Termination at worker’s request exceeds 7 million in 2023; most people leave jobs seeking better opportunity

02/07/2024

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Carolina Reis — Foto: Ana Paula Paiva/Valor

One of the indicators of a tight labor market, termination of job contracts at the request of workers hit a record last year. A total of 7.3 million workers left their jobs at their own request in 2023, compared to 6.8 million in the previous year and 5.6 million in 2021. Official records began in 2004.

According to economists, the increase is a result of a larger number of people seeking jobs that are in alignment with their aspirations, a larger number of young people in the job market, and the methodology of the new General Register of Employed and Unemployed Workers (CAGED). The level of education is also an important variable. Highly-educated workers accounted for the largest number of resignations.

A survey carried out by LCA Consultores shows that Brazil had 21.5 million terminations of job contracts in 2023, 7.3 million of which were at the request of the worker, which is equivalent to 34% of the total. In 2022, there were 6.8 million resignations (33.6%), and in 2021, 5.6 million (33.4%). In 2020, the first year of the COVID-19 pandemic, resignations totaled 3.8 million (27%), in 2019, 3.6 million (24%) and 3.3 million (23%) in 2018.

“The indicator points to a tight [job] market. Most people are quitting their jobs probably because they are able to find positions elsewhere, which indicates an increase in job openings,” said Bruno Imaizumi, LCA’s economist in charge of the study.

According to him, in addition to the new CAGED methodology, which captures admissions and dismissals in a broader way, the numbers can be explained by the entry of young people into the job market.

“For that group, professional success means having a job aligned with their aspirations. If that is not happening, they [young professionals] keep switching jobs and won’t stay in the same company for the rest of their lives,” he said.

“Another reason is the COVID-19 crisis, which changed working relationships and brought to light other factors than just salary in the decision to move to a different employer.”

Lucas Assis, an economist at Tendências Consultoria, notes that the pandemic changed the dynamics of the job market. “Many workers are possibly reflecting on their career path and prospects, especially those working in low-paying jobs,” he points out.

Highly-skilled workers are the ones who quit the most, the LCA survey shows, indicating that the education level has a key weight when negotiating a job position.

The share of resignations compared to the total number of terminations last year reached 32.4% among workers with incomplete secondary education, 33.8% in the group that completed secondary education, 41.8% in the group with a higher education degree. Among those holding a master’s degree, that percentage reached 42%, in the group with a PhD, 40.9%, and in those with a complete postgraduate degree, 46.9%.

Public relations specialist Pedro Prata, 40, worked for more than two years at an electricity company. In 2023, he moved to the Ellen MacArthur Foundation, an organization promoting the circular economy.

“On the one hand, the new opportunity would allow me to work again with public policies and, thus, expand the impact of my work on the social, economic, and environmental fronts. On the other hand, it would give me greater autonomy, flexibility, and a work environment of trust,” he said. Mr. Prata notes that, in general, the pandemic has highlighted old problems in some work environments. “Disrespectful relationships, overwhelming volume of tasks, excessive controls, little freedom to express opinions. I have the feeling that, when working from home, many people realized how bad the environment in their offices was,” he said, based on his own experience.

“I think it’s important to be in an organization that combines the satisfaction of waking up to work with remuneration that is consistent with your delivery. It makes no sense to have job stability and emotional instability. Furthermore, it’s not about staying longer in the same place.”

Engineer Carolina Reis, 42, has similar opinion. “I don’t see staying in a single job for a long time as crucial. I value being in positions that resonate with my aspirations and that offer a healthy balance of personal and professional life,” she said.

Ms. Reis, who worked for 14 years as a business manager at Continental, is now in the middle of a career transition process. After three years and four months at Amazon, as an expansion and operations manager, she is now moving to Cummins, where she will serve as an executive sales manager. “The opportunity at Cummins is more aligned with my current career aspirations and personal skills,” she said. “[But] I am willing to reconsider my position if the work-life balance I seek is not achieved.”

Mr. Imaizumi’s survey shows that younger people were behind most resignations from formal jobs last year. Among young people aged 18 to 24, 39.5% of total terminations were at the request of the worker. That share decreases to 36.5% in the age group between 25 and 29 years old, and to 33.1% among those aged 30 to 39 years old. In the range between 40 and 49 years old, it falls to 29.7%. And even further among people aged 50 to 64 and over 65, to 24.7%.

Some of the activities that had a proportion of resignations higher than the average in 2023 were international bodies, human health and social services, education, accommodation and food, housekeeping services, financial services, car sales and repair, information and communications.

Among the regions with higher job quitting were the South (41.3%), Central-West (38%) and Southeast (33.7%). Among the states with the highest share are Santa Catarina (45.2%), Mato Grosso do Sul (43.8%), Mato Grosso (41.7%), Paraná (40.9%), and Rondônia (38.6%). The states of Espírito Santo, Minas Gerais, and Rio de Janeiro were below the national average (34%). The largest share of resignations is in regions and states that show better economic activity.

Hélio Zylberstajn, a senior professor at the Economics and Business School of the University of São Paulo (FEA-USP) and coordinator of the Salary Survey at the Economic Research Institute Foundation (FIPE), points out that the scenario is more favorable for those who quit than for those starting a new job.

One way to measure that is the salary pressure indicator, the ratio between the average salary of those who enter and the average salary of those who leave a job. For example, when the salary of someone entering a new job is R$900, and those who is leaving earn R$1,000, the salary pressure is 0.9. If someone who enters earns R$1,000 and someone who leaves earns the same, the salary pressure rises to 1.

A survey carried out by FIPE underscores the idea that the education level is directly related to mobility in the job market. The study shows that salary pressure for those with a higher education degree went up from 0.95 in 2022 to 0.98 in 2023. For those who hold a master’s degree, it went from 1.01 to 1.02, and for those with a PhD, from 1 to 1.04.

“The salary pressure for who resigned in 2023 is greater than in 2022. Those who left a job last year are getting better positions than in 2022,” Mr. Zylberstajn said. “The numbers reveal that there are opportunities in the job market, and the people who resigned in 2023 did better than in 2022.”

Despite the recent increase in resignations, the numbers are expected to decrease over the year.

“For 2024, the job market should slow down, in line with the loss of momentum in economic activity,” Mr. Assis points out. Tendências estimates a 1.5% increase in GDP this year. “The more intense acceleration of the labor force, compared to employment, should increase the unemployment rate. For the short term, the share of resignations is expected to fall.”

*Por Marsílea Gombata — São Paulo

Source: Valor International

https://valorinternational.globo.com/