16 Oct Employee Turnover: A Major Challenge in Today’s Workforce
Workforce challenges vary by industry, location, and other differentiating factors, but rising employee turnover rates affect virtually all employers. Here, we’ll take a look at why turnover is such a significant issue in today’s workforce.
Millennials, who now make up the majority of the workforce, change jobs more frequently than previous generations. Compdata Surveys & Consulting tracked turnover rates from more than 30,000 US employers. Alarmingly, within the last seven years alone, voluntary turnover has risen steadily across all industries, increasing from 9.1% to a whopping 13.5% since 2010. That represents a 48% increase in voluntary turnover, clearly indicating the fact that employees are now in the driver’s seat in today’s highly competitive labor market. Gallup estimates Millennial turnover costs the US economy $30.5 billion a year.
While Millennial job hopping is one reason behind high turnover rates, employers must investigate other internal factors. It is helpful to track data to see who, specifically, is leaving the company. Areas of focus may be tenure with your company, generation (Boomer, Gen X, or Millennial), specific skills, departments, shifts and supervisors.
Analysis of data may indicate employees with specific years of tenure are leaving. This could indicate an issue with the rate at which employees’ pay advances through the pay range. Be careful not to jump to conclusions, because it could also tell you that after a certain number of years in your employ, workers no longer see advancement opportunities.
Identifying the loss of one generation over another could imply your benefits and perks are more appealing to one age group. Few employee benefits appeal to all age groups equally, so be certain your offerings support age diversity while maintaining company culture.
Consistently losing employees with a specific skill set can be costly and detrimental to productivity and continuity within a department. Decide if the difficulty is temporary (due to regional economic factors) or more permanent (due to national skill shortages) and devise a plan that focuses on retention.
Increased turnover rates within a department can be tricky because so many factors within the department are the same. Morale issues can develop from a sense of unfairness. If the department believes they shoulder more responsibility, you’ll fight low morale and high turnover until the perception changes.
Identifying a trend from a specific shift or manager requires more information before jumping to the conclusion you have a problematic supervisor. Higher turnover within one shift may indicate the differentials paid for that shift lag the market. Exit interviews are helpful in identifying weak managers or issues with departmental leadership. This difficult recruiting climate may be a good time to conduct stay interviews to identify problems before additional turnover occurs.
HRsoft is a leading provider of strategic talent management software that improves manager effectiveness and business results. Our full suite of cloud-based HR software solutions includes applicant tracking software, compensation planning software, total rewards software, stay interview software, performance management software, and content management software. To learn more about our Compensation Management Software, COMPview, click the button below!