Yesterday’s Wall Street Journal presented More Workers Start to Quit. Workers voluntarily quit and reject the feeling that they are lucky to have a job.
This is the boomerang effect of companies cutting payroll costs to the bone, redistributing work to the smaller remaining staff, and leaving an environment where workers feel “lucky to even have a job”. This leaves little left for motivation and the result of these talent management strategies?
Some nuggets of interest quoted from the article:
- Before February, the Bureau of Labor Statistics (BLS) had recorded more layoffs than resignations for 15 straight months, the first such streak since the bureau started tracking the data a decade ago
- In a poll conducted by human-resources consultant Right Management at the end of 2009, 60% of workers said they intended to leave their jobs when the market got better
- The increase in employees giving notice is a product of two forces: 1) the natural turnover of employees leaving to advance their careers didn’t occur during the recession because jobs were so scarce and 2) the effect of the heavy cost-cutting and downsizing during the downturn on workers’ morale
- ~5,400 members of TheLadders.com, a job board for positions that pay $100,000 or more, responded to an April survey that asked how much more money it would take to convince them to stay if they wanted to leave. More than 20% said it would take a raise of more than $25,000. In all, about 50% of respondents said it would take more than $15,000
And the article presents the real cost:
- An 850-employee hospital in northern Florida, faced a 30% turnover rate in 2008, almost double the average for area hospitals. That dipped to 20% in 2009 as the economy suppressed voluntary departures, but the hospital still spent $3 million in 2009 on covering open positions, and finding and training new employees. The average search for a new nurse, for example, costs the hospital between $52,000 and $60,000
- Dice.com, a job board for tech professionals, asked members what could persuade them to stay in their jobs if they found another opportunity. More than 57% of the 1,273 surveyed said nothing could persuade them to stay. Of those who said they could be persuaded, 42% said they wanted a higher salary and 11% wanted a promotion
- It typically costs a company about half of the position’s annual salary to recruit a person for that job, but the cost can run up to several times that if the position requires rare skills
Short-term profits and tactical reactions over long-term strategy and managing your most important asset: human capital. This is a negative by-product of managing a company for Wall Street and quarterly results over long-term growth and health an ROI versus and ROT (return on talent).