Let’s face it, the economy has been in a downturn for a good while now, and few of us have been giving much thought to employee retention. But that’s a huge mistake, because a literal flood of turnover is about to take place. Smart managers and HR professionals need to start preparing for it right away. The reason turnover rates are about to explode include:
- New job opportunities. Capital spending is already increasing and that means significant increases in hiring are right around the corner. As more employment opportunities open up, people who have been locked into their jobs for the last three to four years will begin to see a way out. Recent surveys show that between 20% and 37% of the current workforce will start looking for new jobs when the economy turns around.
- Pent-up frustration. Many current employees are less than pleased with the way they have been treated during the downturn. They are facing increased job burnout as a result of years of overwork due to layoffs, de-layering and downsizing. This pent-up frustration will cause an increasing number of employees to look for greener pastures once opportunities open up.
- The delayed job search factor. The job security fear that has gripped most employees in the U.S. for the last three to four years will begin to ease soon and delayed job searches will begin. The trickle today will be a gusher tomorrow.
- Memories of the boom. Most employees lost their company loyalty and learned the value of the continuous job search during the mid 1990s. Unfortunately for managers, employees liked the freedom of that era and many are eager for it to return. When it does, the “forced” loyalty that employees have had for the last few years will evaporate as fast as a summer rain in the desert.
- Easy job search. It becomes easier everyday to find and apply for job openings due to the growth of Internet “job boards” and corporate job sites. Because more individuals now feel comfortable using the Internet, the number of current employees who will find the time to look for an outside opportunity may be double what it was at the beginning of the last boom in the 1990s.
- Mergers. As the economy and the stock market improve, industry consolidation will increase and the increase rates of mergers and acquisitions will result in more pressure to jump ship because of the uncertainty caused by these transitions.
- Globalization and offshoring. As the economy improves, employee fear of offshoring and outsourcing will cause even professional-level individuals to consider shifting to smaller and medium-sized firms where offshoring and outsourcing are less likely to occur. An increasingly global job market also means that the best employees will be able to seek jobs with whichever company or in whatever region improves the fastest.
- Expanded corporate recruitment efforts. As recruiters are rehired, top candidates will again start getting calls offering them new opportunities.
- Leadership gap. The upcoming large wave of baby-boomer retirements will further compound the normal turnover flood in the middle of the organization by increasing losses at the top also. If these leadership positions are not filled quickly and wisely, the lack of leadership will lead to further disillusionment and more retention problems in the middle of the organization.
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Contingent Workforce Strategy Survey With ERE and Aptitude Research
Conclusion Most firms have by now long forgotten any of the lessons they learned about retention during the 1990s. Many managers have grown arrogant because the last few years of high unemployment guaranteed that most employees would have to take whatever they dished out. Over 75% of firms have no separate retention department, and most HR retention systems are either rusty or have been dismantled altogether. The time to act is now ó before the job market opens up ó because employees see acts of kindness (retention efforts) as more sincere when managers are not being forced to act by the raging job market. Begin today to identify the individuals who are likely to be at risk of leaving and develop action plans to keep them challenged and growing. Plan B is, unfortunately, to revisit your (also probably out-of-date) succession, replacement planning, and recruitment processes so that you will at least be able to replace the employees you lose because you waited too long to begin your retention efforts. If talent managers do not take action soon, that swooshing sound you hear will be the sound of 25% of your employees walking out the door.