Electronics Firms in County Are 2nd in U.S. in Turnover

Orange County electronics companies had the second-highest employee turnover rate in the nation during 1986, eclipsing every major employment region except Texas, a trade association reported Thursday.

According to data compiled by the American Electronics Assn., Orange County electronics firms had a 20.9% turnover rate last year, exceeded only by Texas’ 21.4% rate, but considerably outdistancing the national average of 16.4%.

Although Orange County’s 1986 turnover rate appears comparatively high, it represents a dramatic improvement over the 41.5% rate recorded in 1980, when the county led the nation in electronics industry turnover. The national average was 26.0% in 1980.

Orange County’s electronics industry turnover rate has ranked either first, second or third in every AEA survey since 1980. The county had the nation’s highest turnover rate in 1985, with 27.3%.

AEA spokesman Jeff Parietti said Orange County’s historically high turnover rate reflects a relatively small number of large electronics employers within the county.

“Basically, Orange County has a mix of a lot of small and medium-sized companies,” Parietti said. “Orange County doesn’t have that many large firms. The larger the firm, the lower the turnover. Large organizations tend to be more stable.”

Parietti said larger companies also have less turnover because they typically offer more security, better benefits and a less frantic work pace than smaller firms.

“People want to work for the IBMs of the world,” he said. “For one thing, the smaller, more entrepreneurial firms might go out of business. Or the small firm might operate at a more go-go sort of pace that causes people to burn out faster.”

In addition, areas with relatively large numbers of companies have higher turnover rates because they offer more employment alternatives to ambitious workers, Parietti said. Viewed from that perspective, high turnover may indicate the presence of a thriving, entrepreneurial employment environment.

“There have been a lot of new companies that have started up in Orange County in the last four or five years,” he said. “There have been a lot more opportunities for people to move from company to company. The dynamics of Orange County employment contributes to the turnover rate.”

Joel Slutzky, chairman of Odetics Inc. of Anaheim, agreed with Parietti’s observations about Orange County’s unusual mix of electronics employers.

“We really don’t have what I would call a cornerstone company in Orange County,” Slutzky said. “There is no large company in Orange County that acts as a stabilizer. We’ve typically matured along with aerospace companies in the area, which are pretty volatile employers themselves.”

Slutzky said he believes that Orange County turnover has also been increased by acquisitions of local firms by companies with headquarters in other regions.

“For some reason in our county, when a company gets to be a particular size, it tends to sell out to another company outside the area,” he said.

AEA’s national survey is based on data compiled from about 1,200 firms grouped into 16 employment regions. The Orange County figures are based on information supplied by 84 companies.

The trade group based its turnover calculations on resignations, discharges, retirements, deaths and releases related to non-performance.

The rates do not include layoffs, AEA said, because the affected employees are not expected to be replaced.

Besides Texas and Orange County, the other 14 regions and their 1986 turnover rates are metropolitan New York, 19.6%; Oregon, 19.2%; Los Angeles, 19.0%; the Southeast, 18.8%; San Diego, 16.5%; Santa Barbara, 15.8%; Northern California, 15.0%; New England, 15.0%; Florida, 14.5%; the Midwest, 14.4%;, Colorado, 13.3%; Washington, 12.2%; Minnesota, 12.0%, and Arizona, 9.5%.