May 2010 NEWSLETTER

Some of you may have seen the Wall Street Journal article "More Workers Start to Quit" that came out last week regarding the turnover in employment. In case you haven't here are some excerpts from the article that cite what I think is an extremely interesting trend that we saw coming and predicted as far back as two years ago! Our September 2009 Newsletter, http://bit.ly/WTSep2009, discussed our findings at the Houston Chapter of the Society of Maintenance & Reliability Professionals' Maintenance & Reliability Symposium. The overwhelming consensus of a discussion panel was that we would reach the end of the downturn in late 2009 and there was a definite indication that the momentum was swinging upward toward significant business recovery by mid 2010. What we continue to hear and see is that the market is improving, companies are hiring, and competition is alive and well.

More Workers Start to Quit
"As the job market begins to loosen up, human-resource managers might increasingly be surprised by an announcement from employees they haven't heard in a while: "I quit." In February, the number of employees voluntarily quitting surpassed the number being fired or discharged for the first time since October 2008, according to the Bureau of Labor Statistics. Before February, the 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. And recent sentiment indicates that the number of employees quitting could continue to grow in the coming months. 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 research is fairly alarming for employers as the "churn" for companies could be very costly.

Executive search and staffing firms are preparing for a massive reshuffling of talent at all job levels in all industries, as the recession earlier this decade was so short and shallow that the turnover this time around is likely to be much greater. This increase in employees giving notice is a product of two forces. First, the natural turnover of employees leaving to advance their careers didn't occur during the recession because jobs were so scarce. This created a backlog of workers waiting for better times to make a move to better jobs. During the recession, even if they heard of an opening, employees were reluctant to switch employers. The idea of moving when the world was already in uncertainty was quite scary. But those hang-ups are disappearing, and employees are becoming more receptive to being recruited and are beginning to tap their networks again for signs of opportunities.

Another factor making it harder for companies to retain employees is the effect of the heavy cost-cutting and downsizing during the downturn on workers' morale. A survey conducted last summer found that the drivers of the drop in job fulfillment included less satisfaction with wages and less interest in work. In 2009, 34.6% of workers were satisfied with their wages, down more than seven percentage points from 1987. About 51% in 2009 said they were interested in work, down 19 percentage points from 1987.

Employees feel disengaged with their jobs, which is going to lead to a lot of churn as we come out of the recession. Many talented professionals who nine months ago felt trapped because of economic conditions and didn't want to lose sure-thing positions, but now feel they're able to move on.

In the late 1990s, companies that were losing employees started to offer concierge services, discounted lunches, and hiring bonuses in a mad scramble to keep employees and recruit new ones, a trend that could come back if the job market continues to improve. But this time around companies might try to deal with more nuanced employee requests, such as lowering stress at work, improving work-life balance, and creating more opportunities for career advancement within the company.

For some employees, it might be too late. 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."

To read the full article, please click on the following link http://bit.ly/moreworkersstarttoquit