Concerned about Retention? The Potential for a Resume Tsunami

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I’m so excited about a report we published today: Calculating the True Cost of Voluntary Turnover: The Surprising ROI of Retention. I’ve been wanting to write this report since I joined Bersin in 2013, but my study of retention began many years before then.

In February of 2002, in the middle of the recession that followed 9/11, I wrote a paper for grad school where I predicted that there would be a “resume tsunami” after the recession ended—where downsizing survivors would leave their employers as soon as they could because they had been treated so poorly. Sure enough, voluntary turnover started to increase in July of 2003 and continued to rise until July of 2005 (see the blue line in the chart below).

Voluntary turnover didn’t drop significantly again until the Great Recession began in late 2007, with a huge decrease from mid-2008 through mid-2009. To highlight the importance of treating employees well during layoffs, in 2009, some Deloitte Consulting LLP colleagues and I wrote “Where Did Our Employees Go? Examining the Rise in Voluntary Turnover During Economic Recoveries”[1] and included a chart like the one below (with 9 years of data).

Voluntary Turnover (Quits) vs. Unemployment Rate 2001-2016

  

We found that employees are far more likely to look for new jobs when unemployment rates go down. As you can see in the chart above, data from the U.S. Bureau of Labor Statistics shows an extremely strong negative correlation between voluntary turnover (quits) and unemployment (r = -.96, p < .001) between 2001 and 2016.[2]

What does this mean for leaders today? First of all, Deloitte’s Global Human Capital Trends 2015 report cites engagement and retention as the number one HR challenge, edging out both leadership and learning. An overwhelming 87 percent of the over 3,300 business leaders from 106 countries who were surveyed believe the issue is “important,” with 50 percent citing it as “very important.” [3]

Second, the unemployment rate in the US is low again, almost back to where it was in 2001 and 2007 (orange line above) and many organizations are starting to see their voluntary attrition levels go up. The data from the last 15 years shows that if the unemployment rate continues to stay low, the national voluntary turnover rate will likely stay high. Many companies will continue to struggle to fill job vacancies—in fact, at the end of June 2016, there were more than 5.6 million unfilled jobs in the United States.[4] Worse, these shortages are most pronounced for skilled roles that have high barriers to entry and are crucial to a company’s success.[5]

What many organizations haven’t realized though, is that voluntary turnover is costing them millions of dollars in lost productivity. My new report provides a turnover calculator to help organizations calculate a “truer” cost of voluntary turnover. Once HR leaders have calculated these numbers for their own organizations, they should be able to make a compelling business case for investments in employee engagement and retention, e.g., additional bonuses and / or salary increases, improved benefits, employee engagement measurement solutions, high-potential programs, additional training and development opportunities.

So what do you think? Are you concerned about voluntary turnover and retention in your organization? As always, I’d love to hear from you. Feel free to add a comment below, connect with me on Twitter @RAEricksonPhD, or by email at rerickson@deloitte.com.

 
 

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

  

Deloitte shall not be responsible for any loss sustained by any person who relies on this information.


[1] Where Did Our Employees Go? Examining the Rise in Voluntary Turnover During Economic RecoveriesDeloitte Review / Bill Chafetz, Robin Adair Erickson, and Josh Ensell, 2009.

[3] Global Human Capital Trends 2015: Leading in the new world of work, Deloitte Development LLC and Deloitte University Press, 2015.

[4] Bureau of Labor Statistics: http://www.bls.gov/news.release/jolts.nr0.htm, 20XX.

[5] The Talent Paradox: Critical Skills, Recession and the Illusion of PlenitudeDeloitte Review / Robin Adair Erickson, Jeff Schwartz, and Josh Ensell, 2012.

  

Robin Erickson

Robin Erickson, Ph D , directs Bersin by Deloitte's Talent Acquisition research practice, and writes about various topics in talent acquisition including integrating with talent management, improving quality of hire for critical jobs, leveraging social recruiting to build talent pools and building a global recruiting function Robin brings to her role broad experience in talent strategy, retention improvement, workforce planning, organization design, mass career customization, diversity and inclusion, leadership alignment, change management, workforce transition and project management.

One thought on “Concerned about Retention? The Potential for a Resume Tsunami

  1. Hi Robin…I’m curious how employers are going to confront the lack of skills for their critical job openings. Do they continue the search for the holy grail, and for how long. I’m in a situation that many are probably in where I was laid off during the recession and started a new career. I am highly educated in the new field after 7 years but don’t have the specific extensive experience for the jobs I am interviewing for, which defines the skills gap.
    I’m wondering when employers are going to start hiring people from different backgrounds for their high potential, as opposed to their experience in that specific field.

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