, you already took your days, that it wasn’t fair to my team,” she said. “I was short of breath. I still feel the consequences of having COVID.”
Ramos was working night shifts and waking up with only three hours of sleep so she could look after her children. Understaffed, her husband’s employer demanded more and more hours, and because he was salaried, didn’t offer any overtime pay. How he was treated after his injury also factored into his decision to leave. The couple both quit their jobs, took their personal and retirement savings and started Cocina Isla Encanto in August.
“You want your paycheck and your security and at the same time, you want to be your own boss,” Ramos said. “That is one of the things I love about our new business. I love that we can spend our time together.”
The pandemic effect
For many, the pandemic has forced a deeper re-examination about what brings purpose and fulfillment, a reckoning of what matters most to them. And that reckoning has the potential to force a reset of the relationship between employer and employee, said Kate Roeske-Zummer and Debbie Cohen, co-founders of Boulder-based consulting firm HumanityWorks.
“We created a narrative in business that productivity is about efficiency and output. We have process engineered this to death, to the point where there is nothing left for these people to give,” Roeske-Zummer said. “It has been one-sided and it has been unstable and there is now an opportunity to revisit the relationship, to start conversations.”
Although it is still early, many companies are responding by raising pay, trying to outbid the completion, essentially doubling down on the old model of come work and get paid, she said. Nearly half of employers reported worker shortages and a record 58% of U.S. employers bumped up pay with none lowering it, according to a quarterly survey from the National Association for Business Economics.
The pandemic also left many workers who didn’t have health insurance coverage or paid sick leave realizing how exposed they were, but employers have been slower to add benefits than boost pay.
Pay is important in that people see it as a measure of value, and people want to feel valued, Cohen said. But there is a risk that the cost of doing business could outstrip the ability of companies to stay viable, which will trigger another round of layoffs and dislocations.
“Be thoughtful about what you are trying to create here — mutual respect between the business and its people,” she advised.
Likewise, Roeske-Zummer urged workers to be deliberate about the motivations behind the moves they make and to push to make a difference.
“You need to understand what is important to you and act from that place. How does that translate into my life, into the work that I am doing,” she said.
Alyssa Malpede, practice director with staffing and consulting firm Robert Half in Denver, has witnessed the shift from both sides — employees who have faced a pandemic-induced epiphany and employers scrambling to find enough help to participate in the rebound, and in some cases just keep the doors open.
“For those companies that aren’t following the trend to take care of their people, they will lose individuals faster than they can blink,” Malpede said. “There is a level of confidence that employees have that they never had before. They are saying ‘I know I have the power to choose.’ “
Both labor shortages and elevated inflation rates could persist well into 2022, Chris Akers, an economist with the Colorado Demography Office, predicted on Friday, which in turn could hold back economic growth in the state until they are resolved.
Malpede said the old model of hiring and retention won’t work in today’s environment and that employers need to rethink how they approach their relationship with the people they employ.
“My biggest message — if you find someone you like, hire them. Don’t drag your feet. You won’t have the option of sitting on it for two days,” she said.
As for employees, she urges them to understand what they want and to communicate it to a prospective employer. It might be the amount of pay, benefits, flexibility, mission, training, advancement. Don’t jump without knowing where you are landing.
“You want your new employer to match or understand and recognize what those priorities are as well. Employees need to communicate that ‘this is what I am needing and this is important to me,’ ” she said.