Training seen as key strategy to combat turnover

A healthy if not spectacular jobs report from the Department of Labor supports mid-market employer plans to bolster training programs to keep employees from jumping ship. The June jobs report showed 223,000 jobs added to the economy, and a modest (two-tenths of a percent) drop in the unemployment rate. Although wages held steady, they were still up 2% over June 2014.

A just-released poll of mid-market senior executives by Deloitte found that “confidence in the economy has encouraged employees to pursue new opportunities and increased voluntary attrition,” according to a summary of the firm’s 2015 Report on America’s Economic Engine.

That report, based on a survey of 525 mid-market executives, found that while most employers are not planning significant increases in their full-time staff, two-thirds “say they have noticed an increase in voluntary staff departures.”

That represents a large jump from the 43% reporting the same phenomenon two years before.

Also see: Employers fearing high turnover

The report suggests that mid-market companies may be more vulnerable to such attrition, particularly among younger employees. Why?

“Entering the job market with a smaller working environment has given them the confidence to try their skills in new channels of business markets, thus increasing voluntary departures,” commented Jeffrey H. Alderdon, a Deloitte principal. He also noted that “more of the baby boomers are leaving the workforce earlier and not waiting until traditional retirement age.”

Also see: 7 tips to better recruit, retain millennials

Asked whether they agreed with the statement that it’s hard to find employees “with the skills and education to meet our needs,” 22% of the middle-market executives “strongly agreed” and 45% simply “agree” with the statement. A year earlier, those numbers were 12% and 40%, respectively.

When asked which investment in talent they are most likely to make in the year ahead, the most common response (52%) was “training,” followed by “increase in full-time employment” (45%), increase in compensation (32%), increase in part-time workers (21%), and “more hours from existing employees” (18%).

Also see: DOL overtime rules seen as regulatory, financial burden for employers

Nevertheless, when asked to identify which investments offer the greatest potential to boost corporate productivity, “technology” was picked by 67% of survey respondents, followed by “talent” (50%), R&D (37%) and “plant and equipment” (34%). However, an investment in technology often accompanies an investment in training to enable employees to harness that new technology to bring about hoped-for productivity improvements.

Following are some additional survey highlights indicating expectations of a generally positive business outlook:

• 34% expect robust or above average economic growth over the next year, up from 21% a year ago.
• “Rising health care costs” continues to be highly ranked as one of the “greatest obstacles to U.S. growth” over the next year, chosen by 50% of survey respondents, although that represents a large drop from the 63% who chose that factor a year ago.
• Other top-ranked impediments to U.S. growth were federal and local budget challenges (49%), “high tax rates” (44%), and “lack of consumer confidence” (40%).
• A year ago “lack of consumer confidence” was a greater concern among executives, when 45% identified it as a drag on the economy.

Richard Stolz is a freelance writer based in Rockville, Maryland.