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2018-09-21 11:57:56
Workers are losing their chains
WORKERS are in a phase of being footloose and fancy-free. The proportion of
Americans leaving their jobs voluntarily is at a 17-year high. A survey by
Gallup in 2017 found that around half of American employees were hoping to
leave their current job.
Some of this is cyclical. The unemployment rate is 3.9%, close to its lowest
level in the past 50 years. Workers rightly think that it will be easy to find
a new job. But there is also a structural problem in some industries. The
hospitality sector, for example, is largely staffed by low-paid, low-skilled
young people. In Britain the industry s annual job turnover is as high as 90%,
says Polina Montano, co-founder of Job Today, an app that links employers with
potential workers.
It is tempting to blame this restlessness on millennials people who reached
adulthood after 2000 and who are sometimes portrayed as being less committed to
their careers than their seniors. Another Gallup survey, this one in 2016,
found that 21% of the American millennial cohort had changed jobs within the
previous 12 months. But in fact workers aged 25 to 34 have always had the
shortest average job tenure, at around three years. The low for this measure,
at 2.6 years, was reached back in 2000, when the first millennials were
starting college.
High turnover is not great news for employers. Nick South of the Boston
Consulting Group says a certain amount of churn is good for bringing fresh
blood into a company. But anything over 20% a year can be disruptive. Even in
low-skilled jobs, replacing workers can be expensive. The post must be
advertised; managers spend time interviewing; new workers take a while to learn
the ropes.
The costs are particularly large for high-skilled workers. A survey in 2016 by
Deloitte, a consultancy, suggested that a combination of hiring costs and lost
productivity added up to $121,000 per departing employee. Figures from the
second quarter of 2018 showed that employee turnover in the American software
sector was running at an annual rate of 24%, with two-thirds of those workers
leaving voluntarily. That must be a problem given the difficulties in
recruitment. A survey in 2018 by Manpower found that global talent shortages
were at their highest since the employment agency began collecting the
statistics in 2006. Two-thirds of large organisations said they could not find
workers with the right skills.
So how can companies hang on to their staff? An obvious answer would be to pay
more than the competition. Despite low unemployment, overall wage growth has
not risen much in America, perhaps because a large army of discouraged
low-skilled workers have been rejoining the labour force. Given the shortage of
high-skilled workers, those employees ought to be in a strong negotiating
position, but even among them there is little sign of a surge in compensation.
Another approach is to convince employees that the company has a positive
social impact. The idea that a business can help a community wider than just
shareholders and customers has been dubbed inclusive growth . It may sound
woolly but, according to a new survey by Deloitte, 38% of businesses have found
that inclusive-growth initiatives boost employee engagement, encourage them to
stay and bring more talent in.
Technology can also help managers to spot particular individuals who might be
planning to quit, and to head off the problem with some well-chosen words of
encouragement or improved benefits; some Silicon Valley firms are looking into
this approach. One academic paper* looked at the language people used when
communicating with colleagues, and how closely they cleaved to the linguistic
style of their organisations, a process the authors call the enculturation
trajectory . (In academia, business-school professors will fit in only when
they start to use terms like enculturation trajectory.)
The survey looked at over 10m emails exchanged over five years at an American
tech firm. It found that new employees who were slow to learn the corporate
lingo were more likely to get fired, and that long-lasting employees who veered
away from the culture in their messages were more likely to quit for another
job. But this raises the Orwellian prospect of managers using artificial
intelligence to comb through employees emails. Instead, to make an
old-fashioned suggestion, they could just stop by their desks for a chat.
Outcomes in Organisations by Sameer B Srivastava, Amir Goldberg, V Govind
Manian and Christopher Potts