Workers across many industries are expressing frustration with their current roles due to a cooling white-collar labor market and declining turnover, which has led to fewer internal job movements, a new report by the Wall Street Journal shows. This growing sense of dissatisfaction has prompted companies to adopt new strategies to facilitate employee mobility and skill development.
For example, consulting firm McKinsey has increased its mobility budget, allowing employees to work on projects in different cities for short periods. Similarly, Synchrony Financial is permitting employees to apply for temporary roles on different teams, while Exact Sciences is expanding roles to offer fresh challenges.
Voluntary turnover within companies has decreased from 17% in 2022 to 12% so far this year, according to Aon, a professional-services company that surveys employers on pay and attrition trends. Additionally, the rate of "regrettable turnover"—employees that companies prefer to keep but who choose to leave—has also declined.
This trend is occurring amidst a rising U.S. unemployment rate, which reached 4.1% in June, and a slight easing of wage gains. Promotions into management roles have declined across nearly all age groups, according to data from ADP.
Companies are seeking ways to provide growth opportunities for employees without necessarily offering significant pay raises or title changes. Many CEOs, focused on efficiency, are hesitant to create new roles or additional layers of middle management. Instead, they are emphasizing training and encouraging managers to offer more coaching during one-on-one meetings to help employees progress.
At Synchrony Financial, with approximately 20,000 employees, the company has experimented with job swaps across various departments, including technology, credit, and finance. Employees can switch roles with colleagues for periods ranging from 90 days to over a year.
McKinsey's global managing partner, Bob Sternfels, explained that increasing the mobility budget helps employees gain new experiences and develop a global perspective. This approach aims to sharpen their skills and broaden their understanding of the world.
Veteran human-resources executives caution against ignoring employees' ambitions, even in a favorable job market for employers. Bob Toohey, chief human resources officer at Allstate, emphasized the importance of recognizing and addressing employees' career aspirations to prevent them from leaving when the market improves.
In response to slowed hiring, Allstate has focused on internal recruiting, with recruiters conducting informal conversations with employees about their career goals. This initiative has shown employees that the company is invested in their professional development, resulting in a higher internal fill rate for open roles.
Toohey emphasized the need for employees to consider lateral and upward career movements, focusing on overall progression rather than just vertical advancement.
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