Sound the Alarm: More People Are Quitting Than Being Laid Off

From the HR blog at TLNT. Photo illustration by
From the HR blog at TLNT. Photo illustration by

We’ve heard warnings about how our workforce is disengaged and being artificially kept in jobs due to fear of changing employers. And, we’ve heard that there is a hidden crisis of employee engagement that won’t reveal itself until it is too late to do anything about it.

In fact, John Hollon wrote recently that 77.5 million employees are ready to make a move. We’ve lost the hearts and souls of our workforce, and if we don’t act now, we’ll never get them back.

Now, buried in a Bureau of Labor Statistics press release from last week is a figure that should give pause to everyone: In August, 2 million people left their jobs voluntarily while only 1.8 million were laid off. That’s right, more people voluntarily left their jobs than quit and it has been trending that way for some time.

Doubtful conclusions?

Bob Rosner, a writer for Today’s Workplace, said that he doubts the numbers are people just quitting to get new jobs:

So exactly what is going on here? The Bureau of Labor Statistics believes that quit rates, “can serve as a measure of workers’ willingness or ability to change jobs” and that normally, “quits tend to rise when the perception is jobs are available, and fall when jobs are scarce.”

Sure some people move, get a better job, or retire. Having more people quit than are laid off still shouldn’t cover this many workers.

The BLS typically concludes that most voluntary quits are for another job or retirement, and I can’t disagree with that. Still, it is intriguing to me that this perception is being challenged. Who would voluntarily quit in an environment where there are still five job seekers for every job available? Are conditions really that bad in Corporate America to force people out?

Trending and what it means for retention

The concern for HR professionals continues to be the economy’s impact on retention. What I’ve heard anecdotally is that some high performers have been leaving and “dropping a bomb” on their employer that they haven’t seen for a long time. When the economy was better, it seemed as though good employees weren’t afraid to talk frankly about their expectations, pay, and other working conditions. It allowed adjustments to be made and for the employee to feel as though the company was responsive.

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With the economy in doubt, employees have been hesitant to be the squeaky wheel and complain — and you can’t necessarily blame them. So when they find a competitive job and move on, the employer is surprised (especially if the employee opens up in an exit interview, though that’s no guarantee).

The hope is that employees and employers alike will be more open to having the honest conversations that make the workplace better once they see that everyone has more options. When employers have options to hire staff instead of having them locked within competitors, and when employees have options for new jobs, it gives both parties less fear to discuss these issues and resolve them.

What’s going to be the spin on this?

As you might have guessed, I’m sure some are going to put an alarmist spin on this news. But with that spin, I’d also like to bring this down to two points. First, this has been the trend for the past year. In September of 2009, layoffs accounted for about 60 percent of the job separations, while voluntarily separations accounted for 40 percent. Since then, it has been rising steadily to where it is today (about 50/50). So, this shouldn’t come as a surprise to anyone following the figures closely.

Second of all, while movement is good, new job creation is still going slowly. Yes, great employees have options (they have all along, really) but the real positive that HR pros can use is that this is an opportune time to get honest feedback about the workplace and how people have coped through the recession. And if you absolutely need to hire a replacement (or new people), it shows people are more willing to move than they have been in a long time.


5 Comments on “Sound the Alarm: More People Are Quitting Than Being Laid Off

  1. In addition to quitting for a new position or retirement, I would add that voluntary quits also include going back to school for a trade or college education. About 1/4 of my voluntary terminations are to return to school of some sort. Our colleges are full of people who used to work full time!

  2. Interesting topic. Sad view is american companies and specially the VPs, Directors still have the feeling they can´t grow their COW (COst of Workforce) they keep promoting people, and at the end being frankly saying, sorry we can´t give you as raise. Talking franquily this is all bullshit, specially cos if one like me left the company this position will be replaced and the new employee will get at least the base pay. SO why Executives keep doing this stupid things?

  3. Even though companies are experiencing turnover, it’s still a great sign that employees have options. It’s appearing as if companies should still do what is necessary to retain their employees instead of treating them as if their company is the only option.

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