#TLDR: The labor market has changed significantly as compared to the calm growth of 2009-2018. The fight to attract, engage, retain and grow talent is getting intense! What are your plans to address it?
The most recent job data made me think about what to expect from 2023. I pulled employment data from BLS and plotted it to see if I can gain some insights. Here is the chart:
The blue area is all the new jobs being created in this economy. The bars below represent total departures from the workforce, either as quits (voluntary resignations) or layoffs (terminations). As you will notice, from 2009 till 2018, the blue area was not disproportionately larger than the sum of the bars. Thus, the jobs being created were roughly supplied with new applicants by voluntary and involuntary departures.
Since 2021, there is a significant shift:
Job openings are staying high (10 million plus) every month
Total quits plus layoffs are steady (4 Million per month)
Quits are significantly higher than layoffs
High quit rates imply that the employees are leaving voluntarily! The reasons can be many, like pay, flexibility, burn-outs, lack of growth, you name it. Out of these, there are some that are beyond your control (unless you are the top dog in your industry and are ready to pay the top dollars) like pay and benefits. However, there is a significant number of reasons that are under your control! They are:
Engaging employees toward the company mission, culture, and goals
Helping employees grow as professionals (not just promotions or different titles)
Allowing employees to thrive at work
But if you are still using the resources and approaches that worked for employee retention and engagement from 2000-2018, you may not see a positive shift. Why? Because as Marshall Goldsmith has said, "What got us here, won't get us there!".
By using the same tools, mindsets, and approaches that were used as quits increased, employee engagement dropped, and hiring costs went up, you can't expect to achieve different results.
So my question to you is what are you going to do differently in 2023?
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