Workforce Retention: A Growing Concern

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Author(s): Meisinger, Susan

While the U.S. economy is currently robust, employers may soon face major challenges with employee turnover and retention. The steadily improving job market and the coming retirement of the baby boom generation are on a convergence course, potentially resulting in an expanding economy restrained by a shrinking labor pool-a scenario likely to produce an excess demand for talent, drive up recruiting costs and force organizations to rethink how they maintain their workforces.

These projections are supported by the results of two separate studies from late 2005: an online job recovery/job retention poll of HR professionals and employees conducted jointly by the Society for Human Resource Management (SHRM) and CareerJournal.com, a web site of The Wall Street Journal; and a survey of management-level HR professionals by Monster, the Internet-based job search company.

Adding credence to the outlook are figures from the U.S. Bureau of Labor Statistics, which point to a drastically reduced annual growth rate in the U.S. workforce between 2000 and 2050, due largely to the baby boomers' looming retirements.

In the SHRM-CareerJournal.com poll, 2005 KS. Job Recovery and Retention, nearly two-thirds (65 percent) of HR professionals reported being concerned about the number of voluntary resignations from their organizations since the start of 2005. And the response from employees-of whom more than three-quarters (79 percent) reported they were searching for jobs-indicates that this concern is well-founded.

In the Monster study, Retention Strategies for 2006 and Beyond, more than two-thirds (70 percent) of HR managers said that employee retention is a primary business concern, while 40 percent reported an increase in worker turnover during the 18 months prior to October 2005. And while HR managers currently find employee retention a business challenge, the Monster study concludes that long-term demographic changes, such as the retiring baby boomer population, have the potential to aggravate the situation.

Both studies suggest strategies for improving retention, including increasing compensation and benefits, providing opportunities for professional growth and development, fostering work/life balance, and improving communication with employees.

From these separate study results, it's evident that HR professionals need to focus on retention strategies-starting now. When experienced employees walk out the door-whether by retirement or resignation-valuable experience and institutional knowledge leave with them. Given the current difficulty in recruiting and hiring qualified workers, it's far better to keep the talent you have for as long as you can.

Online Resources

For links to the Monster and SHRM-CareerJournal.com surveys, see the online version of this column at www.shrm.prg/hrrnagazine/ 06April.

© Copyright Society for Human Resource Management Apr 2006
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