Statistics from the Labor Department for February and March showed an interesting twist, one that should serve as a siren call to employers. More workers quit their jobs than were laid off during these months. People quitting their jobs is not typically newsworthy. But people quitting their jobs in this employment market is worthy of closer scrutiny.
Since the start of the great recession, employers have been shedding jobs in unprecedented numbers to offset sagging revenue and preserve margins. For many businesses, labor cost is a significant line item expense on the profit and loss statement and people have been managed as such. This often means being managed out. This does not make business leaders bad. On the contrary, they took the necessary steps to ensure the ongoing viability of their enterprises and thereby secure the employment of the remaining employees.
What can be bad, however, is for leaders to fall into the trap of believing that employees have permanently lost leverage. Their leverage is typically exerted by their feet, as in walking out the door. During the height of the great recession however, there was nowhere to walk to. This appears to have changed.
Yes, unemployment actually rose last month, from 9.7% to 9.9%. But this was because previously discouraged unemployed workers re-entered the marketplace in response to the 290,000 jobs that were added to the economy during the month. Make no doubt about it, the tide has turned in the job market.
So must the practices of employers who are counting on market forces to keep their workers in place. Workers matter again. A lot.
Employers would be well advised to dust off their employee relations playbook. Begin a more active dialogue with your workers. Listen to their concerns. Better yet, ask them to participate in solving tough business issues. Treat them with the respect they deserve. Know they they are interested stakeholders in the business. Either you can engage them in the business of your business, or someone else will.