Based on recent data from the Labor Department, Americans continue to leave their jobs at a high rate, extending the Great Resignation in 2022.

The ‘quit rate,’ according to the Job Openings and Labor Turnover Survey (JOLTS), was little changed at 4.3 million in February, down from December's revised sum of 4.4 million quits. That was the eighth straight month that job quits exceeded 4 million.

What has become known as The Great Resignation is being fueled by young adults. A recent survey by the Pew Research Center found that young adults under 30 (37%) are far more likely than older adults 30 to 49 (17%), 50 to 64 (9%) and 65 and older (5%), to have voluntarily left their job last year. Another survey by Microsoft found that 52% of Gen Z and millennial workers said they were likely to consider leaving their jobs this year. That’s up 3% from last year.

The research suggests that many of these young adults are not quitting to be idle. And Tim Rowley can vouch for that. Rowley, the chief technology officer and COO of PeopleCaddie, a digital talent marketplace that matches employers with professional contractors, said they are seeing a wave of young professionals entering the gig economy.

Rowley noted that historically, the contractor pool leaned more toward the semi-retiree who have had a ton of experience and just looking to dial back into their career or trying to find ways to supplement their income. That, he said, has eased dramatically in the past five years. “Now, you look at the demographics of the contingent of the labor pool and the largest cohort are the millennials and the fastest growing cohort are the GenZers,” he said.

These young adults have sought a different type of career where they have a lot more flexibility and control, Rowley said. He said the pandemic forced many of them to work remotely or in a hybrid scenario over the last couple of years and they got a taste of what that flexibility was like, and they have come to enjoy it and don’t want to give it up.

“Instead of looking to the elder and model what they do, they are charting their own course and they are rapidly hopping to the gig economy,” Rowley said.

He said like many other companies, the pandemic slowed growth at PeopleCaddie, but there was significant acceleration one year into the crisis. “A lot of people who had opted out of the traditional labor pool were coming in, the contract labor pool,” he said, noting that employers, too, were seeking contract help given the uncertainties of the pandemic.

In 2020, Rowley said PeopleCaddie's business grew by 70% and more than doubled to 150% in 2021. That growth, he noted, also is reflective of the growth in their talent pool. “The last couple of years we have been supply constraint more than demand constraint and the growth is in lockstep with the supply of contractors that we have been able to attract,” he said.

The Pew survey found that workers also walked away from their jobs because of low pay (63%), no opportunities for advancement (63%) and feeling disrespected at work (57%). Others left due to childcare issues (49%), lack of flexibility (45%) and not having good benefits such as health insurance and paid time off (43%).

Such grievances are usually a non-issue for contract workers who are not beholden to an employer. Assignments, Rowley explained, usually lasts three to six months based on the employer’s needs. And within that time, a contractor could make as much as they would in a year at a permanent job. “It’s that premium pay and the flexibility,” he said.

Contract work had not been in Kurt Texiera’s plans, but when the company he worked for began to struggle during the pandemic, the 30-somehing, with a background in supply chain who had worked for private equity firms for a decade, said he put his resume on LinkedIn and within a couple of months, recruiters including PeopleCaddie began reaching out to him. He interviewed with companies that were offering full-time jobs but, “I started to get the same vibes that I got from the company that I was looking to leave,” he said, adding that it was not until he spoke with a recruiter at PeopleCaddie that he felt a comfort for the contractor environment.

He recently accepted a one-year independent contract with a company in California. He is not sure how things will play out but for now, he is enjoying the flexibility and compensation. Texiera said he would usually work about 10 hours a day and given more responsibility and was not necessarily paid for it. Contract workers are paid for the extra time they put in.

Now, he works a 40-hour week, which he says allows him the flexibility to plan. “I am not having any surprises, it’s eight hours a day and I am off the clock,” he said, adding that he has time to spend with his family, which includes a three-year-old and a six-year-old. In fact, he noted that he works remotely and has plans to spend some time at the family’s lake house in New Hampshire.

As for benefits, Texiera said he had a good 401(k) plan and would get a decent bonus every now and then. But health insurance was a huge problem, he said, noting that for his healthy family of four, he was paying $800 a month and a high deductible. With Connecticut’s insurance marketplace, he was able to competitively bid for a far less price at roughly $60 a week, he said.

Rowley pointed out that W-2 contractors who work through an agency like PeopleCaddie have access to healthcare and other benefits through the agency because they are technically employees of the agency. Independent contractors, on the other hand, are on their own when it comes to benefits, but Rowley explained that they receive a premium, a part of which account for the fact that the employers are providing benefits to these contractors.

In addition, Rowley said the employers also pay a risk premium because the contractors are assuming greater risk than the traditional permanent employee. They are getting paid additional money with the intention that they will be able to cover their benefits costs and save for retirement.

Rowley noted that while there are several attractive features tied to contract work, it may not be the right path for some. He noted that many contract workers build relationships at that company and secure long-term positions. “It’s a viable way to get your foot into the door,” he said.

“But before anyone makes that leap to contract work, I advocate that they do their homework because there is a bit more risk and they have to manage that risk,” he said, explaining that they should make sure that there is consistent demand for their particular skill.

Sasha Guan, a longtime gig worker agreed. The California resident, an auditor, has been doing contract work through several agencies since 2012, when she was in her early 30s. For now, she is with PeopleCaddie. Prior to contract work, she had worked full time in the industry.

Guan said she bought into the gig economy because she wanted control of her work/life balance. It was good for a while, as she was able to travel the world during that time. But over time, Guan said she became discouraged because she was not growing in her career. She said she was getting assignments at the Big Four accounting firms, but they were always ‘senior’ roles for workers with three to five years of experience, and she had almost double that.

“So, you could get stuck doing very mediocre stuff and you don’t actually get to build up your resume,” Guan said, adding that developing seniority within a company matters if, and when you decide to apply for a senior management position. Otherwise, she said, “you’re always going to be moving horizontally.”