Written by Tory Waldron
November 28, 2018
It’s the best of times for employees in the U.S., and the worst of times for HR professionals.
In both September and October 2018, the Job Openings and Labor Turnover Survey (JOLTS) reported a whopping seven million job openings and, with only six million unemployed workers currently looking for jobs in the U.S., the employment market is now firmly in the hands of workers.
With so many open positions, HR professionals find themselves in a race to attract, hire, and retain top talent for their organization.
Ten years ago, the economic downturn left workers feeling anxious about employment. The rate of unemployment was a whopping 10% in 2008, as companies felt the financial pinch of the market’s collapse and reduced their spending and worker base. Back then, with 11 million workers looking for employment and only 3.2 million open jobs, employers held all of the cards and employees found themselves in a limited job market, competing fervently against other skilled workers to find work.
But, now in 2018, we have reached an unemployment rate of 3.7% –the lowest it has been since 1969. The exodus of baby boomers, along with a healthier U.S. economy have turned the tables in favor of employees. And now, recruiters and HR professionals must fight tooth and nail to land top talent.
According to Salary.com’s 2018 Turnover Report, total workplace turnover in the U.S. hit a whopping 19.3% this year: a 22.9% increase over the past five years.
This graphic shows the rate of U.S. workplace turnover (all separations from the organizations including terminations) over the past five years. This year’s Turnover Report contains turnover data from nearly 25,000 participating organizations of varying sizes in the United States, ranging from companies with less than 100 employees to as many as 5,000+ employees. To make sense of these numbers, it's best to think of rates of turnover like this: 100 employees leaving an organization of 500 (a 20% turnover rate) is much different than 100 employees leaving an organization of 250 (40% turnover) or 100 employees leaving an organization of 1000 (10% turnover). Thus, this overall upward trend of turnover is quite significant, given the cost to replace an employee; recruitment, hiring, training, and slower production all impact an organization's bottom line.
With turnover increasing year-over-year, could the influx of Millennial workers be to blame? Millennials are known as the “The Job Hopping Generation,” but they are not the only generation that is jumping around. According to Gallup’s 2017 State of the American Workplace report, 51% of currently employed adults in the U.S. say they are keeping their eyes peeled for a new job. The same report found that 91% of employees say the last time they changed jobs, they changed companies to do so. This may be because of limited growth opportunities or mobility within their current organization. Or alternately, this high amount of turnover may simply reflect a financial motivation, as employees switch companies in an attempt to get a bigger salary bump.
In spite of a robust job market, decreasing unemployment rates, and an ongoing war for top talent, organizations still have a cautionary attitude toward budgeting additional funds for annual salary increases. Earlier this year, Salary.com’s National Salary Budget Survey found that annual budgets have remained at about 3% since 2011, despite an upward trend of overall organizational growth over the decade.
In a lot of ways this trend is worrisome. As employees watch their organization grow exponentially year-over-year, a small 3% salary bump may start to seem unfair or insufficient. In fact, these days, many hardworking employees are sensing this inequity and hopping ship in favor of a higher base salary at a new company.
Interested in attracting top talent and reducing turnover at your organization? The following five articles contain tips to help your organization win the modern War for Talent:
While industry type, brand reputation, job culture, and a variety of other factors go into determining which organizations are most successful in attracting highly-skilled job seekers, recruiters and hiring managers don’t have to leave anything up to chance. This blog post lays out five key steps human resource professionals can take to make their hiring process more likely to attract top talent.
Entrepreneurs in every industry are struggling with the same challenge: how do I make my company stand out? How do I make my company appealing to prospects among thousands of job postings, particularly in this “Modern War for Talent?” This blog post will outline how to brand your company for success to attract top performers.
With statistics showing that 1 in 4 adults has a diagnosable mental health disorder, it may be time to start developing initiatives to improve staff wellbeing in the office. In this blog post, learn how your company can increase its appeal to recruits by implementing initiatives like mental health coverage, a healthy work-life balance, flexible work hours, comfortable workspaces, healthy snacks, mindfulness training, and fitness programs/stipends.
Attracting talent to your organization seems like it would be pretty simple – just post job openings on your website or the job boards and let the resumes roll in. But how you create that job description plays a huge role in the quality of candidates who apply. This blog post outlines the challenges and mistakes around creating job descriptions – and what you can do to address them.
Accurate market data can have a significant impact on any recruiter’s success. The right data allows a recruiter to feel confident they are pricing jobs correctly every time, that they understand what’s driving changes to job prices, and ensure an offer can be made quickly, accurately, and with a good chance of being accepted.
Download our white paper to further understand how organizations across the country are using market data, internal analytics, and strategic communication to establish an equitable pay structure.