Case: Churning About to Heat Up
Traditionally, the US workforce has had on of the highest rates of voluntary turnover in the world, and this is actually considered a source of competitive advantage. Unlike layoffs that reduce the overall size of the economy, people who turn over voluntarily often have lined up better jobs already, and thus, create a new job opening for someone else after they leave. Thus, this kind of "churning" does not affect the size of the economy and results in a better person-job fit for many people. It also rewards good employers who fail to meet the needs of the workforce, thus "thinning the herd" at the firm level.
The churn rate for the US economy. however, is not what it used to be, and many have pointed to this factor as one of the reasons for the weak nature of the most recent recovery. Many workers during the recession were very reluctant to leave their jobs, and this aversion to risk reduced the number of job openings and above what might be attributed to the bad economy. One study suggested, for example, that 80% of the reduction in hiring during the 2007-2009 recession was due to a reduction in churn rather than a decline in job creation.be changing, however. Turnover rates that stood at 9% in 2008 and 2009, jumped to 15% in 2010 and 2011. In addition, all signs pointed to even higher increases in 2012 and 2013. A national survey conducted by the Society of Human Resource Management indicated that job satisfaction, a leading indicator of voluntary turnover, was down over 80% in 2012, and a separate survey conducted by HR software vendor Cornerstone OnDemand estimated that 25% of employees were looking to change jobs in the 2013-2015 time period. Many of these workers suffered through years of increased workloads without increased pay during the recession and are looking to improve their situation as the economy continues to hear up.
For businesses, the cost of this churning is close to $2 trillion due to the need to recruit and train new workers. This cost is not distributed evenly across employers, however. Organizations that were not able to keep up employee morale are about to lose a large percentage of their most valued employees, whereas companies that met their employees' needs are likely to experience stability or growth. Thus, churning streamlines the economy and creates efficiency by eliminating weak competitors and strengthening the most competitive firms.
Analyze and answer these questions.
-How do employee development, career development performance management and employee engagement reduce voluntary turnover?
- What measures of employee development, career development performance management, employee engagement, and turnover do you think are most beneficial as an HR leader?
- How does turnover contribute to competitive advantage?
Write a 5-page paper with clear citations and bibliography.