The answer is not long. Employment has been hit hard over the last couple of years for sure. The impact of Brexit, the Pandemic now a cost of living crisis; it’s no wonder how many people’s careers have been affected.
Grass growing under foot? Chance would be a fine thing!
That pretty much sums it up. Out of all our respondents only 11.5% have been in a job for 5 or more years.
Now, it’s not uncommon for people to not want to stay in one job for too long. Or they may even be talented enough to move up the employment ladder quickly.
However, over 11% is alarmingly low especially when you consider the last two years worth of lockdowns. In the height of a pandemic it’s highly unlikely most people outside that margin left their jobs for a promotion or a better offer.
Is there an Employment issue?
When 27.9% have been employed for less than a year? And the same amount of people claimed they had only been employed in their current role between 1-2 years totaling almost a 56% all together. I would say so.
As this implies that the turnover for employers must be high. As employment lasting only 2 years or less cannot be considered normal.
Especially when half of those numbers are within the last 12 months where we have had no lockdowns. Furthermore, according to our Prime Minister employment is at an all time high!
This is further supported by job vacancy numbers which reached a record high between February and April.
So clearly there is an employment issue because these stats don’t add up… or do they?
High Employment + Short Range Job Longevity = Widening Pay Gap
A couple of weeks ago, I read an article on the BBC that reported the pay gap between bosses and staff is widening.
And just like that, everything makes sense! Stats that show employment is at an all time high. The majority of people in our polls saying they have held a job for less than 2 years, this is the end result and it makes sense.
How does that work? Well look at it this way: if an entry level employee joins a company how long does it take them to really start working their way up the company ladder, a year or 2? And how many more years before they have really progressed within the organisation?
The problem is; from our stats paired with government research, people are not in the role long enough to really climb the ladder. Whether the working culture is so bad employees leave by choice or they are let go by the company.
Either way that usually means they will be starting a similar role in another organisation. Probably around the same level of the role they left and on a similar rate of pay…
Yet little changes for the business (in the short term), they quickly replace the staff they have lost with new eager workers. Then in the next 6 to 24 months they repeat the process. Productivity is maintained.
There is little-to-no cost in promoting staff to higher paid, yet business and profits may continue to grow and therefore higher executive salaries increase. And this could be one reason why the gap is widening.
Yes the employment rate is great, but the wages are low and during a cost of living crisis that’s a huge employment problem. And it can result in severe consequences for businesses operating this way.
What is the impact for Businesses?
No good ever came from a company having a high attrition rate. It signals to three vital components of business; job seekers, target audiences and potential partners that they do not value staff.
It is never long before high staff turnover leads to a bad business reputation and raises flags for the aforementioned parties. Job seekers do their research, if they see employees don’t last long and why; they won’t want to work for an employer like that.
The same goes for potential business partners, in a society that is focusing more on the way staff are treated, companies won’t want to be guilty by association. Or partner with organisations whose values do not align with their own.
Productivity may be maintained in the short term through eager new employees wanting to impress. But this will ebb away when managers and other employees grow demoralised by having no consistent team and the constant need for training. Then you will see the quality of service decrease.
The Great Resignation and The Big Quit
Now this may come across laying the blame at the door of businesses. That wouldn’t be totally fair; brexit, the pandemic, the current cost of living crisis, these have had an effect on employers and they have had to make tough decisions.
Many businesses have struggled to weather these storms and are now trying to recover, which is not easy. However, the grace period where understanding of companies having high attrition as a result of lockdowns is quickly coming to an end. It will soon be an unacceptable excuse as to why businesses can’t or rather won’t retain staff.
Last year we talked about the ‘Great Resignation’ where employees where seriously considering quitting their role at the time. That seem to have happened if we look at the results of our polls.
This year I have read about a similar movement called ‘The Big Quit’ with employees having similar intentions.
And with job vacancies being at a record high it shows they are following through (although of course the government puts the positive spin on that as a high growth.)
Employees are making their positions clear; provide opportunities or they will look elsewhere and businesses can’t afford to not respond.
The ‘Mutable’ Solution
That’s not as simple as businesses saying “okay we’ll start promoting, raising salaries and providing more flexible working”. That’s neither practical nor sustainable to do all at once.
But there is a solution, one that solves this problem in the present and future. Businesses need to start aiming to become ‘Mutable’.
What is ‘Mutable’? It means being in a stage of constant transformation. Where rather than businesses competing with others they constantly compete with themselves.
This starts with having staff work to an output model rather than an hourly rate. This would especially work well for companies struggling with high attrition.
By buying into a shared workforce, a company can have employees complete weekly tasks and once they are finished the employees have the ability to earn even more elsewhere. Which would fix the turnover issue.
The future of employment, the future of working and the future of business is vastly different from the present. The future is ‘Mutable’. For more information on starting your Mutable journey click here.