It seems that economic survival is not the only concern employers should be worrying about these days—employee loyalty is now poised for trouble as well. According to recent research, an overwhelming majority of American employees are considering changing careers as the economy improves, and experts say such employment exodus could lead to higher costs and tougher talent battles.
A Monster Global Poll of over 22,400 Monster.com site visitors found that 89 percent of global employees—those based in America, Europe and Canada—would consider changing industries due to the economy.
Of particular interest to American companies is that 88 percent of U.S. respondents reported that they would be open to a career change. Almost half (46 percent) of staffers were actively seeking to make a change, while another 18 percent would consider the idea. While 22 percent admitted that they would accept the first job they found, regardless of the industry, only 14 percent were not currently considering switching industries.
Norma Gaffin, director of content for Monster.com in the U.S., believes that there’s more at play than simply the struggle to find and maintain employment. She says it’s a matter of empowerment. "When workers choose to make a career change in this climate, they are taking their careers into their own hands. Maybe they are taking this as an opportunity to do something they've always wanted to do, or to move into an industry they feel might offer them the future they want to have."
The need for a little self-empowerment is understandable, given the hit the American job market has taken since the recession's start. According to the U.S. Bureau of Labor, the unemployment rate has risen by 4.8 percent overall to total 7.4 million persons since Dec 2007 and there have been 44,669 mass layoff events. As of Aug 2009, the unemployment rate totaled 9.7 percent.
While there is hope on the horizon in terms of job outlook—Manpower's Employment Outlook Survey found that 12 percent of North American employers are planning to increase their fourth quarter hiring by 12 percent—the question remains as to what effect the career swapping will have on employers when the economy picks back up. The outlook from experts does not look good.
"I think there are a lot of companies who are going to be in for a huge shock because they have really been short-sighted and thought this economy was a way of cutting back on [employee benefits and experience]," said Gordon T. Green, executive vice president of recognition & reward strategy at Rideau Recognition Solutions, a rewards and recognition solutions company. In fact, CareerBuilder and USA Today's Q4 2009 Job Forecast found that 18 percent of employees said their organizations instituted pay cuts during the last 12 months and research from the Employee Benefit Research Institute in June 2009 found that 251 401(k) plan sponsors had suspended matching contributions, affecting 4.4 million workers.
"Loyalty to a company really comes down to how the company treated their employees throughout the downturn," said principal with Deloitte Consulting LLP's Human Capital Practice Jeff Schwartz. "Since voluntary turnover was low throughout the downturn, executives may be tempted to think that their actions have no effect on their employees wanting to leave their companies. However, these actions can cause turnover intentions amongst employees who will stay put until the economy improves."
Such turnover tendencies will most likely put a significant dent in many employers’ hiring plans. According to CareerBuilder, 26 percent of employers who laid-off workers in the last 12 months are planning to bring back their former employees, and 23 percent of those had already begun extending offers in the third quarter.
Schwartz believes that laid off employees will only return to their former employer as a last resort. "The fact that their firms had found them expendable in the past would suggest they would be expendable again in the future, should subsequent layoffs be necessary…if laid-off employees do go back to their previous employers, they may be likely to continue looking for another position at a new company."