Over the past few decades, there has been a distinct shift in employee retention.
In years past, it was not unheard for someone to begin working for a company immediately after college, or sometimes even high school, and stay with that company for the rest of their working lives.
But these occurrences are dwindling. According to a longitudinal survey published by the Bureau of Labor Statistics in August 2017: “Among jobs started by 35- to 44-year-olds, 36 percent ended in less than a year, and 75 percent ended in fewer than 5 years.”
This trend creates problems for employers as well as employees. Employers are burdened with the task of searching for new employees more often. Once found, acclimation of the new employee through training and the inherent learning curve can create significant cost for the company as the resulting training and potential impact on production take their toll.
For the employees, there is an old saying in business: employees quit managers, not companies. The problems discussed above represent issues that fall to managers and rarely make it to corporate-level attention. Likewise, the hiring of new employees falls to the same managers that are impacted by the loss. Experienced managers realize the impact of hiring new employees and are fundamentally averse to hiring those whom they believe will stay only a short time.
While this mindset may eventually become antiquated as generations and values change, the impact of job-hopping remains.
Another old saying in business: move up or move out. Companies, with obvious exceptions, realize the value of long-term employees. Levels of trust, productivity and relationships are all essential to the long-term goals of a business. These are characteristics that cannot be bought and are the result of tenure and the knowledge created by longevity.
Longevity is also becoming an antiquated term in employment, but the demise is potentially abatable. While compensation is the predominant reason for changing jobs, there are other attributes that factor.
Corporate culture is present in every company, from mom-and-pop operations to large corporations. If the interaction between management and employees does not promote a perception of trust and open communication, the level of employee engagement tends to wane.
Likewise, the capability of management to recognize an employee that is not satisfied with his or her job will also suffer. An open culture, coupled with training of managers that promotes and encourages honest discussion, without fear of reprisal, will open communication lines.
Managers that are given the autonomy and knowledge to understand and react to fixable problems and recognize those that are not is a relatively new concept. The long-time standard Performance Improvement Plans (PIPs) to address problems are often counterproductive and often result in detriment to the employer-employee relationship.
Largely seen as a leverage tool of HR departments, PIPs outline the performance insufficiencies of employees and highlight shortcomings, allowing a specified time to achieve a “normal” performance or risk termination. Rarely seen as beneficial by employees, the change in perception of management, in many cases, resulted in resignation.
Though the number of offered solutions to longevity are as high as the number of problems, there is potentially an alternative to lessen the impact.
Some companies are experimenting with a transition period for employees to move to a new job while remaining employed. Whether instigated by the employee or employer, the termination of employment is not set at the standard two weeks’ notice and allows both parties to strategically plan for the impact of changing jobs.
Though not ideal for all circumstances, jobs that require high skill levels or customer relationships are able to minimize the impact of turnover by an amicable and mutually beneficial parting.
While this idea is perhaps not ideal for some companies, the mindset is clear. Businesses, relationships and employees are changing. Generational and cultural changes are necessitating the alterations of out-of-date practices. We can no longer maintain a practice because “that’s the way we’ve always done it.”
Tom Morgan is an associate professor of supply chain management and director of the Charles H. Diller Jr. Center for Entrepreneurial Leadership and Innovation at the John L. Grove College of Business at Shippensburg University in Pennsylvania.