The Herman Trend Alert|
June 20, 2001
Forecast: Increasing Turnover
The economy has slowed. The slowdown, we believe, is temporary. However, many employers, nervous about their vulnerability, their responsibility to stockholders, and their bottom line, are strategically cutting payrolls. They now offer expensive severance packages and other inducements to encourage people to leave-exactly the opposite behavior of what these same employers did just a few months ago to recruit and hold workers.
Of course, a lot of employees are taking the packages and marching through the doors. Many of them are reluctant to leave. They had found jobs they enjoyed, and here comes management again throwing away valuable, experienced, dedicated workers. Human resource professionals are confused. Should they continue to operate their employee retention programs, or just open the floodgates? The choice may be in the hands of the workers.
The people who are discarded through no fault of their own experience powerful reinforcement of the "corporate loyalty is dead" feeling. They get a clear message that you can't trust management, that investing in a long term relationship with an employer just doesn't work anymore. In their panic to reduce costs, senior executives are systematically destroying the workforce stability they coveted so recently.
People who remain on the job are nervous. Will they be next? Should they look for other jobs? Can they trust what management tells them? Their attention is shifting to self-preservation, self-direction of their careers. Numerous employers are unwittingly forcing all their employees to re-think their loyalty and their motivation to work for their current employers.
When the economy heats up again, and it will soon, what will happen? We forecast an increase in employee turnover. Disenchanted workers will abandon those companies that dumped their co-workers, their friends. They'll seek opportunities at companies who held onto their people and used the slower period to invest in training, facilities maintenance and upgrading, and systematic improvements to the way things are done.
Employers who forced happy employees to leave will find it difficult to replace them. The word will get out. The stability equilibrium among businesses will change, bringing significant problems with production, sales, and employee relations.
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