This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

July 20, 2005

Turnover Beginning: Employers Risk Lower Competence

Employee turnover has begun. We’re hearing from more and more clients and researchers that the most competent people have begun to leave for new jobs. In most cases, the employers we interview tell us that they have been surprised at their departure, and their rate of departure, of their valued workers---many of them at high levels in their organizations. In spite of the warning signs, many employers still have yet to acknowledge their vulnerability.

As the best employees leave, employer capacity will become more precarious. Remaining high performers will be increasingly receptive to approaches from recruiters from other companies. A major motivator for them is to work with others of equal or greater caliber. As the most competent employees leave, it will become more difficult to hire or promote comparable replacements. The growing economy will create more jobs, leading to more competition for top talent. Employers who have lost their most competent workers may have trouble attracting qualified workers. Consequently, employers with high employee turnover rates may have reduced capacity to meet the expectations of their customers.

According to a survey commissioned by Video Arts, the London-based, award-winning provider of entertaining training, businesses should be most wary of their 18 to 24 year old employees, by far the most restless age group. Over a third (34 percent) plan to change their jobs in 2005. As we move through the year, this percentage is expected to grow.

The survey reported that 1 in 7 (14 percent) employees analyzed stated that they are most likely to leave after a summer break, when feeling most refreshed. Over 1 in 10 (11 percent) plan to hand in their letters of resignation around autumn before the movement toward the Christmas shopping season.

Our research revealed that the same companies that are experiencing turnover also have openings for new employees. Some of the people who are leaving, company officials tell us, could fill other positions within the organization. Instead of welcoming an opportunity to remain with the same employer, doing a different kind of work, the disenchanted employees are looking for opportunities in other companies.

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