two figurines shaking hands

Employee Turnover Jolts Companies’ HR Departments

August 23, 2022 Talent Management
Mark Feffer
By Mark Feffer

The HR environment is becoming highly critical to company success, causing immense pressure on HR staff. These new dynamics are resulting in higher turnover among HR professionals.

Over the past three years, HR professionals have generated the highest turnover rate across all industries, according to a report by LinkedIn. Between July 2021 and June 2022 alone, global HR saw a turnover rate of almost 15%. To put that number into perspective, the overall turnover rate was 11%.

According to LinkedIn, more HR professionals are leaving their jobs because they have an inside perspective on how their companies treat employees and want to step away from a dysfunctional company culture.

“It’s a bit counterintuitive that HR professionals — the people most concerned with retention and turnover — are also the most likely to leave,” wrote the report authors, Greg Lewis and Joseph Soroñgon, who say higher demand for these professionals may have also contributed to the comparatively high turnover.

Remote Work at the Root of HR Turnover

Case in point: the turnover rates for sales and IT roles were also elevated, at 10.8% and 10.6% respectively — not as high as HR but certainly higher than many other functions, including administrative (7.8%), operations (8.8%), accounting (9.4%) and business development (9.5%).

“Since engineering, sales and IT candidates are the most sought after, that also means there are more opportunities for them to leave for greener pastures,” the report noted.

So, what's causing the turnover among HR professionals? Turns out, the move to remote work may be to blame.

Related Article: Digital Transformation and Talent Challenges Roil the HR Tech Industry

HR's Unique Challenge

According to findings from a Gusto survey, 70% of HR employees say complying with tax and employment laws has grown notably more difficult as companies hire more and more workers from other states — and 30% of them say the level of difficulty has increased “substantially." 

Gusto’s research found that a company with 25 to 49 workers is 1.5-times more likely to have workers spread across 4 to 10 states and 7.3-times more likely to have workers in 10 or more states.

“These changes increase the workload of HR practitioners due to the complexity of managing the many nuances of compliance and employment regulations for different states and workers’ schedules,” wrote Liz Wilke, Gusto’s principal economist, in the research report.

The remote/hybrid shift has also affected high priority HR efforts such as building a good culture and managing day-to-day administrative tasks.

“HR practitioners know that building culture and managing day-to day processes are among the most valuable skills they offer to their businesses,” Wilke wrote. “However, delivering on this value has become more complex as the shift toward flexible working arrangements, including remote and hybrid work, requires an increased focus from HR leaders on facilitating engagement, commitment and retention among workers.”

Related Article: Stop Attrition Before It Starts

Flexibility Tops Most-Wanted List

Gusto's research found that flexibility has become the top consideration for candidates when they’re deciding whether to accept or decline an offer. This relatively new priority now outranks pay and career development as a critical factor in the decision-making process of job applicants.

“Of workers who declined their last offer, 45% said flexibility or work-life balance was the most important factor in their decision-making,” Wilke wrote.

In addition, nearly half of workers, 48%, said the ability to work from home at least some of the time would be an important — if not the most important — factor in determining whether to accept an offer down the road.

Offering remote or hybrid work opportunities provides employers with access to a larger labor pool and, thus, more opportunity to get high-quality candidates for available positions. In other words, there’s a significant benefit for companies to optimize their talent attraction strategies by actively targeting candidates outside of their local region.

Related Article: Creating a Flexible Work Strategy That Works

The Benefits of a Flexible Work Model

This isn't news: Nearly 65% of the companies offering both remote and hybrid arrangements actively sourced candidates outside of their local area, and that proportion grew to 86% for remote-only employers, according to Wilke.

But offering flexible and non-standard working schedules also helps to increase performance and produce less turnover.

“Thirty-four percent of companies that provide remote and hybrid workplaces said the skills and experience of new hires has improved, and 27% reported that productivity of staff increased as a result,” Wilke wrote. “Companies that offer remote work are also seeing benefits in reduced employee turnover."

Seems like a win-win situation.

Tags

Featured Research

Related Stories

Help wanted sign in a window

Talent Management

National Techies Day Underlines Demand for Data-Related Job Skills

waving the checkered flag at the start of a race

Talent Management

Pay Transparency: Full Speed Ahead

monkey looking concerned holding its mouth

Talent Management

Can Employers Change Employees' Job Descriptions?

Digital Workplace Experience Q4: October 12-13, 2022

DWX22 - Q4