A small trickle of new jobs will cause a tidal wave of unexpected replacement hiring. Here’s why you need to get ready now. Hopefully, it’s not too late.
In a recent ERE article, I made the point that “employment churn” (fully employed people switching seats) will increase dramatically three to four months before any pickup in overall employment. This unplanned spike in voluntary turnover will leave many companies ill-equipped to handle the surge, since most are not considering replacement hires in their new hiring forecasts as a big item.
Based on some recent evidence, I believe that this spike will be more significant that anyone realizes. Worse, this could happen sooner than expected, blindsiding unprepared companies.
Here’s some of the evidence supporting this view.
Over the past few months I’ve been asking people who are fully employed these two questions:
- How satisfied are you with your current job?
- Are you looking now for something better?
Interestingly, more people said they were satisfied than unsatisfied, but even those who were dissatisfied most said they weren’t looking right now, probably because there isn’t much worth looking at. We created a formal survey to validate this result, since the impact of this effect on your current and future sourcing plans is huge (here’s the link to the two-minute survey).
Overall, 75% of the people said they would consider something if called, but only 20% of the most satisfied said they’d take the call. You’ll find the detailed results after you complete the survey, but here’s the chart showing job satisfaction vs. job hunting efforts.
Basically, the conclusions drawn from this survey (when validated by more participants) mean you should stop all of your active candidate sourcing programs immediately and aggressively ramp up your passive recruiting efforts.
What the survey results seem to indicate is that just having a job is far better than not having one, even if the job itself provides little personal satisfaction. Since there are so few good jobs out there, it’s not worth looking for something else right now.
As you can see by the chart, less than 10% of those unsatisfied and extremely unsatisfied with their current jobs are aggressively looking. And why would they? We’ve all read about low-ball offers, the number of applicants applying for each job, and the demeaning aspects of looking for a job in the current environment.
Given this situation, it’s unlikely many fully employed people would be looking, risking the jobs they already hold. You can observe a similar effect by tracking the use of the word “jobs” in a Google search.
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Last year, this number was about 3.5mm per day. It peaked in March/April at 7.6mm per day, and has been running at 7mm per day for the past three months.
While still a huge number, one could conclude that the steadiness is a result of people not finding anything new. I’d further conclude, based on the survey results, that most of the people looking for these jobs are either the unemployed or those just entering the workforce.
It’s also pretty easy to conclude that as soon as the economy recovers just a little, those least satisfied of the fully employed will leave first. This movement will then trigger the next rung of those slightly less satisfied to ramp up their job-hunting efforts.
This, in turn, will lead the next group to move up their efforts, and so on. Pretty soon, a minor increase in voluntary turnover will lead to a massive game of musical chairs being played out across the country. It will only take a little bit of new job creation to start this major movement.
This is not a far-fetched scenario, with the tea leaves pointing to something like this happening in the next three to four months. Surprisingly, very few companies are ready for this unexpected surge in replacement hiring.
If you think there is a possibility of this type of scenario impacting your company, here are four ideas you might want to ponder at your next recruiting staff meeting. (For more on this topic, check out my September 2 webinar called “How Job Satisfaction Drives the Job Hunting Process.”)
- If you have any open reqs for experienced hires, don’t expect to hire any good people who respond to your ads. You’ll need to enter into the passive candidate market aggressively to fill these slots or ramp up your employee referral program. Here are links to LinkedIn and Broadlook webinars with some advice on how to use these tools to identify and call these people.
- Call Jobs2Web, TalentSeekr, or First Advantage and ask them to create talent hubs for you for your most critical positions. There’s no OFCCP reporting required for these microsites as long as you’re just collecting prospects for broad categories of jobs. Here’s a link to a sample of how your CRM system can be designed to convert a prospect into a candidate using a series of auto-response emails without the recruiter even picking up the phone. We call this the “Virtual Recruiter”(sm). The talent hub with this type of drip marketing is the shape of things to come.
- Figure out how you’re going to attract strong, fully employed experienced people who currently consider their current job as far better than anything you have to offer. Consider that these passive candidates also represent 80% of the total candidate market, and it makes no sense to continue spending 80% of your resources on the other 20%.
- Become preventative. Figure out how to minimize the impact of voluntary turnover at your company. Minimize “disgruntled employee syndrome” in a period where jobs are going nowhere, salaries are being cut, comp increases are nonexistent, and benefits are declining. This is a tough challenge that needs to addressed, not ignored.
There’s a lot to chew on here, but if we’re moving through an inflection point right now, expect the ride to be comparable to a trip aboard the Enterprise through a black hole. Expect it to be much worse, if you decide to ride it out, without considering the consequences.