Over the past few months, I’ve been tracking employee satisfaction vs. job hunting activity. Here’s the link so you can take the survey yourself, see the results, and forward it to others.
The idea here is that by tracking changes in satisfaction and the job-hunting activity level for the fully employed, we’ll have a leading indicator of employment churn.
Fully employed people switching positions with other fully employed people doesn’t do much for the national employment rate, but it can still keep a recruiting department extremely active. This employment churn becomes a problem when a company is forced to find a bunch of new hires to replace a significant number of tenured employees who have left voluntarily. This becomes a really big problem when it’s unanticipated and when it’s a company’s best people. Replacing them is then even more difficult.
The underlying cause of employee churn is similar to any financial or real estate bubble — greed, or the feeling of not wanting to be left behind. On the hiring side it’s nothing more than a few people getting better jobs, which leads to more people getting more active and finding better jobs, which in turn leads to even more activity, and so on, until you have a tidal wave or avalanche effect.
On the job-hunting side, it’s obvious that once a few new jobs are created, those who are fully employed, but most dissatisfied with their current jobs, will jump ship first. As these people are replaced, it will create a wave of job-hunting activity for those slightly less dissatisfied, and as these positions are replaced, even more people will start sensing the economy is recovering, and begin looking as well.
This churn will accelerate rapidly, as the pent-up demand for better jobs and salary increases is unleashed.
Based on our survey results, this could happen sooner than expected. These surveys are starting to indicate a decline in overall job satisfaction coupled with increased job hunting activity. None of this job switching will affect the overall employment rates, but this replacement activity will force corporate recruiting departments to gear up their activity level at a rapid rate. Things will be much worse if these replacement hires haven’t been forecasted.
The accompanying chart shows the decline in satisfaction over the six-week period from mid July to late August.
What’s most surprising is the decline is from the group of people who indicated just a few weeks earlier that they were extremely satisfied with their jobs. This has dropped from 21% to 13% in just a few weeks.
Those who indicated they were satisfied didn’t change much, with the biggest pickup in those who indicated they were neither satisfied nor unsatisfied with their jobs. This increased from 11% to 21%. Essentially, 40% of the group who were initially very satisfied with their jobs no longer feel this way.
What happened in two to three short weeks to cause this decline? keep reading…