Live from NCOF: “Unprecedented” Employee Turnover Ahead

Grapevine, TX—The days of telling workers that they should consider themselves lucky to have a job are just about over. During his luncheon keynote address at the National Conference on Operations and Fulfillment on Monday, futurist Roger Herman, CEO of The Herman Group, warned that economic and demographic trends are transforming what had been a “buyers’ market” for employers to a “sellers’ market.”

In the early and mid 1990s, employers went out of their way to accommodate and even spoil employees. The go-go economy, compounded by baby boomers’ and Generation X’s desire to “take care of themselves rather than their companies,” resulted in what Herman called “unprecedented turnover” among workers. Pervasive job jumping among the most desirable employees made it tough to build teams and guarantee consistency.

With the dot-com implosion of 1999-2000 and the aftermath of 9/11, employees lost their advantage over companies. As the economy tightened, necessitating job cuts, management become more “autocratic,” Herman said. As a result, “employers during the past four years have not been treating workers as they should.” Employees in turn are harboring resentment over being overburdened and told to “put up or shut up.”

Well, guess what? Herman is again predicting unprecedented turnover among employees. Some regions of the country are already seeing unemployment rates of less than 2%, he said, turning the labor market into a sellers’ market once again.

According to Herman, 35%-40% of today’s workers are actively looking for another job. And 85% of the nation’s workers expected to be employed by a company different from their current one within 12 months. What’s more, a “substantial portion” of those who will leave their jobs will subsequently leave their new jobs within 6-10 months.

Yet we’re not seeing the 1990s redux, Herman said. For one thing, many of the next generation of employees are “highly technological in their approach.” Whereas the youth of the previous generations spent their free time working afterschool jobs or spending time with friends, the teens of the so-called millennial generation are bent over their computers, e-mailing, IMing, and playing video games—often at the same time they’re doing homework, watching TV, or participating in other activities. As a result, they’re accustomed to multitasking and making snap decisions. If they encounter a problem at work, said Herman, they’ll want to solve it ASAP, not spend time in a meeting with their peers and superiors. This will make managing these employees a challenge for older workers.

But employee retention will be even more critical than before, Herman continued, particularly for those who employ what used to be referred to as blue-collar workers. With the continued emphasis on obtaining a college degree as a gateway to professional success, there’s a lack of applicants for trade professions such as plumbing, auto repair, and the like. “We are on the threshold of the most severe shortage of skilled workers in history,” Herman said. While there may be plenty of applicants for fulfillment and call center jobs, there is a lack of skilled applicants.

To expand the universe of skilled employees for a given field or industry, Herman advised reaching out to community colleges and other institutions and organizations to interest potential workers and bring them into your fold.

As for retaining your best workers, he stressed the importance of replacing the subpar workers. The “good” employees tend to pick up the slack of the underperformers, leading to frustration and resentment.

Above all, he said, keep in mind that “people join companies; they leave bosses.”

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