First-year worker quit rate is 45%: what’s the credit potential of your jobs?

0 Shares

A close friend of mine quit her job earlier this month. After three years with her previous employer, one of Australia’s largest companies, she accepted a new role with a much smaller company. Although the benefits were fewer she felt the opportunities to expand her skill set were greater.

Unfortunately, once she started work with her employer it was quickly clear that her new boss was significantly out of his depth and the resulting dysfunction was beyond her pay grade to resolve.

She quit after three weeks.

My friend’s demographics (single mother over 50 with a primary school- aged child and no family living in the state to regularly help out) meant that she didn’t just need a new job well-matched to her specific skill set, she also needed a flexible employer, especially with respect to working from home.

One week later she had a new job that met both of those requirements.

This week she started her new job; and, based on her first week, she couldn’t be happier with her choice.

My eldest son quit his first office job late last year, after nine months of employment.

Like my close friend, my son had not secured another job at the time of quitting.

Two weeks after resigning my son landed a new job (which he remains in and constantly tells me he’s great at…..).

Employee turnover data from the US reveals that 45 per cent of workers quit their jobs in the first year.

Turnover data about the Australian workforce (from AHRI) does not provide an equivalent first-year-quit-rate but given both the US and Australian data on all-of-industry annual staff turnover is the same (18%) you can be confident that around 45 per cent of Australian workers don’t last 12 months in their new job.

Both sets of data are drawn from pre-COVID times and we already know that US workers are quitting at record rates this year.

Record quit rates lead to the flow-on conclusion that employees lasting less than a year in their new job will climb above one in two.

This is bad news for employers who are already struggling to fill vacancies.

It’s also potentially very bad news for agency recruiters if many of their placements don’t outlast their credit period (typically three months for skilled roles).

The position my close friend quit was one found for her by a recruiter. The recruiter encouraged her to stick the role out for longer to give it a decent go but my friend, after thirty years in the workforce, recognised the entrenched dysfunctional company culture with no hope of any short-term change.

One of the most demoralising things for a recruiter to deal with is a placement that goes credit; especially one that took a long time to fill or one for which there is a very tight candidate supply (usually, but not always, these two factors go together).

I still remember the sinking feeling, familiar to all perm recruiters, of starting another recruitment process for a role that I had already been paid for.

In a market awash with jobs (although with the current lockdowns across a number of Australian states there is a temporary pause in the recruitment for many vacancies) you are well advised to pay even more attention to the ‘credit potential’ of any role you recruit.

The credit potential of a role is likely to be slightly different to the range of reasons that all departing employees may offer for their resignation.

It’s typically when an employee has been with an employer for over nine or twelve months that reasons such as ‘lack of development opportunities’ or ‘dissatisfied with pay’ or ‘poor employee recognition and feedback’ or ‘lack of diversity & inclusion practises’ are offered as reasons for leaving.

These reasons are unlikely to feature highly in any employee who is quitting after less than three months in the job.

The reasons employees quit quickly are dominated by factors that are difficult to ascertain in an interview but almost immediately become apparent on the job.

Significant ‘quit quickly’ factors (ie high credit potential) are:

Poor, or non-existent, induction and onboarding
Longer hours than advised
Colleagues gripe about their job and boss
Colleagues resigning
High absenteeism
Manager doesn’t regularly check-in on new employees to see how they are settling in
Manager is incompetent
Lack of humour or light-heartedness among colleagues
Flexible work options have a, previously undisclosed, qualifying period
Lack of appropriate resources to do the job properly (eg early-version software and hardware, poor workplace ergonomics etc)
Overall cultural dysfunction most obviously demonstrated by a general lack of purpose, care, and competence throughout the organisation.

The best recruiters make it their job to not just take a qualified job brief but to undertake appropriate due diligence to discover the credit potential of the role and proceed accordingly.

Unless you pay extra attention to the credit potential of a role, given a workforce emboldened by the wide availability of vacancies, you are likely to be re-filling a demoralising proportion of your placements in the foreseeable future.

Humour: the underrated glue of office culture

Low pay, scarce resources and little respect: who wants this job?

The largest-ever candidate shortage is looming – are you ready?

0 Shares

Posted in Recruitment