Great Reevaluation: Motivations Driving Labor Force Turnover

Analysis led by Nick Karnovsky, Lance Guthrie and Melissa Bearden

The American labor force has undergone unprecedented turnover over the past two years. High levels of pandemic-driven involuntary job loss soon pivoted to 47.4 million workers voluntarily leaving their jobs in 2021 – the highest average “quit rate”¹ on record, according to the U.S. Bureau of Labor Statistics. And as of May 2022, nearly 22 million Americans have voluntarily left their jobs. 

To uncover drivers behind these high quit rates, or what is now popularly referred to as the "Great Resignation," the following report examines workers’ motivations for willingly leaving their jobs during the pandemic, based on a nationally representative self-reported survey of U.S. consumers broadly conducted in June. 

The top drivers of job change across U.S. consumers are company or role-specific reasons (40%)², followed by financial (18%), and health and family related considerations (17%). However, there are nuanced differences in motivation by income, gender, race and ethnicity based on self-reported survey results. For example, lower earners, or those earning less than $25,000 per year, are more likely to report avoiding COVID risk as a key motivator for leaving their job. Lower-middle earning women (i.e., those making less than $50,000 in household income annually) are more likely to cite health and family reasons, while men earning the same are more likely to cite company or role specific reasons and financial opportunities as primary drivers. Pay and opportunities for advancement are a factor of consideration for currently employed workers. Currently employed Americans across all income groups think they deserve a raise, but higher earners are more likely to receive them.

Note: all data in this report is from self-reported, anonymous research of U.S. consumers broadly, not specifically from or about Capital One customers or employees.

According to data collected in June 2022, key findings include:

Company or role-specific reasons topped the list of motivations for leaving a job of their own volition since the beginning of the pandemic, and findings indicate that these drivers differ meaningfully by income, gender, race and ethnicity. While many respondents cite higher pay as a key driver behind leaving their job, other factors such as childcare and family pressures are playing a larger role in decisions among women and Hispanic and Black lower-middle earners (i.e., those making less than $50,000 in household income annually) based on self-reported survey data.

• Of those who chose to leave a job of their own volition during the pandemic, 40% cite company or role-specific reasons and another nearly one-in-five cite financial opportunities (18%) or health and family reasons (17%).
  • Company or role-specific reasons is an aggregate of the following responses: Work/life balance (13%), company culture (7%), need a change of pace (6%), feeling stuck in their job (5%), wanting a job with more purpose (4%), the company's approach to remote work (3%), or the belief that they would “be fired anyway” (2%). 
  • Financial opportunities are comprised of: better wages (8%), sign up bonus (6%) and better benefits (4%). 
  • Health and family reasons include: not worth the COVID risk (11%) and childcare (6%).
  • In addition to these responses, another 25% cite “other” as their reason for leaving. 
• Among lower-middle earners who chose to leave their job, Hispanic respondents were significantly more likely than White respondents to cite company or role-specific reasons and work-life balance as the primary reason for why they left a job. Nearly half (48%) of Hispanic lower-middle earners (i.e., those making less than $50,000 in household income annually) who left a job of their own free will cited company or role-specific reasons, compared with three-in-ten White lower-middle earners. Nearly two-in-ten (17%) of Hispanic lower-middle earners cited work-life balance, while one-in-ten White respondents in the same income group reported the same. Similar shares of both Hispanic and White lower-middle earners cited avoiding COVID risk (13% and 11%) and better wages (both 7%).
• Among lower-middle earners, women were more likely to cite health and family reasons (25% v. 14%) as why they left a job, while men in the same income group were more likely to cite company or role specific reasons (51% v. 30%). Similar shares of lower-middle earning women (12%) and men (11%) cited work-life balance.
• For respondents with children, more than one in four (26%) say that they are working less than prior to the pandemic or have stopped working altogether. This percentage increases for lower-middle earners with children; 45% of women say they are working less or have stopped working altogether than before the pandemic, compared with 41% of men in the same income group.
• Pay and opportunities for advancement are a factor of consideration for currently employed workers. More than three-quarters of currently employed Americans across income groups think they deserve a raise – but higher earners are nearly twice as likely to receive a raise, bonus or promotion. Seventy-four percent of Americans say they are more deserving of a raise now than a year ago, a share that remains steady across income groups. However, two-in-ten higher earners say they have received a non-performance-based raise or bonus in the past three months, compared with 12% of middle and lower earners, respectively. In addition, nearly one-in-five higher earners (18%) say they have been promoted in the past three months, compared with 8% of middle earners and 6% of lower earners.

As recent as June 2022, about one-in-five Americans who left a job out of their own volition cited financial opportunities and health and family reasons as the driving force behind their decision to leave.

• Lower earners were more likely than higher earners to cite COVID risk as the reason why they left a job, while higher earners cite better wages. Fifteen percent of lower earners said avoiding COVID risk was why they left a job, while 11% of higher earners said the same. Meanwhile, one-in-ten higher earners reported better wages and only 2% of lower earners said the same.
• Middle and lower earners are nearly ten times more likely as higher earners to cite feeling stuck in their job as the primary reason for leaving. Eight percent of middle earners and 7% of lower earners cited feeling stuck in their job as a reason for leaving their role, while 1% of higher earners said the same.
• About one-in-four (26%) higher earners and 18% of middle earners cited financial opportunities and company or role specific reasons (47% and 38% respectively) as why they left a job. 
  • Lower earners were less likely (7%) to cite financial opportunities and company or role specific reasons (35%) as why they left a job.

Lower and lower-middle earners continue to struggle with balancing the demands of work with childcare needs, per collected data from June 2022. 

Amid a tight labor market, childcare continues to impact work capacity for many, falling most acutely on lower earners, especially women and people of color. 

• Childcare has affected work capacity for many, especially lower-middle earning women and people of color, who already tend to spend more time on household duties. Among lower-middle earners with children, 45% of women say they are working less or have stopped working altogether because they have children at home, compared with 41% of men in the same income group. In addition, lower-middle earning Hispanic (50%) and Black (42%) respondents with children are more likely than White lower-middle earners (41%) to say they either have stopped working or are working less than before the pandemic because of childcare challenges.

As Americans’ experiences at work continue to shift, workers take the reins.

Amid the shifting tides in labor, Americans express a hands-on attitude in regards to their aspirations and future. Many Americans believe they deserve a raise, and considerable shares of Americans have turned down work because the salary or work life balance did not meet expectations. Lower-middle earners, particularly Black and Hispanic respondents, are particularly likely to be seeking out new work. 

• Regardless of current employment status, Hispanic lower-middle earners are nearly twice as likely to be proactively looking for a new job compared to White respondents in the same income group. Forty percent of Hispanic and 28% of Black lower-middle earners say they have proactively applied for a new job in the past month or have applied to a job someone else reached out to them about. By comparison,18% of White adults in the same income group have taken the same measures.
• Lower earners are more likely to have applied for a new job in the last month than higher earning groups. Twenty-four percent of lower earners say they have proactively applied for a new job or applied to a job someone else reached out to them about in the last month, compared to 18% of middle earners and 16% of higher earners.
• Of Americans who turned down a job offer in the last month, one-in-five did so because it did not meet their salary or benefits expectations, and roughly one-in-ten did so because it did not meet their desired work life balance. Twenty percent of Americans who turned down a job in the last month did so because the salary, benefits, and/or job title did not meet expectations, and 13% attributed it to insufficient work life balance. For another 13%, their current company provided incentives for them to stay.

Amid two years of unprecedented shifts in the labor market, American workers continue to express a desire for change – resulting in some leaving what’s familiar to take on new jobs entirely. For some of these Americans, the ability to obtain greater financial rewards led to their departure; for others, family, health and work-life balance necessitated the change. 

 

Methodology

Since April 2020, the Capital One Insights Center has conducted studies with a nationally representative group (2-10K) of U.S. respondents covering a range of topics. This data, collected June 2022, is self-reported from anonymous respondents across the U.S. Respondents may or may not have relationships with any number of financial institutions and products.

The study divides these Americans into three income groups: lower earners making less than $25,000 in household income (HHI) annually; lower-middle earners making less than $50,000 HHI; middle earners making $25,000-$100,000 HHI; and higher earners making $100,000 or more HHI. 

Race-ethnicity categorizations of White, Black and Hispanic groups are self reported and based on US Census definitions.

About the Capital One Insights Center

The Center combines Capital One research and partnerships to produce insights that advance equity and inclusion. As a nascent platform for data and dialogue, the Center strives to help changemakers create an inclusive society, build thriving communities and develop financial tools that enrich lives. The Center draws on Capital One’s deep market expertise and legacy of revolutionizing the credit system through the application of data, information and technology. 

Disclaimer 

This material has been prepared by the Capital One Insights Center, a non-partisan center for objective research and insights, and is provided solely for general information purposes. Unless otherwise specifically stated, any views, analysis or opinions expressed herein are solely those of the Capital One Insight Center’s staff, researchers and listed partners (if applicable) and may differ from the views and opinions expressed by Capital One Financial Corporation, other departments or divisions of Capital One Financial Corporation, or its affiliates and/or subsidiaries (Capital One). Information has been obtained from sources believed to be reliable. 

The data relied on for this report are based on self-reported survey data from anonymous respondents across the U.S. Survey respondents included may or may not have relationships with any number of financial institutions and/or products. Capital One Insights Center does not know, nor is it able to determine, if any of the survey respondents have a relationship with Capital One. Certain information herein is also based on data obtained from third-party sources believed to be reliable. 

Analysis and conclusions constitute the Capital One Insight Center’s judgment as of the date of this report and are subject to change without notice. Furthermore, the analysis and views will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring, after the date of publication. 

Any opinions expressed herein should not be construed as an individual recommendation for any particular customer or client and is not intended as advice or recommendations of particular securities, financial instruments, market conditions or strategies. Capital One Financial Corporation and its affiliates and/or subsidiaries may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.

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_{¹ The quit rate measures voluntary job leavers as a share of total employment, which remained near a record 2.8% in May 2022. Source: U.S. Bureau of Labor Statistics.}

_{² Company or role-specific reasons is an aggregate of the following responses: Work/life balance (13%), company culture (7%), need a change of pace (6%), feeling stuck in their job (6%), wanting a job with more purpose (4%), the company's approach to remote work (3%), or the belief that they would “be fired anyway” (2%).}