I Quit

According to an article in Wall Street Journal, this announcement from employees is likely to increase now that the market begins to loosen up.

The article points at the number of employees who voluntarily quit their jobs in February. For the first time since October 2008, this number surpassed the number being fired or discharged, according to the Bureau of Labor Statistics.

Recent research indicates that the number will continue to grow. In a survey conducted by Right Management at the end of 2009, 60 % of workers said they intended to leave their jobs when the market got better.

This might be surprising to many, but in fact it should not be. Let us look back a couple of years. These are the findings from Boston Globe in 2004:

•          “83 percent of employees are likely to seek new employment once the economy improves”

•          48 percent of managers are likely to seek new employment once the economy improves

•          75 percent of those managers are actively looking now

•          56 percent of HR professionals indicated it is likely that voluntary turnover would rise due to the improving economy.

Employee engagement tends to fall at times when there are fewer employees to contribute to the tough job of keeping the company alive. This statement is also supported in the article in Wall Street Journal where a survey for the Conference Board found that the drivers of the drop in job fulfillment included less satisfaction with wages and less interest in work.

In 2009, 34% 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.

Let us combine this with the increasing shortage of talents.  In the United States, there are approximately 40 230 000 people over the age of 65. There are approximately 30 700 000 aged 18-24.

According to Financial Times (May 2009), 800 000 people aged 55+ have returned to the workforce due to the decreasing value of their savings and pensions. Many more are postponing their retirement for the same reasons. My prediction is that this group is temporary back, but will soon be out.

This could, and probably will, lead to:

•          Attrition boom

•          Retirement boom

•         Increased recruitment costs due to shortage of talent and severe competition

It is estimated to cost 30-50 % of the annual salary to replace entry-level employees, 150 % for middle level employees, and astonishing 400 % for specialized, high level employees.  Interesting times..