War, Recession Make Job Hopping Less Attractive
Saleswoman Dottie Stamzione would have quit her job long ago if she thought she had a choice.
The 24-year-old Lakewood woman has been selling computer equipment for the past few months, unable to locate work in her chosen profession, interior design, which has been hit hard by the slump in real estate.
“I think I could make more money (as an interior designer), because I would be doing what I’m good at,” Stamzione said. But, she added, “there is nothing in” interior design. So for now, she’s staying put.
Stamzione is not the only worker who has put job-hopping plans on hold.
Faced with a recession at home and war in the Gulf, the last thing most workers want to do is compound the anxiety by quitting their jobs. That sensible notion, however, has frustrated the efforts of executive headhunters and foiled the plans of a few troubled companies that expected attrition to ease the pain of layoffs.
“Job hopping stops, because the doors and windows are closed at other places,” explained Jon Goodman, director of the entrepreneur program at the USC School of Business. “Where do you expect them to be job hopping to?”
Workers have always tended to hunker down during bad economic times. Based on government statistics from 1957 through 1981, the rate of employees who quit “went down in every one of the recessions that we had in the period,” said Geoffrey Moore, director of the Center for International Business Cycle Research at Columbia University in New York.
“Whenever we get into a phase where unemployment is increasing, people tend to value their jobs a bit more,” said David Friedland, a Los Angeles industrial psychologist. “They don’t want to be out there looking for work when there are less jobs available.”
Employee attrition--as measured by workers who quit or were fired--ran only slightly lower in the first nine months of 1990 than in the same period in 1989, according to the Bureau of National Affairs, a private information services company in Washington.
But the downward trend in attrition was consistent through the period. On a monthly basis, the average employer lost one of every 100 workers, according to the statistics.
“It wouldn’t surprise me to see if (the lower rate) was due to an economic downturn,” said Michael Reidy, the bureau’s director of surveys.
Besides an eroding job market, the uncertainty of the times has made individuals uneasy about making all sorts of major decisions, from buying a house to changing jobs, industrial psychologists and human resource executives say.
“People are immobilized by the uncertainty,” said Sylvia Warren, vice president of Thorndike Deland Associates, a New York-based executive search firm. “People are just not excited about change right now.”
The reluctance of workers to change jobs is reflected in the difficulty recruiters such as Warren have had in convincing prospects to jump the company ship. “Over the last six months, it has become more difficult than ever to pry people loose,” she said.
In Pasadena, executive recruiter Gary Kaplan says an aerospace executive turned down an offer from a smaller software company that offered him a more prominent position and a 25% salary increase.
“We thought it would be a slam dunk, and it’s not,” Kaplan said. “Most astute professionals are fairly reticent to leave what they’ve got.”
Despite greater employee reluctance to leave, companies and public agencies have continued to rely on attrition to varying degrees as they join the growing list of employers announcing cutbacks. Last year, organizations ranging from TRW to the City of New York announced cutbacks dependent on voluntary departures.
Cutting jobs through attrition, however, takes longer than layoffs, and the method may backfire by leaving some departments understaffed. Meanwhile, the generous severance and early-retirement packages employers use to spur resignations may encourage their most talented employees to flee.
“They are the most likely to get other jobs,” Warren said.
However, attrition is considered less damaging to employee and community relations than is a layoff.
Employees view attrition as “a nicer situation than being told ‘you stay and you leave,’ ” said Daniel J. B. Mitchell, a labor economist and professor at the Anderson Graduate School of Management at UCLA.
At Pacific Telesis, which announced plans last year to cut 11,000 jobs by 1995, more than 3,300 workers left the firm voluntarily last year. “We actually are on target,” spokeswoman Kate Jacobs said.
But some employers have found workers highly resistant to leaving in the current economic climate.
In September, Digital Equipment Corp. in Massachusetts dangled what it considered a generous severance package before its employees in an effort to chop 6,000 workers from its ranks.
Employees of two years, for example, would receive 13 weeks of pay and a year of medical and dental benefits if they left the financially troubled computer manufacturer.
But by December, only 2,550 Digital workers had accepted the offer. As a result, the company said last month that it would slash its work force by 3,500--the first layoff in Digital’s history.
“The outside economic conditions would make continuing the voluntary program unlikely to succeed,” spokeswoman Nikki Richardson said.
After laying off 350 workers in October, Carter Hawley Hale, which owns the Broadway department store chain, said another 650 positions would be eliminated through attrition.
But by December, the firm found attrition rates at some operations were running at only half their normal levels. As a result, the firm terminated 100 workers last month. Carter Hawley filed for bankruptcy court protection Feb. 11.
“There was an increasing level of uncertainty regarding the economy as a whole, and there was more and more concern with the situation in the Middle East,” Broadway personnel chief Robert S. Wyatt said. “You add all that up, and anybody who is currently employed has got to look twice at whether they want to make a change.”
