There were 9.6 million job vacancies in March 2023 compared to 12 million job vacancies in March 2022, showing that more employees are sticking around for longer.
This article was first published on June 27, 2023, by HR Daily Advisor, a sibling publication to HealthLeaders, and has been adapted for HealthLeaders.
For the past few years, recruiting and retention have felt like Olympic-level difficulties. Good talent was hard to find, and it was even harder to keep—almost everyone in HR had turnover stories that sounded like nightmares. 2022 had the highest number of quits since the government started tracking the trend in 2000.
These record-high quits have left recruiters, talent managers, and HR professionals scrambling to fill open job seats and lower turnover costs for their companies.
But the tide may finally be turning.
According to the ADP Research Institute, Americans are quitting their current jobs at a rate that’s down by 5% from this time last year. While that number may not seem monumental, it’s significant enough to give HR professionals pause.
ADP also shared that job vacancies in March 2023 were 9.6 million vs. the 12 million job vacancies available in March 2022. More employees are sticking around for longer, shifting the way recruiters are thinking about acquisition and retention.
While it can sometimes be useful to keep your head down and focus only on your individual company and its needs, it can also be helpful to pay attention to larger trends in hiring. And the “Big Stay,” as it’s being dubbed by numerous employment experts, is something you want to pay attention to.
Why Has Quitting Slowed?
Although there are many things that could be considered factors, one main contributor is the economy. As inflation continues to rise, yanking interest rates along with it, companies are needing to tighten their belts.
Leaving your current gig for a new one can be a major risk. Although job seekers have gotten comfortable having all of the bargaining power, some businesses are simply no longer able to meet skyrocketing salary demands and requests for flexibility from brand-new employees.
The year-over-year pay increases workers were receiving from job switches actually peaked in June 2022 at 16.4%, according to ADP Pay Insights. Pay increases for those switching jobs have since decelerated. ADP Pay Insights also shares that April pay gains of this year for job switchers was at 13.2%, which is the lowest pace of growth since last autumn.
What does all of this mean? A new job no longer means instant increases and benefits, which means employees may feel less comfortable taking a risk and jumping ship. After all, a new position is a significant risk, and if they’re not going to be highly compensated for it, what’s the point?
Furthermore, companies have adapted to their new employees’ demands. Because more and more businesses have been willing to meet existing employees’ demand for flexibility, those employees feel better about their decision to stick around.
Companies during the Big Quit were basically forced to meet employee demands, and if employees are now able to work from home 3 days a week, they’re much more likely to stay put instead of risk being unable to find such a great situation elsewhere. In other words, the loyalty businesses were able to show their employees is now being handed back to them.
How Does This Affect Talent Retention and Recruitment?
If you’ve felt immense pressure to keep your employees from quitting over the past few years, you’re not alone. But the Big Stay might allow you to ease up a bit.
Consider focusing on innovation and talent development. By showing your employees you’re interested in their growth, you’re demonstrating your desire for your partnership to be a long-term one. Providing ongoing education for your employees can be a great way to refocus your retention efforts into something that will benefit both you and your employees in the long run.
Because employees are becoming slightly less likely to quit, you may be able to shift more of your attention to recruitment. Logic stands to reason that if fewer employees are leaving, you won’t need to recruit as hard either.
But if you are facing open positions, it may actually be harder to find high-quality employees. Those employees are also more likely to be sticking to their current gigs, leaving the talent pool shallower than it was last year. There’s still a lot of great talent out there; it may just continue to be difficult to track down.
How Does This Benefit Your Company?
Keeping a low turnover rate has obvious financial benefits. Finding new employees, interviewing them, onboarding them, and training them all while the role they’ve been hired to fill isn’t being fulfilled? It’s an immense cost any business would want to avoid.
In the past few years, talent acquisition and retention has likely been a huge part of your business’s budget. Being able to hold onto employees for longer can have a major impact on your bottom line.
But there’s a cultural aspect, as well. When fewer employees are leaving, you’re able to build a company culture that’s much stronger. Employees get in a groove of working together, and they understand each other’s strengths, weaknesses, and idiosyncrasies. They become more comfortable voicing disagreement or having conflict, and they’re more willing to trust one another’s risks or new ideas. While you don’t want things to get stale or overly comfortable, employees who have been around for longer than a handful of months can really make a positive difference within your company culture.
We’re Not Out of the Woods Yet
Quitting numbers aren’t quite back to where they were pre-pandemic. If your business is on the lower end of the salary and flexibility bell curves for your industry, you may still be facing employees with one foot out the door.
But the Big Quit has all indications of slowly transitioning into the Big Stay. The light at the end of the tunnel is there, however dim at the moment. So feel free to have some tentative optimism and look forward to things continuing to improve in terms of employee retention.
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