Rising prices, interest rates and cost-of-living crisis is fueling job quits around the World
PwC surveyed 53,912 global workers in June 2023, and 26% said they planned to quit within the year. A great deal of this is driven by the cost-of-living crisis, which is particularly acute in the UK: 47% of UK workers reported having little to no savings at the end of each month, and another 15% stating they struggle to pay their bills.
This financial precarity has been pushing workers to move around the labor market – and sometimes to leave it altogether.
There is a possibility of people voting with their feet.
According to Dana Peterson, chief economist at global economic think-tank The Conference Board, people tend to cling to what’s familiar to them during times of stress and economic uncertainty.
In the US, 2.6 million jobs were lost during the 2008 recession, and quit rates remained low throughout the following years. She says workers typically stay put during a downturn when vacancies shrink and companies become nervous.
As a result of this time’s cost-of-living crisis, more workers are shifting jobs.
There are still a lot of open positions available, which is contributing to this. Even though UK vacancies are declining, they still outnumber pre-pandemic levels. The US labour market continues to grow: 497,000 jobs were added to the economy in June 2023, the largest monthly gain in a year.
Following the Great Resignation, Sarah Moore, head of people and organization at PwC UK, says more employees may consider a new role for a better salary than they would have before the pandemic. “We’re still seeing elevated quit rates following Covid-19, and pay is typically the main factor for finding a new job: in times of crisis, people may vote with their feet.”
Many working parents, particularly mothers, are doing a cost-of-living versus salary calculation as expenses rise. The average cost of sending a child younger than two to nursery for 25 hours a week in the UK is £7,729 per year. Even in areas with lower living costs, the US Department of Labor called childcare prices “unaffordable for families.”.
In some cases, the cost of care exceeds a parent’s salary, so leaving a job to become a full-time caregiver makes more financial sense. “Asking, ‘Is childcare worth it? ’ is nothing new – but it’s now intensifying,” says Melissa Gauge, founder of London-based SpareMyTime, a virtual assistance agency that predominantly employs working mothers.
While the cost-of-living crisis is creating movement in the labour market for some workers, not everyone is able to change roles to put them in a better financial position.
Among the parents whose childcare costs outstrip her hourly earnings is UK-based Tayyaba, who is participating in the Changing Realities project, a collaboration between parents, carers and researchers at the University of York.
An NHS frontline worker, Tayyaba says she’s trapped in her role. “I’m not able to work part time, so three weeks ago I was about to quit. But then [I realised] it would mean that I couldn’t cope with the current crisis: quitting my job is not realistic.