In recent months, many employers have been noticing a trend of candidates and employees “ghosting” them — a term borrowed from online dating that refers to someone dropping out of contact without so much as a goodbye. Recruiters are seeing candidates make it halfway through the hiring process, then simply stop responding to phone calls, text messages, or emails. Chip Cutter, then a managing editor at LinkedIn, was among the first to spot the trend last June:
Where once it was companies ignoring job applicants or snubbing candidates after interviews, the world has flipped. Candidates agree to job interviews and fail to show up, never saying more. Some accept jobs, only to not appear for the first day of work, no reason given, of course. Instead of formally quitting, enduring a potentially awkward conversation with a manager, some employees leave and never return. Bosses realize they’ve quit only after a series of unsuccessful attempts to reach them. The hiring process begins anew. …
Some of the behavior may stem not from malice, but inexperience. Professionals who entered the workforce a decade ago, during the height of the Great Recession, have never encountered a job market this strong. The unemployment rate is at an 18-year low. More open jobs exist than unemployed workers, the first time that’s happened since the Labor Dept. began keeping such records in 2000. The rate of professionals quitting their jobs hit a record level in March; among those who left their companies, almost two thirds voluntarily quit. Presented with multiple opportunities, professionals face a task some have rarely practiced: saying no to jobs.
It’s not only candidates, either; in December, the Washington Post reported that more employees were also “ghosting” their employers, walking out of work one day and not showing up again, with no notice or explanation:
In a session at last week’s WorldatWork Total Rewards Conference and Exposition, Taco Bell Vice President of People and Experience Bjord Erland discussed how the fast food chain has handled turnover—a major challenge in its sector—in recent years. At HRE Daily, David Shadovitz passes along some insights from Erland’s talk:
Leadership was hearing that pay was a major reason people were leaving. But in order to come up with the right game plan, HR knew it needed more data. So it brought in global consultancy Mercer to better understand the key drivers behind the high turnover and identify ways to address it. When it looked at why workers stuck around, Taco Bell, a unit of Yum! Brands, found that a flexible work environment and strong culture were major drivers. As to why people were leaving, factors such as a high level of stress, lack of training and better opportunities elsewhere emerged as a big contributors. …
Well, the big “Aha!” for Taco Bell was learning that earnings were far more important to workers than their rate of pay. Were they working enough hours, including overtime, to bring home a bigger paycheck? (Erland noted that Taco Bell’s pay was competitive with others in the industry.) In light of these findings, Erland said, the company began to increase its use of “slack hours” to increase the amount of employee take home pay. “Turnover improved when employees were able to bring home more earnings,” he said.
For organizations that derive most of their business value from their talent, the departure of a single employee can be very costly, even more so if it comes suddenly or unexpectedly. In this talent-focused business environment, the traditional practice of giving two weeks’ notice of intent to quit can leave employers with too little time to manage and prepare for an employee’s departure or begin the search for a replacement. Talent Economy associate editor Lauren Dixon highlights the different course being charted by the Chicago-based employee communication software company Jellyvision:
Jellyvision uses what it calls a “graceful leaving” policy to help both the organization prepare for open positions, as well as departing employees to have a support system for their desire to move on. When an employee begins to job hunt, considers applying to school, thinks about moving, etc., the company’s policy allows them to set up a conversation with their manager about the idea and to explore potential next steps. Managers can then provide contacts for networking and accommodate interview times — all while the employee does their work as usual. …
This policy also allows managers to better understand what the employee wants from the job, and the two can potentially make that change internally. For example, if an employee considers leaving for a managerial role, they could explore that opportunity within Jellyvision, thus retaining the worker.
Dixon hears from several experts, including our own Brian Kropp, who agree that approaches like Jellyvision’s “graceful leaving” are preferable to giving employees the cold shoulder once they announce their plans to leave. Letting employees know it’s OK to leave makes them more likely to give ample notice and even participate in training their replacement when they do, and increases the likelihood that they will return to your organization later on in their careers.
A recent survey from the New Talent Management Network highlights the difficulty many employers are having when it comes to implementing an effective talent analytics program. The survey found that 85 percent of organizations were already conducting people analytics, while of those who aren’t, 69 percent plan to start in the next 12 months, meaning that over 95 percent of organizations are expected to use some type of people analytics in 2017.
Unfortunately, the authors write, most organizations haven’t gotten very far beyond the stage of establishing an analytics function, most are using relatively unsophisticated tools, and most are only collecting and analyzing basic data on metrics like turnover, time to hire, and engagement. In summary, their top-line findings were as follows:
The New Yorker’s James Surowiecki observes that average CEO tenure has fallen in recent decades, driven to a significant extent by boards’ greater willingness to fire CEOs over poor performance. The “embattled CEO,” he writes, appears to have supplanted the “imperial CEO”of yore:
The breakdown of the old order began more than thirty years ago, but things have accelerated since the turn of the century. The Sarbanes-Oxley Act, passed in 2002, required greater disclosure to investors, and increased the independence of corporate boards. “In the old days, boards were often loyal to the C.E.O.,” Charles Elson, a corporate-governance expert at the University of Delaware, told me. “Today, they’re more loyal to the company.” The rise of activist investors—who campaign aggressively for change when they’re not satisfied with performance—has exacerbated the trend. One study found that when activist investors succeed in winning seats on the board of directors the probability that the C.E.O. will be gone within a year doubles. …
The predicament of modern C.E.O.s may seem surprising, given their prominence and lavish compensation. Top executives everywhere are paid more than they used to be, and the U.S. has led the way; American C.E.O.s earn, on average, two to four times as much as European ones and five times as much as Japanese ones. Yet it’s precisely these factors that make C.E.O.s vulnerable, because the expectations for their performance are higher.
Surowiecki also notes that in the age of social media and the insta-scandal, a CEO can create a PR nightmare for their company with just a few poorly chosen words. He points to recent examples of corporate heads rolling over ill-considered public statements, such as the fall of Saatchi & Saatchi executive chairman Kevin Roberts in late July. Directors may also be more sensitive to the risks posed by scandal-prone CEOs in light of recent research finding that such scandals can have an impact on an organization’s reputation long after the offending executive has been shown the door.
At the Conversation, Irit Alony discusses a study she conducted in which she applied a method commonly used to predict divorce to predict employee turnover instead. As it turns out, she writes, unhappy employees end up quitting their jobs for reasons strikingly similar to why unhappy marriages fall apart:
Participants in this turnover study were first interviewed, and their their attitudes (like job satisfaction, commitment, intentions to quit, engagement, and burnout) were measured. A year later, their attitudes were measured again, and another year after that, the study looked at who left and who stayed. The study found that employees who left their jobs didn’t use the following coping mechanisms: they didn’t balance the good with the bad, they didn’t genuinely accept that bad things are just part of life, they didn’t avoid lengthy discussions of the negatives and they didn’t express hope. …
The predictions of employees who leave organisations in this research are very similar to predictors of divorce. Past research has shown that when there are forms of negativity in a marriage, like disappointment, withdrawal, hostility, or contempt, you know the couple is at a high risk of divorce. Couples who not only accept their struggles but even celebrate them remain happily married, and so do couples who successfully avoid conflict.
David McCann at CFO Magazine takes a look at two groups—Principles for Responsible Investment and the Human Capital Management Coalition—that are working to encourage more organizations to publicly disclose human capital metrics like turnover, absenteeism, and employee engagement. It’s an uphill battle for these advocates, McCann writes, as not everyone is convinced that these metrics are worth using or disclosing:
[A] former finance and marketing executive waves off the notion that such data is a good barometer of management quality. Tom McGuire, now talent strategy leader at Talent Growth Advisors, says: “Whether a company is well-run is a good question, but a more relevant one is, how do its people impact its value? To understand that, you need to look at the company’s intellectual capital—patents, brands, and proprietary technologies and methodologies. The only source of any of those things is people.”
For that reason, McGuire also quarrels with the idea that disclosure about a company’s entire workforce has much value. … Similarly, [Jeff Higgins, CEO of the Human Capital Management Institute,] points out, if you lose 20% of management in a year, that’s way too high. Losing 20% of your call-center workers is OK. It’s also fine if 20% of a retailer’s customer-facing staff is lost. But it’s disastrous if a professional services firm has 20% turnover among customer-facing professionals. The metrics that come out of the investor groups’ engagements with retailers may be used to compare the companies with one another, but it’s unknown how granular the information is, so therefore it’s unknown how useful such comparisons will be.
This discussion shows that investors are starting to understand the importance of human capital when looking at the value of a company and looking for ways to get data and information related to that. But actually understanding what the metrics are saying and how to interpret them is harder than it may seem. This might be a place where talent analytics professionals and HR leaders more broadly can step in and educate their peers in corporate leadership about not only which metrics to share but also how to think about them. People data is only going to be as strong as the story built around it.