Job turnover increases in recovering market

New jobs added slowly as employers expand

  • Patrick McAvoy, 28, Patterson Park, is leaving his job with the University of Maryland Baltimore for a position with the Downtown Partnership of Baltimore. He will be doing event coordinating.
Patrick McAvoy, 28, Patterson Park, is leaving his job with… (Kim Hairston, Baltimore…)
June 22, 2013|By Lorraine Mirabella, The Baltimore Sun

Patrick McAvoy knew his job had some drawbacks. As a contract employee at the University of Maryland, Baltimore, he lacked benefits and long-term stability, but he stayed on as an events coordinator for three years, hoping to be hired full time and seeing little opportunity elsewhere.

This year, the job market shifted, and by spring, he had two offers.

"It was pretty stunning. You send out resumes so many times and don't hear anything back. Then you hear back from multiple places, and all of them are good opportunities for your future," said McAvoy, 28, who turned down an information technology job at the Johns Hopkins University to be an events planner for the Downtown Partnership of Baltimore.

McAvoy's good fortune illustrates a significant shift in the slowly recovering job market. As hiring picks up across the nation, more people are leaving their jobs voluntarily — a promising sign for workers, companies and the economy.

The "quit rate" — the percentage of American workers who leave jobs voluntarily — has risen to the highest level in four years. That shows that workers are more confident about finding new jobs, said Sophia Koropeckyj, an economist with Moody's

"When people change jobs, they [usually] change to better jobs and change to higher-paying jobs," Koropeckyj said. "When people don't change jobs, they can be dissatisfied, and morale is low. If they're there because they're afraid to leave the job, that could have an effect on productivity. The ability to change jobs is a good sign in the economy."

The number of available jobs, which plummeted to under 2.2 million in July 2009 during the recession, has averaged nearly 3.8 million since the beginning of 2013, according to the federal Bureau of Labor Statistics.

State officials said Friday that Maryland employers added 4,600 jobs in May, though the unemployment rate rose slightly to 6.7 percent. The job sectors of professional and business services, and of trade, transportation and utilities added 6,600 jobs. The sectors of construction and of education and health services lost jobs.

Despite the nation's job growth, the economic recovery has been slow — and its prospects remain uncertain. On Thursday, for example, the Dow Jones industrial average plunged more than 350 points, eliminating almost two months of gains. And many job seekers have been forced to accept lower-paying jobs than they held before the recession.

Sequestration, the automatic federal spending cuts designed to reduce the deficit, as well as the expiration of the payroll tax holiday have prevented the economy from growing more quickly, said Richard P. Clinch, director of economic research for the University of Baltimore's Jacob France Institute. Additionally, the global recession and the slower growth of China's economy have reduced exports.

Until consumers become more optimistic about the economy's future, they won't be spending; businesses, in turn, won't reinvest profits until customers return, Clinch said. Even as conditions improve, job openings must grow another 10 percent to 20 percent to get back to pre-recession levels, he added.

With the expansion of the job market, more than half of the 153 organizations surveyed by consulting firm Ol Partners reported higher turnover, according to research released in May. And that involved all types of jobs, including middle managers and senior-level executives.

Employers are responding — especially to supervisors and those tagged as future leaders — by offering job coaching and increasing pay and benefits, said Patty Prosser, chair of OI Partners. Front-line employees are being given improved training and perks such as tuition reimbursement and flexible hours and schedules.

"Companies are getting aggressive with counteroffers of more money or better quality of life," said Patrice Rice, founder of Patrice & Associates, a hospitality recruiting agency near Annapolis. "A lot are starting to put together packages for employees that are more attractive. … The job seekers are using the new job offers to get a better opportunity at their current position."

Finding replacement workers, meanwhile, can be difficult.

In the restaurant industry, which traditionally has high turnover, replacing a manager can take two months, Rice said. The restaurant must advertise the job, screen candidates and conduct in-person interviews, background checks and personality tests, she said. Candidates are plentiful, but qualified ones are not, she added.

Even within the past year, employees were afraid to change jobs because of the nationwide financial instability, Rice said. "People were worried about whether a restaurant or hotel chain would be able to stay open or have to close a location."

But now confidence among workers in the hospitality industry is rising, she said. Restaurants are opening new locations, hotels are expanding, and companies are seeking managers, shift leaders, cooks and servers.

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