Workers are increasingly leaving their jobs voluntarily. This restlessness can be attributed to a combination of factors, including the low unemployment rate and a structural problem in certain industries, such as the hospitality sector which is largely staffed by low-paid, low-skilled young people. High turnover can be disruptive for employers, with costs particularly high for high-skilled workers. A recent survey suggested that a combination of hiring costs and lost productivity added up to $150,000 per departing employee.
One of the main reasons for high turnover is the low unemployment rate. When the job market is strong and unemployment is low, workers feel more confident in their ability to find a new job. As a result, they may be more likely to leave their current job in search of better opportunities or compensation. Additionally, when the job market is strong, employers may also have a harder time retaining employees as they may be more likely to be poached by other companies.
Another reason for high turnover is the structural problem in certain industries. The hospitality sector, for example, is largely staffed by low-paid, low-skilled young people. The industry’s annual job turnover is as high as 90%. This high turnover rate is partly due to the nature of the industry which requires a large number of low-skilled workers and is often not viewed as a long-term career option.
Disruption!
High turnover can be disruptive for employers. A certain amount of churn is good for bringing fresh blood into a company; but anything over 20% a year can be disruptive; even in low-skilled jobs, replacing workers can be expensive. The post must be advertised; managers spend time interviewing; new workers take a while to learn the ropes.
So how can companies hang on to their staff? An obvious answer would be to pay more than the competition. Despite low unemployment, overall wage growth has not risen much in America, perhaps because a large army of discouraged low-skilled workers have been rejoining the labour force. Given the shortage of high-skilled workers, those employees ought to be in a strong negotiating position, but even among them there is little sign of a surge in compensation.
Another approach is to convince employees that the company has a positive social impact. The idea that a business can help a community wider than just shareholders and customers has been dubbed “inclusive growth”. It may sound woolly but, according to a recent survey, 38% of businesses have found that inclusive-growth initiatives boost employee engagement, encourage them to stay and bring more talent in.
Technology can help!
Technology can help managers identify potential quitters is through communication analytics. By analyzing the communication patterns of employees, managers can identify individuals who are communicating less with their colleagues, or who are less responsive to company-wide communications. This can be an indication that an employee is disengaged and may be considering leaving the company.
Overall, technology can aid managers in identifying individuals who may be planning to quit by providing data-driven insights into employee engagement, communication patterns, and performance metrics. This information can help managers address potential issues and retain valuable employees.