why job hopping will always exist and how to overcome it

Job hopping is a reality that will always exist in the workforce. Though it can be difficult to manage, there are ways to minimize the negative effects and make the most of this trend. By understanding why job hopping happens, you can put better systems in place to retain employees and keep your company running smoothly. 

COVID didn't start the job hopping epidemic

The Stats

The Great Resignation. COVID just put gas on the existing fire of job hopping and resigning without a new job in place. From 2009 to 2020, there were twelve (12) years of continued growth in USA employee turnover. In 2009, 1.25% of workers across America, while in 2019, an astonishing 2.5% left their jobs. While 2020 was a bounce back year (2.25%), in 2021, 47 million Americans (3.25%)left their jobs. Link 

The Three Types of employees

But Why? So if you know that it started before COVID, why did COVID a time of health and financial uncertainty lead to continued growth of people quitting “paying” jobs? Well TIP has labeled job hoppers and job quitters in one of three major categories:

The Worker. 

Most people just want to work eight (8) hours a day and go home to their family. A large portion of “Workers” are hesitant to change and reluctant to take on new skills and roles. Workers are those that do not budge when it comes to their job description, they are likely to show hesitation or resistance to learning new skills, and will quit when pushed to take on another person’s job at the same pay rate, an unethical and illogical business practice known as “horizontal loading.” However, in 2020 an astonishing 2.305 million people were laid off due to a whole host of reasons, but one of the reasons directly stems from this “Worker” mentality. Link

The Dreamer. 

When you see death around you, you realize a job’s only purpose is to pay for bills. Many people had personal and spiritual revivals. They felt a job is just a job, I’d rather get paid less and enjoy my life more, or they thought this is a time for them to downsize their life and pursue a lifelong dream since 50% of the country was locked away in their homes and open to their social media ads and posts. This is why people are starting side hustles and investments, that many times lead them to less productivity as they begin to make more money on the side they look to do that side hustle as a primary source of income. If the side hustle works well, they may even find a part-time position instead of full time position to source their monthly bills instead of slaving away for 40 hours per week, 2080 hours per year, until they are 100% dedicated to their new venture. In 2020, there was a 42% annual increase in new business formation alone! Link

The Overachiever. 

When you don’t get a big salary raise, promotion, or your company has to “slow things down” due to a worldwide pandemic, Overachievers feel they are on a sinking ship. They start looking for companies that will indeed ride the COVID pandemic out or even those that will grow during it. So you saw a lot of people making lateral transfers to competitors and similar markets. 

more people are looking at side hustles

Loyalty is Largely Dead. Employees lack ownership stakes in the company due to limited knowledge in areas like marketing, sales, finance, and operations. Owners expect loyalty but fail to provide necessary training, creating an unfair dynamic. This theory has proven itself time and time again from the janitor to the CEO. Q1 2022 saw a 56% increase in CEO departures compared to 2021, as CEOs struggle with a diminishing workforce. (Link)

In 2024, 22% of all employees in America have a side hustle.

With the excitement and opportunity revolving around online businesses, its not just about leaving your company for another, it could be to simply launch an online business or side hustle that begins to dominate their time and focus. One way businesses are starting to bypass this as a possibility is to give their employees a business phone to which only their immediate family has the number too. Employees can access their personal phones only during breaks and lunches. Sounds severe but it also limits the breach of confidential information too.

Tactics to increase employee retention and engagement

5-Star Review Bonuses

Many home service companies have opted in for a personal goal or company goal tied to teams for 5, 10, 15 or more 5-star reviews per month. If the goal is achieved they pay out the full bonus. You can elect to structure this anyway you wish and is a great way to enforce quality of service and help you both retain them and gain more Google Map rankings faster with those added reviews.

Personal Referrals

Consider allowing your employees to post about the company on their personal facebook page to generate new home service projects, auto repair estimates, anything that includes their personal network. When the referral comes, a deal is made, pay them a flat or % of the invoice. Again, how you pay them is up to you. You can turn your implementers, installers, and support members, into part of the sales team.

Horizontal Job Loading instead of Overtime Pay

If you employ someone who asks for more pay, why not delegate something to them that is important, but lacks intense training. If you have a fleet of vehicles; why not let them inspect the vehicles and clean them. Over time they could actually take on the repair invoicing and contracting as they build their skills. This small but important task could take the task off your shoulders, give them a little more pay, and help build them into future managerial positions with the new knowledge they obtain.

employee retention models

educating employees on true employee costs

Anyone who’s never owned a company or conducted payroll, has no idea of the cost of a single employee. They were never taught nor do they know that they have a 20% to 40% additional cost when you add in benefits, rent, utilities, devices, hardware, software, and liability insurance. 

The wrong way to approach a pay raise request

Employee: Hi Tom, I really want to (stay/join) your company but I need to make $65,000 minimum.

Employer: Great, I agree that you should make $65,000 a year, but 20% of that payout goes to your health benefits, PTO where we lose access to someone doing the job which means we lose money, Vacation time which is the same result, plus we have operating costs for your emails and technologies. The company covers those costs for you, so I can offer your $52,000 base plus all those benefits. Sound Good?

Employee: Thanks but I need $65,000 to start, those are your operating costs to afford someone with my skills. This is what I need. 

Employer: But if I pay you $65,000 base, I’m paying a minimum 20% higher by covering all your benefits, so really I’m paying $78,000 per year. The position you fill is total out the door at $65,000.

Employee: Tom, I just can’t do it, I’m gonna have to find something that pays me my worth. 

How to Address a Pay Raise Request

Employee: Hi Tom, I really want to (stay/join) your company but I need to make $65,000 minimum.

Employer: Great, let's talk about how we get you there. Right now your position is ___________ and that's the rate. But if we could find a way for you to help grow the company in a new way, we could make that work.

Employee: Thanks but I need $65,000 to start, those are your operating costs to afford someone with my skills. This is what I need. 

Employer: But if I pay you $65,000 base, I’m paying a minimum 20% higher by covering all your benefits, so really I’m paying $78,000 per year. The position you fill is total out the door at $65,000. But what if we looked at some of the hours you work and see if we could replace a few tasks with some more important tasks, not more tasks, but different tasks that me and the managers would no longer have to do. Then we'll look at the other guys and see if they can take on that task that you no longer do. This would benefit all of us.

Employee: I'm open to that, as long as you're not giving me more tasks because I'm already working every minute I can every day.

Employer: Agreed. If we can make this work, you can get the bump in pay, and we all win. I can't promise it will work, but I'm glad you're open to it. Let's circle back in 3 days with some tasks we and the managers suggest, and you tell us which ones you think you're perfect for. During that time write down 3-5 tasks you do a day that could be easily done by others. Even write down the people you think are great for it.

recruitment agencies cost a lot but are an option

Recruitment Stats you need to know

• US recruitment agencies cost 15-25% of the annual salary.
  
• If you handle all recruitment in house expect to pay $48,000 - $67,000 per recruiter!
  
• USA turnover rates and absenteeism are not helping either
• Electricians are increasing workers compensation claims and absenteeism
• 42% of plumbers are considering moving to your competitors
• National reports state 57% shortage of skilled labor positions
• Overall "skilled trades" are leaving their positions 2.5 times greater than prior to COVID.

History of Recruitment and what it will cost

Recruitment agencies in the US can be pricey. They offer services such as finding, screening, and matching candidates for jobs. But fees vary widely based on the type of service and the agency's expertise. Employers often turn to recruitment agencies to streamline their hiring processes. These firms have access to a wide range of job seekers and can identify potential hires quickly. Unfortunately, employers have to pay a fee based on the hired candidate's salary. This fee may be 15-30% or more for specialized roles. Job seekers may also pay costs when using recruitment agencies. They may be charged for resume writing, interview coaching, and career counseling. These services can be helpful but costly.

Overview of US Recruitment Agencies

To gain an understanding of US recruitment agencies and their importance in the job market, delve into an overview. Discover what these agencies do and why their role is crucial. Explore the explanation of the sub-sections: what recruitment agencies do, and the significance they hold in the job market. They make the hiring process easier, saving time and energy for both parties. Plus, they have a wide network and access to many job openings. They are also experts in matching candidates to suitable roles, based on qualifications and preferences.

Moreover, they guide candidates throughout the process. From resume-building to interview preparation, they help them present their best selves. Plus, they give feedback from employers, aiding them in future interviews.

Take Mark, for instance. He was an accomplished engineer, but he couldn't find a job. Feeling discouraged, he contacted a recruitment agency. They noticed his potential and connected him with the right company. Thanks to their services, Mark got the job of his dreams. This proves that recruitment agencies can make a difference in people's careers by connecting them to the right opportunities.

Benefits of US Based Recruitment Agencies

US recruitment agencies can provide value-added services. These may include background checks, reference checks and skill assessments. This saves time and money for businesses. They also have expertise in negotiating salaries and benefits packages. This ensures companies get good value for their money when hiring.

For example, a tech start-up was struggling to hire software engineers within budget. They chose to work with a US recruitment agency. They received top-notch candidates and the agency negotiated favorable salary packages. The start-up was able to hire talented engineers at affordable rates. This saved them considerable expenses in the long run.

Gaining access to a broader talent pool is a major pro of using US recruitment agencies. They have the tools and connections that enable employers to connect to a wide range of capable applicants, making it easier to find the right fit for job openings.

Here are some of the advantages of tapping into this broader talent pool:

• Extensive reach: US recruitment agencies have a broad scope, allowing them to explore talent pools in different areas. This means that employers can easily access candidates from many cities, states, and countries, giving them more options and boosting the chance of finding the perfect candidate.
• Diverse skills: The larger talent pool from US recruitment agencies also provides a range of diverse skills. Employers can find individuals with expertise in different industries, professions, and specializations, which adds value to companies as it encourages innovation and provides a great mix of ideas and perspectives.
• Reaching passive candidates: Not all proficient people seek job postings on job boards or on company websites. Lots of top-performing professionals are already employed, yet may be open to new opportunities when presented with the right offer. US recruitment agencies usually have contacts to these passive applicants, allowing employers to reach out and connect with potential hires who may not be visible through standard methods.
• Screening and choice skills: Recruitment agencies specialize in sourcing and screening applicants as per specific criteria given by employers. They use their knowledge and experience to detect suitable applicants, saving hiring managers time and effort in the selection process. By utilizing their knowledge of industry trends and skills needs, these agencies make sure that only qualified applicants are presented for review.

Unless a person is a partial owner in the business, you as a business owner can only expect them to show up to work and do exactly what their job entails. To increase retention rates you need to look at performance bonuses that are tied to metrics that these employees can help control and improve. Don't hire big firms, support local hiring agencies. Consider outsourcing and AI automation or online courses whenever possible. By building the company culture that ties in the value of each person, many times the person would rather go to work, do their job with their friends, than a simple $1-$2 per hour increase out of nowhere. Good luck!

takeaways on job hopping and how to overcome it

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