Friday, June 09, 2006

Why do so many people want to change jobs?

In this month's Reach Communications newsletter, William Arruda expresses his surprise at the results of CareerBuilder's 2005 poll that found “nearly three-in-ten workers say they plan to look for new opportunities in 2006 and 41 percent plan to leave their companies by the end of 2007."

I have a partial explanation for the high numbers of people planning to change companies. There's a popular explanation that people are tired from years of stressful work environments (especially layoff survivors) and stagnant incomes (almost everyone). I think the biggest factor is deferred ordinary turnover.

I don't have the numbers to back this up, but I suspect that there's a natural rate of voluntary turnover that has been suppressed during the tough years in the employment market. When companies are outsourcing, offshoring, and generally reducing employment, employees sit tight, happy just to have a job. When they perceive the market improving, they start looking for the next opportunity.

If a company experiences 10–15% annual turnover, and voluntary turnover has been on hold for five years, that means 50–75% of the employees are overdue to leave. OK, some mathematician could probably fine-tune that number for me (41–66%?), but you see the point. In this analysis, increasing turnover is a positive indicator for the employment market and doesn't necessarily point to trouble at any particular company. It just means that we'll see a higher level of activity as the employment market strengthens.

For the jobseeker, increasing voluntary turnover means increasing competition for open positions. If you're not working, do you have a good answer for, "What have you been doing since your last job?" You're sure to get that question.

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