Have you seen the news lately? Is it just me, or does it feel like everyone is reporting on the Bureau of Labor Statistics (BLS) data that shows that more and more employees are quitting their jobs? The reports say that the number of voluntary terminations is at a level not seen since 2008[i]. Should employers be worried?
For employers, this continued increase in voluntary turnover is worrisome for a few reasons:
- When employees voluntarily leave, there’s an increased risk of losing a star employee (as opposed to losing someone who was about to be let go). Obviously, this can have a ripple effect in which productivity is lost, and it takes longer to get the replacement hire up to the same productivity level of the previous employee. The cost of losing a high performer is higher overall for these reasons.
- The current job market has very low unemployment levels for most areas. This means employers are already in a situation where there are fewer applicants for any given vacancy, and they have been finding some roles difficult to fill. This could be exacerbated if more employees are quitting—leaving even more roles to fill in an already tight market for talent.
- The competition and relative shortage of labor is driving wages up, which many employers have not budgeted for. This means employers may find it even more difficult to fill positions if the market wage is above what they’re offering.
- Higher turnover, in general, means higher expenses for an employer due to the increased costs associated with needing to hire more new employees.
- Higher turnover also means that the remaining employees may not be as productive, since they often have to take on extra responsibility until the role is filled again. This, in turn, can decrease morale if it’s an ongoing problem—which can cause the turnover problem to get worse!
The Potential Upside
There are, fortunately, also a couple potential upsides for employers, but these may or may not outweigh the negatives depending on the employer’s situation. Here are a few potential advantages to a situation in which more employees are voluntarily quitting:
- Employers may be able to more easily persuade top talent to join their organization—even if that individual was not actively looking for a new job.
- It can be an incentive to change the organizational talent pool and improve the overall productivity level, but only if the organization is ready to take action—and only if the organization doesn’t lose top performers in the process.
Knowing that the unemployment rate is the lowest it has been in years is cause enough for employers to consider upping their game in terms of employee retention. Now, seeing that employees are doing as anticipated—quitting in growing numbers—any employer that has not taken action may find itself losing more employees than it would like.
What has your organization done to improve employee retention? What are your plans for the coming months and years to address this concern?
*This article does not constitute legal advice. Always consult legal counsel with specific questions.
About Bridget Miller:
Bridget Miller is a business consultant with a specialized MBA in International Economics and Management, which provides a unique perspective on business challenges. She’s been working in the corporate world for over 15 years, with experience across multiple diverse departments including HR, sales, marketing, IT, commercial development, and training.