Some of our most popular posts on TLNT are about how the improving employment situation and economy will wreak havoc on those companies that are concerned about retention.
The latest survey comes from Mercer and it is probably one of the more detailed out there (with 30,000 plus respondents in 17 countries) and it doesn’t show a pretty picture. One in three want to leave their job. The exodus is coming.
Or so we’ve been told. With that in mind, there is also something related to the survey that didn’t get much attention until I saw it in The Wall Street Journal: Only 1.4 percent of employees voluntarily left their jobs in April (that’s 16.8 percent annualized for those that play like that). And that number hasn’t changed much from 2009 and 2010.
So what’s the big hubbub about?
The chicken or the egg?
The reason that there hasn’t been a mass exodus so far is pretty clear: labor supply is still high while demand is still suppressed. Job openings have come up since they hit rock bottom but they still aren’t anywhere close to pre-recession levels. The same story goes for unemployment where it has struggled to drop below 9 percent (about double what it was during the pre-recession low).
One of these things (and likely both) will have to move significantly before any possible major turnover is going to happen. For those truly concerned about the impact of turnover, this is a good thing. For those who have felt taken advantage of by their employer during the recession, the frustration will only continue.
I know several people in some pretty niche industries that are feeling that pinch, too.
Jobs are a scarce commodity
If you ask someone if they want a higher paycheck, most say yes. I stopped asking standard pay questions on employee surveys a long time ago. I started asking people if they knew what other people in similar jobs were making in the area and if it was higher, lower, or about the same. And we bought and later conducted our own compensation surveys to figure out where the market was.
Asking someone about their pay is a lot like asking them about whether they would leave their job. It assumes that there is a perfect job out there ready for the taking — one that aligns the pay, location, duties and industry in a way that makes leaving an easy thing.
Obviously, not too many people are getting those kinds of offers, much less a “Godfather”-like offer that would lure the most passive of candidates out of their comfortable offices. But does that mean the concern should be over?
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Should there be concern at all?
Some turnover is healthy. Losing 10-20 percent of your workforce that was a bad fit isn’t the ideal (you should have recruited and placed better), but it isn’t the worst thing that could happen. But having 1-2 percent turnover of your most critical people can be the real killer.
And the problem is that these critical turnover pieces can happen at anytime. It’s a good news/bad news sort of thing: if your top talent hasn’t moved already, it’s probably a better sign than you thought. Then again, they could move at anytime. That means the retention battle is on no matter the season.
As a means of waking up employers who may be taking advantage of the recession, it might work. For employers who are treating employees right and who are above the median in most employment categories, should there be any concern about turnover beyond what is normal?
Businesses slow to move, too
Let’s also not forget that the recession has left businesses gun-shy in the employment market, too. While layoffs came swiftly, many business changes were put on hold. Products that were break even or were looked at to be phased out were put on hold as companies looked to reduce costs while retaining the precious revenue.
And let’s not forget that businesses hold on to sub-par talent too long, even during a recession. In talking with recruiters at the recent Recruiting Innovation Summit, many requisitions weren’t being recruited for as companies continued to focus on critical positions. If you’re a hiring manager who is looking to let someone go based on borderline performance issues and you have no guarantee that they will have time to find a replacement, what would you likely do? Probably not.
While I wouldn’t say to throw caution to the wind, I would say to look objectively and cautiously at surveys like this.