Whether you need workers to run a cash register, a construction site or a hospital unit, your job as an HR leader will be increasingly difficult based upon the May jobs report and seasonal turnover trends.
Competition to fill jobs continues to heat up as the demand for workers continues to outpace the supply of workers, and the heat will rise as turnover traditionally increases in the summer months.
Voluntary turnover rates typically decline at the beginning of each year, and this decline often prompts leaders to take a break from employee retention efforts. However, data shows us that quits heat up each summer, and with market conditions already heightened, voluntary turnover will only be amplified if leaders do not turn up efforts to get and keep workers.
Unemployment declines & job opening increases continue.
The unemployment rate continued its decline in May, as it reached a low 3.8%, according to the May jobs report. This latest report is the lowest unemployment rate since April 2000 and demonstrates the continued decline of the unemployed population.
While unemployment continued to decline, the number of job openings continued to increase. Job openings reached 6.6 million in May, up from 6.2 million in January and 5.7 million in December. The consistent increase in job openings signifies that the market and the demand for workers continues to grow. For the first time the number of open jobs is higher than the reported unemployed.
Job openings are not limited to a single industry. According to the recent jobs report, industries added jobs across the board, including construction, retail, health care, manufacturing, transportation, warehousing and more.
Voluntary turnover increases seasonally, further challenges employers to retain workers.
Voluntary turnover trends typically improve each February, and this improvement often spurs leaders to take their focus off employee retention – prematurely.
A review of historic BLS data shows that the quits rate spikes from March to August each year, consistently. Furthermore, our business consistently realizes a spike in the number of exit interviews conducted from March to August of each year, congruent with the quits rate.
In today’s competitive employee marketplace, leaders must be aware of the seasonal increase in voluntary turnover and not falsely believe their retention will consistently improve due to early year improvements.
The data demonstrates that employee retention must be a consistent, year-round focus. As unemployment continues to trend down, job openings continue to increase and seasonal upticks in turnover sets in, leaders must have an intense focus on employee retention in the coming months.
In a market where competition for workers is already hot, the heat of summer may push turnover to the boiling point. And, if you haven’t felt the heat to date in your industry, you likely will.