IT’S TIME FOR HOLLY JOLLY HIRING!
Christmas is right around the corner and, for some, it is truly the most wonderful time of the year. However, it might not be for reasons you’d expect. Between Christmas music and shopping trips, many Americans are preparing to make a significant change in the New Year: quitting their job. In September alone, more than 2.8 million people voluntarily quit their jobs, raising the voluntary quit rate 10% from the previous month, to the second highest number in 14 years. In our recruiting practice, the number of active searches increased from two at the end of September, to 11 by early December, an increase of 450%. This may surprise many companies looking to expand their staff for the first time since 2006, but all the signs are there – the job market is heating up once again.
We all witnessed the ever-increasing unemployment rates between 2008 and 2012, and unfortunately, the majority of the unemployed did not leave their jobs by choice. Massive layoffs, consolidations, and company closures reached record highs during the “great recession”, driving more than 12 million Americans into the unemployment lines. During these difficult times, very few individuals were willing to consider a proactive job change, choosing instead to stay put, take on more work, and agree to lower salaries and the elimination of bonuses and 401k matches, in hopes of surviving the downturn with their job intact! Without a doubt, it was an “employer’s job market” and for those few companies who were hiring, they witnessed a notable decrease in expected compensation, and a dramatic increase in available skills. However, as the economy improved, the unemployment rate dropped and confidence returned to the labor force, the number of Volunteer Quits has steadily increased. When viewed alongside the increase in the number of new hires and job postings, the “employer’s job market” has all but vanished! 2015 will see an acceleration of this return to a “candidate job market”.
Increases in the voluntary quit rate reflects a number of changes within the job market. Employed professionals, wary of going into the New Year with a job that pays too little, and a boss that requires employees to work too many hours while failing to recognize their contributions, are taking it upon themselves to secure new jobs. According to a slew of surveys, anywhere from 55% – 85% of employed professionals expect to change jobs in the next 12 months. And these proactive, in-demand employees are being met by companies who are willing to hire. Confident that the recession has ended and functioning in the black once again, many businesses are literally putting their money where their mouths are by deploying their newfound profits to increase hiring and compensation. Our own research at TuringPoint determined that within Sales and Marketing in Southern California, professionals changing jobs are receiving a 12-20% increase in salary.
However, this upturn in salaries, while important, does not tell the whole story. In fact, compensation plays a surprisingly small role in a professional’s decision to make a transition. A recent article released by aboutmoney.com reported that salary was nowhere to be found on the list of Top 10 Reasons Employees Quit their Job. They determined, instead, that relationships both vertically and laterally were the biggest indicators of job satisfaction. During the recession, many employers held on to the unstated mantra “You should be grateful to have a job”, eliminating annual reviews, decreasing levels of communication and fostering less than ideal cultures. The increase in Voluntary Quit Rate indicates that employees are no longer content with this dynamic. They are more confident than ever in their ability to find new opportunities with better compensation, greater respect from their superiors, and more collaborative environments.
Employers, as you deck your halls this season, be sure to trim your tree and re-engage your teams using the holiday season as a springboard to reignite the passion and excitement among your employees. Otherwise, you may find yourself with a stocking full of resignations!