Send to KindleMultiple studies claim that a majority of employees quit their jobs because they aren’t happy with their boss. Do people quit their jobs voluntarily in today’s economic environment? Recently, I was challenged on my assertion that an employer is doing pretty well to hang on to a good employee for more than 5 years. Now that’s entirely my number and is a compilation of many different reports and research I’ve studied. I arrive at 5 years because it’s a median figure that takes into account younger workers who are proving to be more mobile, and older workers who traditionally stay a little longer.
The question is, with the economic and employment situations in turmoil, and many experts predicting limited job opportunities in the near future, while some even predict catastrophe still waiting in the wings, do people really quite their jobs if they don’t have to. My experience and anecdotal evidence indicates they do, but I wanted something a little more concrete. So, I turned to the Bureau of Labor Statistics (BLS). The numbers paint an interesting picture. First, they show less than 2% of employees quit their jobs in the months of the study; from April 2009 to April 2010. That seems pretty low; maybe I shouldn’t be concerned after all. But a look at the numbers behind the percentages tells an interesting story.
BLS figures project that in April of 2010, 1.9 million people quit their jobs. These are not people who were laid off or fired; those are covered in a different set of numbers. These are just employees that quit. (These numbers fluctuate over the period of the report, and the April projections are the highest since April of 2009. The highest difference is about 243,000 between January 2010 and April 2010.) It’s very difficult to say how many quit because they didn’t like their boss, but research indicates it’s fair to say that at least 50% fall in that category: and that’s probably a pretty conservative estimate. If that’s so, (and again, I think it’s very conservative) almost 1 million people just in April of 2010 quit their jobs because they didn’t like their boss. Though there are too many variables to assign an accurate dollar cost figure, I think it’s useful to look at the potential. Various studies tell us that replacing an employee can cost anywhere from 50% to 200% of their annual salary. Figure a very low-end salary of $24,000 per year. Half that is $12,000 which means that a conservative estimate of the cost of replacing 1 million of the employees who quite in April of 2010 is more than $12 billion dollars!
While perhaps these numbers are a little difficult to grasp, they demonstrate that while employee turnover because of people who quit doesn’t seem all that high in the aggregate, it is costing a lot of money, and no matter how many employees you have, you’re paying that money when one quits because they aren’t happy with their boss.
My own experience tells me that bosses are ineffective (and therefore disliked) by employees for two reasons. First they don’t receive sufficient, or sometimes any, training in managing the human resource. Second, they often don’t know what the company’s mission really is, so they find it difficult to motivate their employees to help accomplish that mission. Together, those two failings seem to be costing companies over $12 billion a month!
