More Low-Wage Workers Are Job-Hopping

Employers need to consider training, compensation as retention strategies

Kathy Gurchiek By Kathy Gurchiek September 26, 2019
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​Lower-income workers—defined as earning a household income of $60,000 a year or less—are changing jobs more frequently. Twelve percent of lower-wage workers moved to new jobs in July, the highest level recorded since July 2014, according to a New York Fed survey.

"The survey results continue to provide evidence that increased competition for labor among employers has led to wage gains for workers, but this competition doesn't seem to have triggered increases in non-wage benefits," the Fed report also said.

Job changing among higher-income workers, meanwhile, has declined since early 2018, the survey found.

The turnover among lower-wage workers is a signal to organizations to re-evaluate their employee retention strategies and workplace culture.

While the prospect of higher wages and promotion opportunities are the main draw for these employees to switch employers, a toxic workplace also can propel workers out the door. The High Cost of a Toxic Workplace Culture: How Culture Impacts the Workforce—and the Bottom Line, a report that the Society for Human Resource Management released Wednesday, found that 58 percent of employees who quit a job due to workplace culture say that their managers are the main reason they ultimately left. The cost of this turnover: $223 billion over the past five years.

SHRM Online has collected the following articles from its archives and other trusted sources about job-changing among low-wage workers.  

Lower-Income Americans Are Job-Hopping More Often 

The share of lower-income Americans leaving their jobs for new ones leapt earlier this year, pointing to rising confidence in the U.S. labor market among workers who were left behind earlier in the expansion.

More broadly, workers are benefiting from the longest U.S. economic expansion on record. The unemployment rate among Americans without a high-school diploma has fallen steeply over the past three years, and the rate for black women fell in August to the lowest level on record. Both groups had trailed behind others for much of the expansion, which began in mid-2009.
(Wall Street Journal)   

[SHRM members-only toolkit: Managing for Employee Retention]   

Get Ready for the Low-Wage Worker Revolution  

Across the country, low-wage workers are finding their voice and finding purpose, after long simmering in silence. Savvy business leaders are keeping an eye on these developments while revamping their policies to keep this significant chunk of their workforce engaged.

Among U.S. adults 25 years or older who are not self-employed, 16 percent earn less than $12 per hour.

One tactic the best employers use, according to a paper from the MIT Sloan School of Management, is to offer workers paths to develop new skills and move up the ranks.
(MIT-Sloan)   

To Have and to Hold 

Companies are trying every tactic, from raising salaries to bolstering benefits to offering more training and education, to retain employees amid one of the tightest labor markets in the past 50 years. Inadequate career development is the leading reason people leave their jobs, with 21 percent of those interviewed citing it as the driving factor. Those employees expressed frustration with the lack of growth, development opportunities and advancement in their jobs. 
(SHRM Online)   

Why Wages Are Finally Rising, 10 Years After the Recession  

Over the past year, low-wage workers have experienced the fastest pay increases, a shift from earlier in the recovery, when wage growth was concentrated at the top.

The faster growth at the bottom is probably being fueled in part by recent minimum-wage increases in cities and states across the country. Research from the Economic Policy Institute found that over the past five years, wages for low-wage workers rose 13 percent in states that raised their minimum wages, compared with 8.4 percent in states that did not. 
(New York Times)   

Flexible Work Critical to Retention, Survey Finds  

"In a tight labor market, companies cannot afford to ignore the value employees place on having flexible work options, but leaders also can't dismiss the very real bottom-line impact offering flexibility has on their employees' productivity and retention rates," said Sara Sutton, founder and CEO of FlexJobs.

"The flexible job market is currently very robust, so flexible-job seekers are also feeling empowered to seek jobs that are more compatible with their life."
(SHRM Online)  

Viewpoint: Low Wage, Not Low Skill: Why Devaluing Our Workers Matters

Millions of people in low-wage jobs will need new skills for future work. Middle- and high-wage jobs will be affected too, but there is cynicism that low-wage workers are intrinsically unable to master new skills.

More than a skills gap, we have an opportunity gap, punctuated by a U.S. labor market in which adults who lack selective college degrees and professional experience are pre-emptively "screened out" based on their history.
(Forbes)





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