America’s return to power could mean another round of quits

Corn as the “great comeback” looms for employees who have spent months working from home, their attitude toward in-person work, compensation, and changing jobs may underwent a similar metamorphosis.

All these workers applying for different jobs have incited wage competition between companies, driving up wages. And, in turn, those higher wages pushed inflation even higher, with the ‘big quit’ contributing about a full percentage point to last year’s inflation rate, according to a new report of the Federal Reserve Bank of Chicago.
In December, the Fed’s preferred measure of inflation – the personal consumption expenditure price index – rose 5.8% from a year earlier. It was the biggest leap since 1982.
Meanwhile, the nation has many more jobs available than workers to fill them. In December, there were nearly 11 million job vacancies, or 58 unemployed for every 100 jobs, according to ZipRecruiter.

As more people are looking for a new job when they are already employed, negotiated wages increase, according to the Chicago Fed, which fuels wage inflation and, to some extent, headline inflation.

Will the “great resignation” take on even greater proportions?

It is impossible to say whether Wage pressures and high job mobility will persist through 2022 and beyond the pandemic, Chicago Fed economists said. For now, the jury is still out.

Julia Pollak, chief economist at ZipRecruiter, predicts that many people who must return to the office full-time will leave for jobs with greater flexibility.

“March 1 is the new back-to-office date for many companies. Those that force employees back into the office five days a week are facing a bigger backlash than they anticipated, so much so that the big resignation may accelerate in the coming months,” Pollak told CNN Business in an email.

More than half of workers with jobs that can be done remotely say they want to work from home all or most of the time, even after the pandemic, according to a survey released Wednesday by the Pew Research Center.

Ultimately, the market will determine what it takes for companies to win in the war for talent amid a labor shortage, Pollak added.

Being back in an office environment, surrounded by colleagues and, more importantly, supervisors, would make it harder to sneak around Zoom (ZM) maintenance in the working day. On top of that, returning to in-person work could also increase job satisfaction in some industries after such a long period of isolation from colleagues.

If going back to the office really dissuades workers from changing jobs, it could also ease some of the inflationary pressures caused by higher wages.

In their efforts to retain talent, some employers offer extra time off, pet sitting, or other creative perks. Many are also considering hybrid work schedules that include days in the office and days worked remotely to appease workers and their newfound flexibility.

–Jeanne Sahadi of CNN Business contributed to this report

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