For years now, we have been forecasting a significant uptick in employee turnover. With unemployment worldwide at some of the lowest levels in years, employees are jumping ship in record numbers – because they can find other positions without difficulty.
The “Perfect Labor Storm” is Here
According to a recent article in The Wall Street Journal, workers in the United States are leaving at the fastest rate since the low unemployment in early 2001. The reasons are clear: a strong economy and record-low unemployment. The “perfect labor storm” (forecast by Ira Wolfe) expected 20 years ago is finally here. To help to understand the magnitude of this issue, the U.S. Labor Department reports 3.4 million workers left their jobs voluntarily in April. That is double the 1.7 million who were laid off or fired.
Quitting is Hot
Job-hopping seems to be affecting all industries. Whether we are looking at retail, food service or construction, all are experiencing the impact on their workforces. Not surprisingly, according to the Federal Reserve Bank of Atlanta, people who changed jobs in May enjoyed about a 30 percent hike in annual pay boost over those who stayed in their jobs over the past year. The group doing the most job-hopping is the younger workers. The U.S Census Bureau says about 6.5 percent of workers under the age of 35 changed jobs in the first quarter of last year versus 3.1 percent of those ages 35 to 54.
Employers Must Take Action Right Away
Many employers are already in a critical position, needing to act immediately. They have already experienced problems recruiting the skilled workers they need; many positions stay open for months at a time.
What Employers Must Do ASAP
Establish clear, consistent expectations so people know where they stand and how to be successful in their jobs every day. Train supervisors and executives and coach them to be good leaders. (Remember, people join companies and leave bosses.) Make sure people know where they stand with their immediate supervisors on a daily basis, through performance feedback and/or software that facilitates these relationships.
Other Intangible Factors Important to Today’s Workers
Create an environment in which people feel free to share their ideas – and their feedback – about what is working and what is not. Ensure you have the right people in the right jobs to utilize their skills to the fullest. Consider what is fair for long-tenured employees, when you bring on new workers. Keep your people up-to-date by giving them frequent opportunities for education, training and development. And finally, do not overlook the need to make sure people understand their total rewards/value proposition – including salary, bonuses, perks and benefits.
The War for Talent has Once Again Resumed
With many countries discouraging the immigration of workers and the current skilled labor shortages, combined with the record numbers of retiring baby boomers, employers are in for more challenging times; they will do well to consider our advice in this Herman Trend Alert. To ignore this advice will be, at best, “unwise” and at worst, “suicidal.” Without workers to make products or serve their customers, companies will not survive.
Special thanks to HR Exchange Network for bringing this important issue to our attention. To read the entire Wall Street Journal story, click here.