The document discusses turnover in the US labor market. It notes that while the unemployment rate has remained above 9% for over 2 years, the labor market is far from static with over 4 million people starting new jobs and over 2 million voluntarily leaving jobs each month. This high level of turnover provides opportunities for companies to reexamine roles and restructure their workforces to change direction. The article provides an example of how turnover planning can be used to significantly change a company's focus within 2 years.

1. Submitted by: Joe Jiamachello, CSAM
UNITED STATES
Turnover Leads to Opportunities
Looking at an unemployment rate that has been stuck at Management Recruiters of
more than 9 percent for over two years, it would stand to Cleveland-Southwest
reason that the employment market is static. Little more than >Experts in Global Search ™
100,000 jobs are being added each month to an economy (330) 273-4300 ext. 103
TopGun@MRCSW.com
that employs more than 130 million people.
Yet, the labor market is far from static. Total employment in
the United States is turning over at a rate of more than 3 Recent MRINetwork® Analysis
percent per month. That means each month, more than 4 Even with the unemployment rate unchanged at 9
million people start a new job and more than 2 million people percent, Jason Breault, managing director of LifeWork
voluntarily leave their job. This may seem like taking one step Search has noticed an increased level of confidence in
forward while taking one step back, and in terms of lowering his candidates. "This year we have seen candidates
overall U.S. unemployment, it is. finally taking control of their growth potential, leveraging
frustrations in their current roles and taking advantage of
IS S UE 9
At the same time, every month, 4 million hiring managers are the opening job market. Many employees feel they have
looking at their businesses and the economy and deciding hit a wall in their current roles, yet at the same time have
they would be better off hiring someone. But when they make been pushed harder, putting in longer hours, and taking
that decision, it’s not about just replacing a warm body; it's an on more responsibility without being properly
|
opportunity to change the direction of their workforce. compensated."
V O L U ME V
Jason Breault, LifeWork Search an MRINetwork Affiliate
“A few years back, when someone resigned, HR pulled out As quoted in Supply & Demand Chain Executive
the old job description and started to replace them. Now August 12, 2011
when that same person leaves, a manager’s first thought is
more likely to be, ‘How should this role change,’” says Rob
Romaine, president of MRINetwork. “At a time when many Notable International Events
departments have a difficult time adding positions,  China’s manufacturing index rose from 49.3 to 49.8
reexamining every job description as it opens up can be the in August in a preliminary reading. The figure still
lowest friction way to reshape a workforce and with proper indicates a contracting manufacturing sector in
S EP T EM BE R | 20 1 1
planning, large changes can happen relatively quickly.” China, but at a very slow and improving rate.
In the professional and business services sector the monthly  GDP growth estimates for Latin America were
turnover rate is closer to 5 percent, which means that with a recently cut by Morgan Stanley, from 4.6 to 3.6
clear workforce plan in place, a company’s entire focus can percent across the region, indicating a deceleration
be altered in less than two years. of what was seen as a dangerously overheated
economy. By mid-2012, economists project Brazil
“Backfill workforce planning requires more foresight than just will begin cutting its benchmark interest rate, the
eliminating one position, while adding another. However, it SELIC, from its current 12.5 percent which was set
maintains the continuity of business operations, lowers to help slow the economy.
separation costs, and avoids potential morale or public
relations issues,” notes Romaine. on which positions open up, and what candidates are
available. The plan itself should be less about creating a
In a backfill workforce plan, the target for where the pre-defined organizational chart and more about the
organization is heading needs to be defined, but the path on capabilities and capacity of the target organization.
how to get there must remain dynamic—changing based both
“When someone leaves the company, you start by looking
at what capabilities that person had which are required
U.S. Monthly Turnover Rate immediately,” says Romaine. “Then you can work with a
search consultant to understand what talent is currently
available to fit your basic requirements and which additional
capabilities of the target organization you may be able to
include in the role.”
Working with an experienced industry-specific search
consultant can bring needed expertise to both formulating
Source: U.S. Labor Department and implementing a backfill workforce plan.
“Redefining positions as they open up can lead to only the
priorities of the day being addressed,” notes Romaine.
“Working with a search consultant to create a workforce
plan with a long-term horizon makes larger, more
substantive changes possible.”
© 2011 Management Recruiters International, Inc. An Equal Opportunity Employer. Each office is independently owned and operated.

2. “Candidates’ primary concern in changing roles today is job
security,” says Hill. “Candidates are highly reluctant to explore
UNITED KINGDOM opportunities—it often takes three or four requests before a
passive candidate will even provide a CV. When recruiting
today, our most important job is to sell the stability of the
An Abundance of Caution Slows Economy company. We have to highlight their financials, show that they
are on solid ground, or that it is investing heavily in R&D.”
When riots broke out across England—first in the Tottenham
section of London, then in other cities throughout the country—
Considering that actively recruited candidates are dragging their
the blame was widespread. Some attributed the spark of the feet, it’s no wonder that very few qualified candidates are
riots to government austerity measures including cuts to
applying for posted positions. Once a candidate is found,
education; others noted the high youth unemployment—which
though, risk-averse companies are delaying the hiring process
has resulted in other civil disturbances in Europe and the Middle
further.
East over the last year. In a very literal sense, though, the riots
started after Mark Duggan, an alleged drug dealer and gang
“Employers are conducting more extensive background checks
member, was shot and killed during an attempted arrest.
and vetting candidates to a greater degree than ever before.
More people want to be involved in the hiring process and
“I think the riots and looting were opportunistic and little more companies’ attitudes are closely tied to short-term market
than that,” says Sandra Hill, managing partner of The Hill
factors,” says Hill. “The mid-August equity market turmoil
Group, an MRINetwork affiliate in Manchester. “The economic
caused many firms to reevaluate their hiring plans, some going
situation throughout the UK is difficult, but the riots have given it
as far as re-reviewing every open position.”
a more desperate appearance than is actually justified.”
“Despite all the rightful concerns both businesses and
Current estimates show that the UK’s gross domestic product
employees have, we see green shoots,” says Hill. “The UK auto
grew by 0.2 percent during the second quarter of 2011, down
industry is supposed to be in horrible shape, yet, one of the
from 0.5 percent growth during the first quarter. Some have largest English auto companies is currently adding more than
attributed the slowdown to an increase in the value added tax
1,200 positions to its UK operations this year. While the
early in the year. Yet, as Hill notes, shopping centers are
aerospace industry is also said to be in a slump, the Paris Air
staying full and British residents are taking more vacations this
Show in June was one of the most successful ever for Airbus.”
year than in the last several.
“There is an abundance of caution in the market,” says Hill. “It is
While confidence may be returning for workers who currently
slowing things down, perhaps prolonging the downturn.
hold positions, confidence has not returned to the labor market
However, in the end it is just caution. As business continues to
as a whole. be conducted, the necessary confidence will begin to return.”
The ancillary services that keep these agricultural operations up
ILLINOIS and running range from the manufacture of heavy-duty farm
equipment, fertilizer products, development and distribution of
hybrid seeds, and food processing are all tethered to the
Agriculture Provides Stability in Downturn soil. Like in most industries throughout the country, they are
seeing a growing demand for talented professionals.
Like most of the country, the unemployment rate has remained
stubbornly high in Illinois since the recession’s end. While it fell
“During the downturn, companies cut deep—often far deeper
to 8.7 percent this spring, it edged back up to 9.5 percent in
than they should have,” notes Ahlstrom. “Today, many are
July. Some of the largest job losses have been in the
reversing course, and are beginning to add to their workforce
government, leisure and hospitality, and construction sectors;
again. However, companies are being highly selective about
many of them in Chicago and its outlying suburbs. Once you
new hires, adding resources in a carefully managed process as
leave the Chicago metropolitan area, however, a different
they move toward recovery.”
economy exists.
Like much of the rest of the country, rural Illinois’ best
“Downstate Illinois has a vital agricultural industry, and some
opportunity to bring down its unemployment rate will be through
significant manufacturing,” says Craig Ahlstrom, president of
new business openings and innovation. A hopeful sign Ahlstrom
Perfect World Search, an MRINetwork affiliate in Peoria.
has observed from real estate agents in the Peoria area is an
“Peoria, specifically, is an important medical hub, with three
uptick in the commercial real estate market they serve.
major hospitals, a branch of the University of Illinois School of
Medicine, and related health-services businesses.”
“Smaller manufacturers that scaled back to nearly skeleton
crews during the recession are now able to start hiring again,”
As a whole, the economy in downstate Illinois is blended –
notes Ahlstrom. “Providing these companies have not scaled
some sectors are thriving, others are not doing so well. While
back their physical work space, they are likely to have the
some manufacturing companies have voiced interest in
capacity to ramp up production quickly and economically."
relocating to open-shop states, agriculture has become one of
the most stable segments of the Illinois rural economy.
In central and western Illinois, like many rural areas across the
country, the recession hasn’t made as much of an impact as the
Nearly 20 percent of all U.S. exports come from agriculture, and
longer-term economic shifts that have affected many cities
Illinois is one of the largest providers of those exports, leading
across America. In Illinois, that trend may be at last starting to
to a robust industry in the state. Nearly 80 percent of the state’s
change course as corn and soy prices remain high, global
total land area is covered by farms.
demand continues to grow.
Provided by MRINetwork www.MRINetwork.com | Edited by Sean Muir (215) 751-1762 Sean.Muir@MRINetwork.com