Kojo Quartey: Turnover rates in a workers’ market
The U.S. economy continues to do well as the unemployment rate for September remains at a decent 3.8%, the same as it was in August. The rate has remained fairly low and stable between 3.4% and 3.8% since February of last year.
Job openings increased from 8.8 million in August to 9.6 million in September. Locally as well as nationally, the common complaint is that many employers cannot find workers to fill open positions. For many, even if they fill their open positions, depending on industry, the workers soon move on to something else in this very volatile job market where jobs abound. imercer.com reports that the average turnover rate for U.S. businesses between 2022 and 2023 was 17.3% down from 24.7% in 2022. The retail and wholesale industry had a turnover rate of 32.9%. These numbers are “voluntary turnovers rates.” People start, they find another job paying more, then within a week or two, they are gone. There are so many opportunities, why be tied down to one place or even go to school when jobs are so abundant?
With high turnover rates, businesses must find new hires to fill the roles. However, according to the imercer survey, 55.5% of organizations (based on 2,102 respondents) say they have difficulty hiring or retaining employees. Of those organizations, the following industries have the highest percentage of difficulty: transportation equipment, health care services, logistics, other nonmanufacturing, other manufacturing, insurance/reinsurance, services (nonfinancial), high tech, mining and metals.
Now, since education is the bedrock of our economy and is not directly reflected above (it may be in services (nonfinancial), I will cull from an article specifically on community colleges. The article, published Jan. 3, 2023, in Insider Higher Ed by Sara Weissman is titled, “The Great Resignation at Community Colleges.” It appears that around the nation, community colleges lost faculty and staff in “droves.”
According to an estimate from the higher education consulting firm EAB, community colleges lost 13% of their employees nationally from January 2020 to April 2022 during COVID. Some left for higher-paying jobs at four-year schools or private industry, and others were attracted to positions with flexible scheduling and remote options. They say, “The result is stalled projects, a near constant cycle of hiring attempts and onboarding processes for new employees, and heavy workloads on those who remain.” At some community colleges, the turnover rates are as high as 39%.
Monroe County Community College is not immune to these turnovers, and I am sure that neither are the other industries, some of which even have higher turnover rates.
Local industries suffering some of the same challenges are especially in manufacturing and health care. Health care organizations can turn to “travel nurses” to shore up their staff, but this amounts to an excessive drain on their finances.
Regardless of industry, there are heavier workloads for those who remain that can certainly impact their mental health, stress levels and morale. According to the article, aside from the impact on employees, “students are increasingly coming to college with mental health problems, a lack of reliable food and housing, and learning losses from the pandemic, which makes having adequate staff to support them all the more critical.”
High turnover rates certainly put more pressure on the system and leadership to “do something.” Some options considered include more competitive wages, more flexible work arrangements and additional perks wherever possible. These options are not only for educational institutions but for any firms faced with recruitment challenges and high turnovers. It is estimated that the American workforce will shrink by 6 million people by 2028, and in Michigan, the Southeast Michigan Council of Governments (SEMCOG) forecasted a few years ago that the only labor growth that Michigan would experience over the next few years would come from immigration.
As we all know, the economy is cyclical. The unemployment numbers will rise and fall, and so will turnovers. In the meantime, leaders have to be very intentional about attracting and keeping quality employees.
Kojo Quartey, Ph.D., is the president of Monroe County Community College and an economist. He can be reached at kquartey@monroeccc.edu.
This article originally appeared on The Daily Telegram: Kojo Quartey: Turnover rates in a workers’ market
