Good news, everyone! The job market continues to grow with significant upward trends across most industries notable and increases in construction, professional and technical services, and manufacturing. Jobs have been added each month this year, and unemployment has ticked down further and further, reaching 3.8% in May 2018.
The bad news: research shows that both employees who are dissatisfied with their current job and those employed but searching for a new job are more likely to quit as the availability of employment opportunities continues to rise.
In fact, a recent study concluded that the availability of viable alternative employment opportunities in the job market is one of the more important precursors to turnover.
Increasing job options in the marketplace spurs voluntary turnover.
More importantly, the study found that the state of the job market can make previously existing conditions even more likely to result in turnover. For example, employees who were considering quitting or were dissatisfied with their current job were more likely to quit when they perceived more opportunities in the job market.
The study authors recommend that organizations systematically study turnover over time and through multiple approaches to understand the root causes and factors that expedite turnover in their organization.
This is in line with recommendations made by the Society for Human Resource Management (SHRM), the Society for Industrial and Organizational Psychology (SIOP), and our own voice of employee model. We recommend that data be collected in the form of employee voice, or employee attitudes, perceptions and intents.
Employee voice refers to an employee’s ability to express concerns about the workplace, its policies and changes, and decreases in employee voice is related to increases in turnover.
The number of job options continue to increase for employees.
It’s important to note the state of the marketplace. In the 2018 Retention Report, we projected over 10 million employees would quit in the first quarter of 2018. In fact, over 13 million employees quit nationwide in the first quarter of 2018. This suggests that turnover may be worse this year than previously projected.
In this market, leaders must be aware that previously tolerable or “normal” work circumstances (e.g., unprofessional manager behavior, unfavorable schedules, routine stress, periods of lower job satisfaction, feeling withdrawn at work) are likely to increase their organization’s turnover.
Employers must know what is on the minds of their employees.
Although some employees do quit their jobs without an alternative, most employees develop intentions to quit and engage in job searches beforehand. This, along with the fact that 77% of the reasons for turnover could have been prevented, underscore the importance of understanding employee perceptions of their employer over time.
Organizational leaders can reduce turnover by collecting and using real data to diagnose and even predict their company’s problems. By keeping track of employee perceptions (e.g., employee voice) over the course of the employee lifecycle, organizations can predict intentions and retain more employees.
The market is fortunate for employees, who now have the luxury of choice. The market is unfortunate for employers, as they may lose good workers to competitors.
Data-informed decisions will become more necessary as the job market becomes increasingly competitive. Unfortunately, too many organizational leaders are unaware of why their employees leave or how to keep them.
The first step is to consistently make an effort to listen to your employees, find out what the reasons for turnover are, and take steps to prevent employees from leaving.
- BLS Employment Situation May 2018
- Lee & Mitchell, 1994; Lee, Mitchell, Holtom, McDaniel, & Hill, 1999
- Rubenstein, Eberly, Lee, & Mitchell, 2017
- Seasonally adjusted values