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The Door Is Opening and People Are Leaving

by
Kevin Wheeler
Jul 6, 2011, 5:22 am ET

There is going to be an exodus of workers soon from businesses all across the U.S. It seems that for all the work recruiters do at the front end, organizations are undoing it at the backend. Frustrated employees are seeking new opportunities in record numbers, but if you are prepared, your talent shortages may be over.

Earlier this week, Mercer released its What’s Working survey that found that “one in two U.S. employees [are] looking to leave or [have] checked out on the job.” Other surveys support these findings, including ones by Right Management.

Is this simply the grass-is-greener syndrome, or is there something else going on? Even though there are plenty of jobs for certain types of people — Amazon is adding 5,000 people, and McDonald’s, Google, Facebook, Microsoft, and Apple are just a few others that have announced fairly large hiring plans — we are not actually out of this recession, and changing jobs is a risky business.

While money and benefits are not the primary reason people leave their employers in normal times, these times are very different.

This recession has lingered longer than most and is impacting a generation of workers who have not suffered much from recessions in the past. Their tolerance is different, and so are their expectations.

Today I think there are four primary drivers of these rather frightening statistics. And these same reasons will eventually drive away the new people you recruit as well, unless you are candid and realistic right up front with the candidates.

The first driver is actually pay this time. For many employees it has been a long time since they have gotten much in the way of a pay increase. The recession is often used as a reason for not granting reasonable increases, and managers have been more focused on performance — of lack of performance as a way to hold down these increases.

Yet, employees see their organizations making good profits and in some cases even record profits. Corporate coffers are flush with cash, yet this has not translated into significant pay increases. At the same time, option grants have shrunk due to changes in how they are taxed, giving some employees even less reason to stay.

Employees perceive a unfairness in how they are paid compared to how firms are profiting.

Second, and not completely separated from pay, is the amount of work that is being asked of employees. Many people I speak with are really doing what two or more would have done prior to this recession. Managers have asked for more and gotten it as employees fear there are few other jobs.

Yet the perception about jobs is changing, and many are starting to make a move if for no other reason than to lessen their workload or find a more flexible employer.

A third growing issue is the attitude younger workers, especially those in the Gen Y category, have about work. They feel their personal freedom is threatened by restrictive social media polices. And they are unhappy with the unwillingness of many firms to allow flexible working hours. They are also inclined to want open, authentic cultures and this recession has caused firms to tighten up communications, keep more secrets, and allow much less open discussion. This is all negative to the younger folks who will seek out more open and flexible environments.

A fourth element is lack of development. Many surveys have pointed out that Gen Y in particular, but all of us at some time, want to take on new responsibilities and learn new skills. During the recession organizations cut back on training and limited development opportunities. In some cases when development was available no one could take advantage oif it because of high-demand work requirements that left no time available. This has resulted in frustrated and bored employees who are looking for a change.

In reality, it’s not hard to see why these surveys are showing a potentially devastating amount of turnover about to happen.

I also realize that while there may not be a lot you can do about these things; there are always creative tactics that can help. Here are some thoughts.

First of all, make internal mobility the most important thing you focus on. Helping employees find new positions may be the best and most direct way you can influence them to stay. Yet, most organizations either erect numerous bureaucratic hurdles that make moving around tough, or they simply do not offer any simple way for an employee to learn about possibilities.

The intranet or some other internal website should be designed so that employees can learn about open positions and can apply for those positions. Work with HR to take down barriers and make it as easy to move between positions as it is to move outside the firm. This probably means that many current practices will have to change. Organizations with low turnover generally follow several rules that guide the internal application and transfer process.

  1. Employees should be able to interview for new positions without permission from anyone.
  2. They should not have to complete any sort of application form, and resumes should be very simple, if used at all.
  3. They should be able to leave their current position within a maximum of two weeks after accepting another offer — even if their old position has not been filled.
  4. Salaries offered should be similar to those an external hire would receive.

Second, help hiring managers reposition jobs to match the available skills rather than seek out only those who are perfect fits.

Don’t go for the exact match. Encourage hiring managers to be more open to giving internal candidates an opportunity. Exact matching is expensive and pays little in return. No one is good enough at predicting what the exact set of skills are going to be for every project and job. Hiring internal people with basic qualifications is often the better decision as these people not only bring enthusiasm and freshness, but also fit the culture. Recruiters need to encourage managers to experiment and realize that most of us are not doing the exact job we were trained to do or even the work our degrees prepared us for.

And, finally, be open with potential candidates about what’s going on in the company.

When you set realistic expectations up front, you lessen the disillusionment that will come after the new hire starts. Strive for authenticity. Encourage them to talk to employees who are happy and engaged. Make sure candidates are good culture fits and that they are fully informed about the work they are going to be expected to do.

Working with the hiring managers is key to success, as talent shortages are partly caused by lack of imagination. Jobs can be tailored to fit candidates, job descriptions can be changed, and managers can be flexible. It takes negotiating with them and providing them information about what’s going on. Turnover may happen, but you may be able to lessen its impact or bring in new people better fitted to your culture.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Mel Kleiman Csp

    The interesting questions is. Are the 50% of the companies that employees want to leave the same 50% of the companies that new employees are going to be looking at to go to work for?

  2. John Lake

    I’ve been telling every leader I come in contact with about this situation for the past two years! It seems we are blowing the trumpet, but no one is listening – or no one really cares right now.
    What’s going on? Any thoughts?

  3. Thomas Mulhearn

    A great post. I believe that the consummate cause is that since the recession began employers have applied the principles of supply chain management to their workforces. Unfortunately, people are not just units of labor. Not to be too prosaic about it, they have dreams, aspirations, feelings and expectations. It’s the same mindset that has tried to remove the “human” from “human resources”.

    There is a certain amount of turnover which occurs naturally every year. And this is a good thing because it results in transmitting new ideas and paradigms throughout the economy and minimizes inbreeding.

    However, since the recession began in 2007, employees have had nowhere to turn. They feared for their job stability and there was no where else to go. I have observed so much pent up demand to change jobs that, once it comes, it will be like a tsunami of turnover … IMHO

  4. Wray Broskow

    I agree with most of what is written here – this process is just beginning. One huge mis-conception that most of Corporate America (or at least Chicago) seems to have is that there is high unemployment and therefore the market is “full” of great talent. The reality is, not true. This is probably one of the toughest candidate markets I have seen in better than 18 years in the business. Companies – be prepared, when the flood gates do open, the competition will be fierce – as if it is not already…..

  5. Keith Halperin

    Thank you, Kevin. So, lots of people are disenchanted and demoralized, and they want another job? Well, “people in Hell want ice water, don’t mean they’re gonna get it” as the saying goes. Where are these “huddled masses yearning to breathe free going to go? We’ve got 9.0% unemploymernt and if McKinsey is right(http://www.bnet.com/blog/financial-business/mckinsey-us-job-market-won-8217t-rebound-for-years/14326) the UR is likely to stay quite high until 2018 or later.

    Since the US has a higher unemployment rate than the most developed economies (with the exception of France and Finland), and as it s unlikely to come down significantly for several years, I can imagine that a decent number of college-educated young people below the “Fabulous 5%”(we always crow about), who have poor domestic career prospects (along with probably sizeable education debts) would be willing to try out working in some of these places like Canada, Australia, New Zealand, UK(!), Germany…Meanwhile, employers will continue to howl about the “War for Talent” and be unwilling to consider anyone except the “Fabulous 5%” who most of them can’t get anyway because they’re too cheap and arrogant.

    Cheers,

    Keith

  6. What is Driving Employees to Want to Leave Their Jobs?

    [...] Wheeler, in a post over on our sister website ERE.net titled The Door is Opening and People Are Leaving, uses the What’s Working survey to make the point that,  ”there is going to be an [...]

  7. Michael Rosmer

    This comes back to a similar on-going issue in the area of HR…good real time metrics (to actually know what’s going on with your workforce on a day to day basis and make adjustments to suit) and building a culture with processes of building teams (one huge distinction I think organizations miss is focusing on people instead of focusing on teams, which comes down to the sports analogy, the All-Star team still loses because their stars don’t work well together, we hear a lot of talk today about hiring the right people but we need to pay more attention to what we do with them once we hire them).

  8. Felipe Villasenor

    The exodus of employees once the market turns is going to be messy for Employers and Job Seekers alike. Companies know this is going to happen since compensation has been depressed (also affecting employee morale), but even if Corporate HR had a retention plan in place and was able to execute it throughout a corporation, I doubt that many are empowered to do so. Retention costs money and some companies take the path most traveled which is “penny wise, dollar foolish” because they want to report the most operating profit to shareholders in the “short term.” However, when the economy turns employee retention must be confronted and it’s going get expensive.

    As always, great article.

    -Felipe

  9. Ron Mcmanmon

    If you want to recruit and retain talent show them the light at the end of the tunnel, or, they will find it on their own… eventually.

    My take away: Promote within and compensate fairly or you deserve to lose!

  10. Keith Halperin

    Retention? ISTM that most retention plans are like this:
    “If you’re unhappy and not part of ‘The Fabulous 5%,’ -Don’t let the door hit you on the way out!”
    Once again, this is a good thing for recruiters, because retention is bad for recruiters and churn is good- there’s job security in trying to fill a sieve, if the sieve owners can pay….

    Here’s a thought:
    I understand that American businesses have a lot of cash (~$1T or so) that they’ve been reluctant to spend either on increased capital expenditures or increased hiring. Let’s further suppose that their reluctance changes in the next several months to several years. (I think this is a fairly reasonable assumption.) However, let us further suppose that like the bailed-out banks before them, many major companies decide not to invest or hire (in the case of banks I guess it was “lend”), but decide instead to grow through MERGERS AND ACQUISITIONS. Net result: the big firms get bigger, the small get bought, and the middle ones get squeezed. A few thousand people get MUCH richer, and most folks don’t see anything happen, except the folks who get layed off in the process. Maybe the unemployment rate goes up a little.

    Waht’re your thoughts, Folks?

    Keith

  11. Mitch Sullivan

    Interesting article. As a UK based recruiter I see similar patterns over here, but wonder if it’s as endemic as it is in the US, as Kevin’s articles suggests. I suspect not, as we have more recent experiences of recessions and don’t have quite the same sense of entitlement as many Americans – although we’re getting there, again.

    I particularly agreed with the current obsession with finding the “perfect fit” when hiring. That trend needs to lose its popularity fast.

  12. Kelly Blokdijk, SPHR

    As a provider of job search coaching and resume writing for years, I’ve worked with plenty of professionals engaged in confidential job searches. Due to my HR perspective, I’m always intrigued by their motivation to leave their current employer.

    Even during this recession, the majority of clients have been currently employed – perceived to be passive – yet they can’t wait for the right opportunity to make a move.

    Reasons vary, but the main point is that companies are not doing enough to keep them engaged. Burnout, stagnant pay, lack of opportunity, fear of future business downturns along with feeling overworked and under-appreciated are the most common themes.

    @TalentTalks

  13. Keith Halperin

    In a 2009 article titled “Prepare Now Or Lose Your Best Employees Soon,” “Forbes” reports that research by Deloitte indicated a positive correlation “between consumer confidence and voluntary turnover” and a negative correlation “between unemployment rates and voluntary turnover rates.”….

    The Conference Board Consumer Confidence Index® Declines Again
    28 Jun. 2011

    The Conference Board Consumer Confidence Index®, which had declined in May, decreased again in June. The Index now stands at 58.5 (1985=100), down from 61.7 in May. The Present Situation Index decreased to 37.6 from 39.3. The Expectations Index declined to 72.4 from 76.7 last month.

    The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by The Nielsen Company, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for June’s preliminary results was June 16, 2011.

    Says Lynn Franco, Director of The Conference Board Consumer Research Center: “This month’s decline in consumer confidence was driven by a less favorable assessment of current conditions and continued pessimism about the short-term outlook. Consumers rated both current business and labor market conditions less favorably than in May, and fewer consumers than last month foresee conditions improving over the next six months. Inflation fears eased considerably in June, but concerns about income prospects increased. Given the combination of uneasiness about the economic outlook and future earnings, consumers are likely to continue weighing their spending decisions quite carefully.”

    Consumers’ appraisal of present conditions was less favorable than in May. Those claiming business conditions are “good” remained the same at 14.3 percent, while those claiming business conditions are “bad” increased to 38.0 percent from 37.2 percent. Consumers’ assessment of the job market was also less favorable. Those stating jobs are “hard to get” increased to 43.8 percent from 43.5 percent, while those stating jobs are “plentiful” decreased to 5.2 percent from 5.7 percent.

    Consumers’ short-term outlook, which had weakened in May, declined further in June. The proportion of consumers expecting business conditions to improve over the next six months declined to 16.4 percent from 17.2 percent. However, those anticipating business conditions will worsen decreased to 14.7 percent from 15.4 percent.

    Consumers remained pessimistic about the outlook for the job market over the next six months. Those anticipating more jobs in the months ahead declined to 14.2 percent from 16.7 percent, while those expecting fewer jobs remained unchanged at 20.3 percent. The proportion of consumers anticipating an increase in their incomes declined to 13.9 percent from 14.9 percent.

    The next release is scheduled for Tuesday, July 26, at 10:00 AM ET.

    For further information contact:

    Carol Courter
    at +1 212 339 0232
    carol.courter@conference-board.org

  14. Thyaga V

    Based on our own hiring activities I can clearly say that the job mobility has picked up in the jobs related to the technology.

  15. Arlene Daniels

    I’m gonna speak for a lot of young adults and say that most of us are switching jobs due to depression, lack of inspiration and the feeling of wanting to go after a career that’s well-suited for them/us. Btw, I read a good book lately about office depression (http://www.depressionatwork.com) and it’s been pretty helpful in giving me advice on dealing with my colleagues. Anyway, I hope the job market improves soon and offers more jobs for everybody.

  16. Keith Halperin

    @Arlene:

    I think you’re quite right, Arlene. I know what you’re feeling- I was in low-paid, dead-end soul-destroying jobs until I was 35, and millions or tens of millions of Americans are in those same types of jobs now. We need to do what we need to do to get by.

    Best of Luck,

    Keith

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