Times have changed in the working world. Corporate loyalty is a thing of the past. Employees are more mobile, sometimes switching jobs as frequently as every few months, and prospective employers no longer automatically dismiss resumes fraught with job hopping. And nowhere is this truer than in the technology sector.
According to a survey published in February by Development Dimensions International, Inc., a human resources consulting firm based in Pennsylvania, almost one-third of all employees surveyed expect to leave for another job within the next year. About 20% of those employees estimate their likelihood of leaving to be greater than 50%. Voluntary turnover rates run almost twice as high for non-management positions, such as frontline and professional workers, than for managers. Not surprisingly, the information systems/technology field rates as one of the two most problematic turnover areas. (Sales is the other.)
How did job hopping, once frowned upon, become so prevalent and gain acceptability? Why do employees switch jobs and how are employers responding? What are the implications for graduates searching for new or first-time positions?
The Increase in Job Hopping
As the saying goes, this is not your father's Oldsmobile. Twenty-five years at IBM just doesn't happen anymore. Today's employees have been known to chalk up as many as six different employers within a year.
The past five or so years saw a staggering increase in the rate of job hopping. It's probably no coincidence that online job boards came into popularity during that time. When I began recruiting in this field five years ago, Monster, Headhunter and HotJobs were just popping up, observes Stacey Kraft, firm development manager at Hubbard One, an integrated solutions provider with offices in Chicago and New York.
"The online job boards initially made looking for a job and listing jobs much easier. The boards also led to a proliferation of independent headhunters, constantly on the hunt for prospects. Some of these recruiters were so relentless in their pursuit that they showed no qualms about contacting previously placed candidates within months, hoping to place them with yet another company.
While the job hopping phenomenon continues, some of the reasons for switching jobs have changed. Just a few years ago, employees were encouraged to frequently switch positions by the tight technology labor market, the rapid pace of technological developments and the availability of potentially lucrative stock options at many startups. These days, employees, as well as recent graduates, are looking for stability. Grads coming out in '99 had a lot of opportunities, particularly with small dotcoms, notes Kraft. Now, many grads are looking toward large, stable companies. We're finding that candidates are more interested in stability than salary and stock options.
Michael Forrest agrees. Forrest is president of JobOptions.com, a leading e-cruitment solutions provider. He has also served as the founding CEO of CareerPath.com, and executive director and CEO of the National Association of Colleges and Employers, a publisher of career-related information for college students and alumni. Forrest says, Today, one reason employees switch jobs is certainly security. With the layoffs and media shouting about the economy, people are looking for companies with solid growth and long-term expectations. Money isn't as much of a driver as it was just a year ago, but development, including mentoring, career-pathing, and the types of technology employees will get to work on, is huge.
As Forrest notes, in the early 1990s, employers were more skeptical of resumes that demonstrated a tendency to job-hop. The impression was that the candidate was not focused or dedicated. Kraft says that job hopping candidates can now appear aggressive and driven, particularly dotcom survivors. I find them to be more aggressive, direct and forthright, because they've had to be. They take more ownership and may be more cautious. A willingness to job hop can also indicate good judgment, [since] they recognized an opportunity wasn't working.
Of course, companies lose more than just a body when employees job hop. Estimates of the overall financial cost to an employer to lose and replace an employee range from 29% to 150% of the employee's annual salary. Perhaps for this reason, employers who have become reconciled to the situation closely scrutinize candidates' reasons for leaving, according to Forrest, who predicts that reference checking will increase. Hubbard One, for example, has invested significant time and resources to refine its search process and more carefully define the skill-sets the company requires. Kraft, echoing Forrest, reports that Hubbard One scrutinizes candidates' backgrounds more closely than in the past.
Steven Rothberg, president and founder of CollegeRecruiter.com, a job board targeted to students and recent graduates, says that many employers are now wary of candidates who answer ads (although less so with recent grads). Employers are placing a premium on passive job-seekers who are not actively looking for a new job. Ideally, they'd like to lure away people who are happy working for their competitors. There's a perception, perhaps accurate, that a past job hopper will leave in six months. To reach these passive job seekers, Rothberg says employers are increasingly turning to headhunters. The problem with such a move, cautions Kraft, is that many of these headhunters are solely salespeople, who don't know or understand the fields in which they are placing people.
Forrest recommends an alternative approach. More and more, he observes, employers are trying to build a community of resources in the environment for locating employees. They work with universities and keep in touch with applicants who don't fit current needs. Indeed, Hubbard One maintains regular contact with such applicants. The firm also relies heavily on referrals from employees and other Friends of Hubbard, such as clients and professional contacts.
What about after an employee is hired? Employers are well aware of the likelihood that a new employee will soon move on. Rothberg has found that some employers are less likely to offer training because it feels like they're subsidizing their competitors. But training is a great recruiting and retention tool. The good employers know that, and the others will soon catch on. Forrest adds, At the end of the day, the winners are the companies that increase training.
Regular performance reviews can also play an important role. Rothberg and Forrest both encourage reviews at least twice a year. A valuable review, says Rothberg, involves an open, non-threatening dialogue between employee and manager about the quality of work, what both sides are happy and unhappy with, and future prospects. Hubbard One conducts in-depth, semi-annual performance evaluations that include peer input and career planning. From the very beginning, Kraft says, our philosophy has been to operate as a meritocracy, as opposed to adhering to traditional seniority-based compensation schemes.
Implications for Job Seekers
As Forrest observes, The days of coming home from a career fair to find an email with an offer waiting for you are over. Similarly, Kraft notes that although it was an employees' market a year ago, employers are more skeptical and selective today. As a result, job seekers can expect a more involved and time-consuming hiring process.
Employees should also devote more time on their side of the search. Rothberg advises candidates to pay greater attention to the kind of organization they are interviewing with, as well as the specific department within that organization, as opposed to concentrating solely on geography and salary. Candidates should examine the company culture and the opportunity for growth to ensure the best fit.
As for skills and traits for success, Forrest, Kraft and Rothberg all emphasize adaptability and teamwork. Kraft looks for adaptability first and foremost. We need quick learners because things change so fast. Job hunters today also need to be comfortable with some ambiguity because a lot of companies are restructuring or refining themselves at least twice a year. And, of course, they need to be team players.
Rothberg stresses the importance of interpersonal skills. Grads tend to think they know everything coming out of school, but don't grasp that while technical skills are very important, interpersonal skills are just as important. The technical skills of today's grads are generally superb, but many come out as lone rangers. In most organizations, employees have to work collaboratively. In addition to facilitating current work situations, interpersonal skills can be key when looking to make a move. Technical jobs are very project-driven, so employees may need to move a lot, says Rothberg. Personal contacts can be more important than impressive credentials in landing that next gig.
Forrest thinks graduates should consider shifting their efforts toward seemingly less sexy fields. Young people like jobs that look good to their friends, but some of the more exciting jobs are in industries they wouldn't even consider, like health care. These industries can offer employees, early in their careers, greater responsibility and opportunities to learn. They can enjoy closer relationships with management and users, rather than being stuck in a cubicle. Forrest recommends contract or temporary work as a good way for students to test the waters. It's a great opportunity to find out what you really want to do so you don't get that great job you always wanted, only to find out-three months later-that you hate it.
Should such a situation arise, though, Rothberg urges employees to first consider hopping internally. He believes too much emphasis is placed on moving employer to employer. Switch managers, not employers, he urges. It can be a lot easier. If a move is motivated by a desire for more money, he suggests that an employee demonstrate the value you're bringing the company and use third-party hard statistics that show compensation for equivalent positions.
Patience is also important. Recent graduates must realize that they won't be running the company right away (or ever, if they lack interpersonal skills). Conflicts often arise between employers and employees in technology fields after employees have, in their minds, mastered a new skill or process. The employee, fresh out of an educational environment, is eager to move on and conquer something new; the employer wants the employee to apply the new skill for a while. It's a real conundrum, notes Forrest.
The heady days of the dotcom revolution have passed, leaving a battered but still breathing job market in the tech sector. The dramatic decline in the sector, explains Kraft, has leveled expectations on everything from salary to how fast a career path will move. But, according to Rothberg, the outlook for grads, both short-term and long-term, is positive. The pendulum swung too far to employees [in recent years], and stories about six-figure salaries for positions that had earned $30,000 a couple years earlier scared employers off, but they're coming back to campus. Although the tech sector has softened, he predicts that it will grow as the economy shifts to a service focus. Anticipating a dearth of managers over the next decade, Forrest sees plenty of opportunities for employees who have gained some management experience.
No one, however, foresees a decline in job hopping.
As telecommuting increases and more workers opt to become independent contractors and free-lancers, at least as much, if not more, job hopping can be expected. Forrest reiterates that development will be important. They might not like it, but soon-to-be-graduating students will be well advised to plan on continuing their training and education throughout their careers.