If you think people are changing jobs more often, you’re right.
Employee turnover shot to its highest levels in nearly two decades in 1999, according to a survey conducted by BNA, Inc., a Washington- based specialty publisher. On average, 1.2 percent of the workforce left their jobs each month last year. And that doesn’t include departures due to layoffs, downsizing or departures of temporary staff.
Turnover increased from 1.1 percent per month in both 1998 and 1997, and just 0.9 percent in 1996. The survey found that turnover slowed toward the end of the year, which may reflect the anticipation of year-end bonuses or because hiring decisions often are postponed until the new year’s new budgets.
By industry, non-manufacturing firms – including those in the wholesale and retail, communication and utility industries – suffered a particularly sharp rise in worker attrition. Turnover averaged 1.4 percent of the workforce per month among these businesses, compared with 1.1 percent in 1998.
Departures increased at small companies, too. At firms with fewer than 250 workers, turnover increased from 0.9 percent per month to 1.2 percent.
Why the turmoil? The strength of the economy is one reason. If companies need hard-to-find workers, they will hike salaries, which increases the likelihood someone will leave a job for one that pays more.
Another reason is the loosening of bonds between employer and employee. Lower levels of loyalty – whether due to the layoff waves of the past decade or a shift in attitudes among Baby Boomers and Gen X-ers – mean that the prospect of switching jobs is now less stressful. Finally, more and more workers no longer tolerate bad bosses.
“Money and perks can be used to attract people to your company, but they can’t be used to keep people there,” retention consultant Dick Finnegan told CBS MarketWatch. “The biggest reason people give for leaving their job is because they are disconnected from their bosses or work situation. Good people simply won’t continue to work for a jerk or under unfavorable daily conditions, and that is a tough thing to fix.”
He says employee retention is driven by good bosses. Good pay and good benefits are important, but the real focus must be on making work interesting and establishing good managers, says Finnegan, who is author of the upcoming book “Taming the Turnover Beast.”
He cited a study by a high-tech economic development group in Pittsburgh that found four keys to retaining employees:
- Providing challenging work assignments.
- Developing clear career advancement opportunities.
- Creating high-quality leadership among managers.
- Fostering a favorable, positive work environment.
So how can companies retain workers, and thereby increase productivity and save substantial sums of money? Develop good bosses and hold them accountable. But that’s easier said than done.
Of course one not-so-subtle, yet very effective, way to encourage managers to reduce turnover is to tie their pay to it. Increase manager’s pay for keeping turnover low – or penalize them when turnover soars – and pretty soon we’ll start seeing some innovative approaches to employee satisfaction. And maybe even better bosses.
Article – Copyright 2000 Evan Cooper. Syndicated by ParadigmTSA
