Prepare for post-recession musical chairs

Jul 28 2009 by Nic Paton Print This Article

The recovery may be tentative at best for now, but organisations can expect to be on the receiving end of a resumé "tsunami" as soon as disgruntled workers see signs that the turnaround has arrived.

It's happened before and in all likelihood it'll happen again. Once workers stop feeling afraid to move and, having spent the past 18 months treading water in the safety of their current job, the challenge for managers is going to be twofold: stopping your best people disappearing as well as integrating a sudden influx of new talent.

According to studies on both sides of the Atlantic this week, this recession is unlikely to be different to previous downturns in that, as soon as workers feel confident enough to stick their toes back into the jobs' market, all their pent-up frustration at having to stay where they were during the recession will lead to a massive game of musical chairs.

And for managers still struggling to deal with the demands of the economic downturn, this is likely to be an extra headache just when they don't need it.

U.S research by consultancy firm Deloitte has argued that, while for now headcount reductions and cutbacks remain the most prevalent concern, savvy managers and HR executives are increasingly girding themselves for the recruitment shuffle around that traditionally comes after a downturn.

"Once the recovery begins to take hold, business executives and talent leaders can expect a 'resume tsunami' as voluntary turnover rises with leaders and workers with critical skills seeking new opportunities," said Jeff Schwartz, principal at the firm.

"The depth and quality of retention planning today will likely separate the talent winners from the talent losers tomorrow," he added.

At the same time, a survey by the UK HR organisation the Chartered Institute of Personnel and Development has found that concerns about job security and the stark reality of fewer opportunities are forcing employees to stay put in their current jobs whether they want to or not.

The CIPD poll of more than 3,000 employees has found that three quarters had no plans to change employers in the foreseeable future, with two thirds citing difficulties in the current market.

But asked whether, in an ideal world, they would want to change jobs within the next year, more than a third said they were consider doing so, with a quarter of these keen either to work in a different sector or change their career direction altogether.

The Deloitte study is the third in a series of studies called Managing talent in a turbulent economy: Clearing the hurdles to recovery that is tracking the way global business leaders are shifting their talent priorities and strategies and how they are planning for economic recovery.

Key findings included the belief that the worst may finally be behind us. For the first time in the study the number of surveyed executives who said the worst was yet to come had declined, from 32 per cent in March to 18 per cent in May.

At the same time, those who believed the worst was behind them had doubled to 16 per cent from eight per cent in March and six per cent in January.

But alongside this there was a growing fear of voluntary turnover. Nearly two-thirds of those polled were highly or very highly concerned about losing high-potential talent in the year after the recession ended.

On top of this, cutting costs remained the top strategic priority, with more than half of the executives ranking cutting and managing costs as their top current strategic issue.

And, despite the fear of growing staff turnover, we are not yet out of the woods when it comes to layoffs, either.

When asked to rank their current talent priorities, more than four out of 10 of the executives surveyed in May put reducing employee headcount at the top of the list, slightly higher than in both March (39 per cent) and January (38 per cent).

Nevertheless nearly half also said their companies planned to recruit more critical talent to manage the current economic environment, significant jump since on 34 per cent recorded in March, said Deloitte.

Generation Y (under age 30) workers were considered most likely to be on the move, with nearly two thirds of executives predicting an increase or a significant increase in turnover among this group.

This was followed by Generation X (ages 30-44) at 46 per cent, with only one in four expecting to see an increase in departures by Baby Boomers (ages 45-64) or veterans (over age 65).

The CIPD poll, meanwhile, identified workers in banking and finance and construction as being the most likely to want to change their jobs in the next year.

But redundancy-hit private sector employees in general were more likely to consider changing sectors, with a quarter indicating this intention, against just under a fifth in the public and voluntary sectors respectively.

Of those looking for a job in a different sector from their current job, the most popular options appeared to be the public and voluntary sectors, with nearly a third looking for move in community, social and personal services activities and a fifth wanting to move into education.

Claire McCartney, talent and resourcing adviser at the CIPD, said: "What is striking is the high proportion of people wanting to change sector or even change their line of work altogether. Concerns over job security and finding new work are prompting people to re-think their career aspirations and ambitions. This will also have a big impact on trends in the labour market.

"It's clear from this quarter's findings that the poor state of the labour market is acting like a dam holding back the normal flow of talent. Once job opportunities increase, however, dissatisfied employees will vote with their feet and leave, making it important for employers not to take the loyalty of their people for granted," she added.

"Employers need to be careful to avoid complacency. The recession may keep your best people with you for now, but you need to take the time to focus on building employee engagement by providing employees with clarity around career paths and setting work that is meaningful to them, if you want them to stay put when better times return," she continued.

The challenge of retaining high-potential employees both now and on the other side of the recession was highlighted by Sirota Survey Intelligence last month.

It argued that firms that fell into the trap of seeing employees as costs to be controlled rather than assets to nutured could end up with a rude shock when things did finally properly pick up.

And in May research from The Conference Board highlighted the need for managers not to end up with a situation come the upturn where the only people they have left are precisely those they wouldn't have minded too much losing anyway.

Over-zealous layoffs and poor management and communication during the difficult times could easily lead to a mass exodus of your best talent, which will normally always be in demand, meaning firms risked emerging blinking into the economic sunlight shorn of their best talent and unable to maximise the opportunities created by the better climate.

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