New research reports that the stress of serial layoffs, increased workloads and decreased compensation is taking its toll on the American workforce. The problem is that the unemployment rate provides few alternatives to the disaffected.
The issue for business is that while reduced labor costs and fear-induced quiescence give it more leverage, the dissatisfaction may begin to make itself felt in numbers that directly impact the bottom line: productivity. Unhappy employees, even fearful ones, are rarely as efficient and effective as happy, motivated ones. Furthermore, given the increase in Chinese wages, this could be an opportunity for American and European businesses to regain market share in selected industry segments. In a global economy few businesses give more than lip-service to national competitiveness, but if markets remain weak, so will profits and executive compensation. Free market principles will eventually drive the cycle. Businesses that get ahead of it will benefit. JL
Joe Light reports in the Wall Street Journal:
"Americans may be increasingly unhappy with their jobs, according to a new survey. But so far those lucky enough to be employed seem reluctant to quit. About one in three employees is seriously considering leaving their job, according to a survey to be released Monday by human-resources consultant Mercer LLC. That's up from 23% in 2005, the last time Mercer conducted the survey.
Companies have had significant changes in their work force. They've gone through downsizing and had to reduce cash compensation and benefits," said Mindy Fox, U.S. region leader for Mercer. "It feels a little bit like death from 1,000 cuts."
"Companies have had significant changes in their work force. They've gone through downsizing and had to reduce cash compensation and benefits," said Mindy Fox, U.S. region leader for Mercer. "It feels a little bit like death from 1,000 cuts."
Still, it isn't clear that increasing discontent will lead to more employees leaving their posts. Only 1.4% of employees voluntarily left their jobs in April, the most recent month for which data are available, down from seasonally adjusted monthly rates of more than 2% before the recession started, according to the U.S. Department of Labor. Overall, voluntary turnover is still nearly at its lowest point since the Labor Department began to track it in 2000.
However, some employers say they are preparing for turnover. "We can't rely on a poor economy and have to keep a pulse on each employee," said Connie Spyropoulos-Linardakis, chief human resources officer at Salt Lake City-based Zions Bancorporation.
Turnover at the bank dropped to an annualized rate of 19% in May of this year from 25% in 2008, said Ms. Spyropoulos-Linardakis. But she thinks that competition for employees could heat up toward the end of the year, possibly resulting in more employees leaving.
To prepare, this fall the bank plans to research what employees value in their pay and benefits packages in part to keep employees from leaving, she said.
Other industries are already seeing turnover tick up as new jobs become available. According to the American Trucking Associations Inc., the annual rate of turnover of line-haul drivers for large truckload carriers was 69% in the fourth quarter of 2010, up from 49% in the prior quarter.
"During the recession, companies were scaling back," said Bob Costello, ATA chief economist. "Most turnover comes from drivers jumping from company to company, but during the recession, those opportunities weren't available."
Since the end of 2009, conditions have steadily improved, he said. Mr. Costello said he recently spoke to a carrier who said he had just hired 10 new drivers.
Still, some companies aren't yet feeling pressure to raise wages. Ford Motor Co. announced earlier this year that it would provide merit bonuses but no raises this year for white-collar workers. After looking at the pay of its competitors, the company determined its wages were already competitive, said a spokeswoman.
Officials at Catholic Health Initiatives, a Denver-based nonprofit with more than 70 hospitals and other health facilities, said that turnover fell during the recession, as fewer employees left for other health-care systems and others delayed retirement.
As the job market picks up, some of those employees might choose to leave or retire, said Patricia Webb, chief human resources officer. In its 2009 fiscal year, the company eliminated annual incentives and bonuses but restored them the next year.
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