Employee Engagement

 According to a new report on job turnover from the CIPD, the proportion of workers leaving their employer at any given time fell by over two fifths between 1998 and 2012, presenting businesses with challenges in establishing cultures of innovation, but equally allowing for invaluable long-term retention of employee knowledge and skills.

The paper, “Has job turnover slowed down,” published  by the CIPD, the professional body for HR and people development, forms part of CIPD’s Megatrends research project exploring and developing the debate on the economic and social trends that will shape the world of work, the workforce and the culture and organisation of workplaces in the future.

The report presents data from the Office for National Statistics showing that in October-December 2012, 2.6% of employees left their jobs, compared with a figure of 4.5% for the same period in 1998.  Most employees leave their jobs voluntarily (due to resignation, retirement and for other reasons) rather than involuntarily (dismissals and redundancies).  Turnover is highest among young people and lowest among the over 50s.  Since 2008, average job tenure (the average period that people spend in their job) has been increasing.  This is a trend that has been seen in a number of other countries including the USA.

Mark Beatson, chief economist at the CIPD comments: “This is a trend that seems to have crept up on us.  We have been told for a long time to expect the end of the ‘job for life’ and more frequent changes of employers and careers but the data appears to have been moving in the opposite direction.

“We expect job turnover to be low in recessions because people ‘sit tight’ waiting for the jobs market to improve, but in fact turnover was falling well before the recession took hold.  Our research suggests turnover may also have fallen because of changes that have taken place within the workplace.  For example, increased job satisfaction and employee engagement may have reduced the number of disaffected employees jumping ship. Employers have also got better at providing opportunities for people to move within their organisations – giving people opportunities to develop and grow without moving employers.  Employment legislation might also have played a supporting role.

“Many employers will see lower job turnover as a good thing because less movement between employers means a more stable workforce.  That means greater retention of ‘know how’ and increases the return employers can expect from investing in their employees.

“Employers also recognise that a moderate level of staff turnover helps to keep organisations fresh and maintain the diversity of the workforce.  However, they must also consider how they can keep longer-serving employees motivated, refreshed and up to date with business practice. Signs that people are only staying put because they have to, not because they want to, must also be monitored for, so that steps can be taken to re-engage flagging and reluctant employees.

“Innovative organisations require new thinking and challenges to existing ways of doing things. A lack of new blood means businesses will need to carefully tap into the knowledge and commitment of the existing workforce to generate a culture of innovation – boosted by genuine cultures of lifelong learning and meaningful career progression. It can also be harder to recruit if fewer people are looking to change employer. To deliver business growth and competitive edge in the context of a less ‘footloose’ workforce, employers will need to be ever more creative in their recruitment practices and in widening the pools from which they recruit.

“Looking ahead, we should expect job turnover to increase as the labour market picks up.  However, over the rest of this decade, we expect population ageing to work the other way.  There will be fewer young people in work – who change employers most often – and more over 50s in work – who are the age group least likely to move.  So we may well see historically low turnover rates for years to come.”

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