Guard Your Exits!
With the job market slowly recovering, brace yourself for a tidal wave of employee turnover.
Published April 2004
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COMMENT ON THIS ARTICLEBarry Goss is really turning on the charm around the office these days. He'll surprise top performers at Professional Project Services, his engineering firm based in Oak Ridge, Tenn., with a complementary fancy dinner at a local restaurant. When the company lands a big contract, all 225 employees are treated to an impromptu barbecue and beer bash. At least once a week, Goss sends laudatory e-mails to people who do a particularly conscientious job.
All this isn't just because Goss is a nice guy. More than that, he's trying to head off a potentially ominous workplace trend: an expected tidal wave of employee turnover. It's not hard to see why. Ever since the bubble burst about three years ago, anyone with a job probably felt lucky to have work at all. Fewer overall positions, meanwhile, have translated into demands for increased productivity, leaving many employees feeling overworked and stretched to the limit. And employers, faced with falling demand and dwindling margins, cut back on salaries, raises, benefits, and other perks. It all added up to a kind of human resources perfect storm. "Every survey says people aren't happy, but the talent has stayed put because there weren't many choices," says Beverly Kaye, author of Love 'Em or Lose 'Em: Getting Good People to Stay. "That's not going to be true for long."
To be sure, the labor market, though improving, is hardly on fire. But a number of recent surveys suggest that hiring is poised to pick up. According to the Bureau of Labor Statistics, some 112,000 new jobs were created in January, the best performance since the economy began pulling out of the recession in late 2001. Anecdotal evidence from headhunters suggests that the technology and pharmaceutical industries are headed for a hot streak. And in the January survey of the National Federation of Independent Business, 50% of respondents said they were attempting to hire new workers, and 17% said they planned to increase their total payrolls over the next three months. "Job creation is anticipated in every industry," says William Dunkelberg, the group's chief economist.
Thirty-eight percent of managers, supervisors, and team leaders say they plan to change jobs in 2004.
No CEO will argue with a job boom. But such an event, however welcome, could lead to unforeseen problems if companies aren't careful. Staff turnover is both costly and distracting, especially if a company loses its most valuable employees--something experts warn is likely to happen once the anticipated wave of job-hopping begins.
A December 2003 survey by CareerBuilder. com, for example, found that 38% of the directors, managers, supervisors, and team leaders surveyed said that they were likely to change jobs in 2004.
That would include people like a 50-year-old technology whiz in the San Francisco Bay Area who recently spoke with Inc. on the condition of anonymity. We'll call her Betsy. Before the tech-market imploded, Betsy was pulling down a six-figure salary at a major semiconductor company. Downsized in late 2002 and increasingly desperate, she wound up taking a job as a systems analyst for a large bank, even though it meant a $40,000 a year pay cut.
