Tag Archives: Job Loss

Lack of Career Advancement Leads to Turnover Despite Training


Photo: movin’ up

According to the American Society for Training & Development, U.S. organizations spent about $171.5 billion on employee learning and development in 2010. But what good does it do a company if the very workers the organization spent money on to train will quit and take their newly acquired training with them?

I came across an article in the Wall Street Journal titled, “When Training Leads to Turnover” and found it interesting. However, it’s important to note that the title is a bit misleading since training (by itself) does not lead to turnover. Rather, it’s the idea that without an opportunity to advance/move up in a company, employees (even those who have received training) are more likely to leave compared to those who have opportunities to advance in the organization. As Silverman later clarified in the WSJ article, “employee turnover can increase after training if a company fails to also provide career development and opportunities to get ahead.”

Kraimer, Seibert, Wayne, Liden, and Bravo (2011) discovered that employees who’ve been trained by their company will leave if they do not see any chance to advance. On the other hand, workers who see a career opportunity within the organization will stick around. Thus, it would have been more fitting to label the WSJ article “When Lack of Career Advancement Leads to Turnover.” But then that wouldn’t be as eye-catching. In fact, the research study the WSJ cited is titled, “Antecedents and outcomes of organizational support for development: The critical role of career opportunities.” Note the last part of the title, “The critical role of career opportunities.”

Training does not occur in a vacuum and, by itself, is not enough to retain employees, if those employees do not see career opportunities in their future.

Researchers defined two important concepts: (a) organizational support for development (OSD) as “employees’ overall perceptions that the organization provides programs and opportunities that help employees develop their functional skills and managerial capabilities” (Kraimer et al., 2011, p. 486); (b) perceived career opportunity (PCO) as “employees’ belief that jobs or positions that match their career goals and interests exist within the organization” (Kraimer et al., 2011, p. 486).

Most notably, the researchers found that development support was associated with reduced voluntary turnover when perceived career opportunity was high, but it was associated with increased turnover when perceived career opportunity was low. In other words, even when organizations provide programs and opportunities to help employees develop their skills, if employees perceive that career advancement opportunity is low, they are more likely to leave.

Practical Implications: “Organizations should seek to manage employees’ perceptions of career opportunity if they wish to retain career-oriented employees. If organizational career paths do not lead to opportunities that match those desired by employees, they may choose to look for alternative jobs in the hopes that another organization will offer more desirable job paths. Given the high costs associated with staffing and turnover, expenditures for development support may be well justified, but only when employees perceive that there are career opportunities within the organization that match their career goals and interests. When many employees do not perceive desirable career opportunities, our results suggest that development support may simply provide them with the mobility capital to leave…” (Kraimer et al., 2011, p. 496).

References

American Society for Training & Development (ASTD). 2011 State of the Industry Report.

Kraimer, M. L., Seibert, S. E., Wayne, S. J., Liden, R. C., & Bravo, J. (2011). Antecedents and outcomes of organizational support for development: The critical role of career opportunities. Journal of Applied Psychology, 96(3), 485-500. doi:10.1037/a0021452

Silverman, R. E. (2012, June 25). When training leads to turnover. The Wall Street Journal [Online]. Retrieved August 2, 2012, from http://blogs.wsj.com/atwork/2012/06/25/when-training-leads-to-turnover/

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Cognitive Dissonance When Firing Family or Friend

Photo: Conflicts

I was contacted by a career advice reporter with FINS.com, the jobs and career website of The Wall Street Journal, for my thoughts for an article about why workers struggle when they have to fire someone with whom they have a close personal relationship. While I’m glad to see my name mentioned, I feel that much of what I shared with her was left out of the article. Two things did manage to make the cut – cognitive dissonance and the mention of the Parker and McKinley (2008) article. However, without offering more details, I’m afraid that readers of that article might miss my message.

Here is what I emailed her:

We spend a great deal of time working alongside others at work. In fact, if you consider that the typical worker spends 8 hours a day at work, it means that many of us spend more face-time with our colleagues than with our own families.

A more specific explanation of why workers struggle when they have to fire someone with whom they have a close personal relationship is something called cognitive dissonance. It’s a state of tension, which we want to avoid, that occurs when we perceive an inconsistency between our beliefs, feelings, and behavior.

So, if we spend a great deal of time with someone and have developed a close relationship with that person, then it is understandable that having to turn around and fire that individual would create conflicts or tensions between what we are required to do (i.e. the act of firing someone) and our feelings (i.e., that person I must fire is a friend or someone I care about).

Parker and McKinley (2008) wrote about how employees who assist in the implementation of layoffs at their organization (i.e., they help the company lay off other employees) experience cognitive dissonance. They maintained that the longer you spend with the employee being terminated, the greater the odds of you experiencing cognitive dissonance when you need to let that employee go.

Parker and McKinley (2008) said in order to help reduce cognitive dissonance, the one terminating (the agent) might subscribe to an ideology of shareholder interest (the belief that shareholder value should be the main criterion for management decision-making). If the layoff agent is a strong believer in this ideology of shareholder interest, he or she would regard the increase of shareholder wealth as the first priority of management and thus back or defend actions that enhance shareholder wealth.

Basically, according to cognitive dissonance theory and the article by Parker and McKinley, the person who must fire a coworker can change the way he or she thinks about firing or letting someone go and rationalize that while the layoff or termination of a coworker might harm that individual employee, it would have positive consequences for the overall organization.

Reference

Parker, T., & McKinley, W. (2008). Layoff agency: A theoretical framework. Journal of Leadership & Organizational Studies, 15(1), 46-58. doi:10.1177/1548051808318001

Citation to FINS article:

Eggers, K. (2012, June 29). How to fire your dad. FINS Finance – Career Advice. Retrieved from http://www.fins.com/Finance/Articles/SBB0001424052702303649504577493183038820606/How-to-Fire-Your-Dad

A Bad Job Is Worse Than No Job

Researchers at the Australian National University wanted to know whether the benefits of having a job depended on its psychosocial quality (levels of control, demands and complexity, job insecurity, and unfair pay), and whether poor quality jobs were associated with better mental health than unemployment.

They found that poor-quality jobs — those with high demands, low control over decision making, high job insecurity and an effort-reward imbalance — had more adverse effects on mental health than joblessness (Butterworth, Leach, Strazdins, Olesen, Rodgers, & Broom, 2011).

Analyzing seven years’ worth of information from 7,155 people, the researchers concluded:

“We found that those respondents who were unemployed had significantly poorer mental health than those who were employed. However, the mental health of those who were unemployed was comparable or more often superior to those in jobs of the poorest psychosocial quality.”

Take-Away Message:

  • The mental health of people in the least-satisfying jobs declined the most over time — and the worse the job, the more it affected workers’ well-being.
  • The impact on mental health of a badly paid, poorly supported, or short term job can be as harmful as no job at all.
  • The quality of your job predicts the quality of your mental health.

References

BMJ-British Medical Journal (2011, March 14). Impact of a bad job on mental health as harmful as no job at all. ScienceDaily. Retrieved from http://www.sciencedaily.com/releases/2011/03/110314184714.htm

Butterworth, P., Leach, L.S., Strazdins, L., Olesen, S.C., Rodgers, B., & Broom, D.H. (2011). The psychosocial quality of work determines whether employment has benefits for mental health: results from a longitudinal national household panel survey. Occupational & Environmental Medicine. Advance online publication. doi:10.1136/oem.2010.059030

Time – Study: Having a Bad Job Is Worse than No Job For Mental Health. Retrieved from http://healthland.time.com/2011/03/15/study-having-a-bad-job-is-worse-than-no-job-for-mental-health/

5 Unemployed Americans Competing for 1 Available Job

According to the Economic Policy Institute, there are about 4.7 job seekers for every 1 job opening (Shierholz, July 2010). Sounds bad, right? Actually, this is an improvement from data from March 2010 (Shierholz, May 2010) in which there were 5.6 job seekers for every available position.

“With so many unemployed workers per available job, people who find themselves out of work can be expected to remain unemployed for extremely long periods. In May, nearly half (46%) of this country’s unemployed workers had been unemployed for over six months” (Shierholz, July 2010).

A Washington Post article reported that companies are sitting on a large pile of cash fearful of adding jobs. In fact, nonfinancial organizations are “sitting on $1.8 trillion in cash, roughly one-quarter more than at the beginning of the recession” (Yang, 2010).

Though it’s evident that people need jobs and companies need to hire, the question becomes how do we encourage organizations to do so?

“A survey last month of more than 1,000 chief financial officers by Duke University and CFO magazine showed that nearly 60 percent of those executives don’t expect to bring their employment back to pre-recession levels until 2012 or later — even though they’re projecting a 12 percent rise in earnings and a 9 percent boost in capital spending over the next year.

When asked why companies are holding back so much, many economists cite broader uncertainty that goes well beyond anything happening in Washington. Firms aren’t sure whether the economy can sustain a strong recovery. And as long as consumer spending remains low, there’s not much incentive for companies to ramp up” (Yang, 2010).

The Economic Policy Institute predicts that it could take one to four years for the jobs to come back (Bivens & Shierholz, 2010).

References

Bivens, J. & Shierholz, H. (2010, March). For job seekers, no recovery in sight—Why prospects for job growth and unemployment remain dim [EPI Briefing Paper #259]. Retrieved from http://www.epi.org/publications/entry/bp259/

Shierholz, H. (2010, July). Job seekers still face intolerable odds. Retrieved from http://www.epi.org/publications/entry/job_seekers_still_face_intolerable_odds

Shierholz, H. (2010, May). Unemployed workers outnumber job openings 5.6-to-one in March. Retrieved from http://www.epi.org/publications/entry/unemployed_workers_outnumber_job_openings_5.6-to-one_in_march/

Yang, J. L. (2010, July). Companies pile up cash but remain hesitant to add jobs. Retrieved from http://www.washingtonpost.com/wp-dyn/content/article/2010/07/14/AR2010071405960.html

Job Insecurity and Employee Health

The New York Times ran an article (Luo, 2010) that talked about job loss and adverse impacts on health. What’s most intriguing were the health studies mentioned in the article linking layoffs to poor health and life expectancy. The article also mentioned a 2009 study finding persistent perceived job insecurity to be a strong predictor of poor health and even more damaging than actual job loss.

Occupational Health Psychology Quiz

  1. Did you know that layoffs more than doubled the risk of heart attack and stroke among older workers compared to those who continued to work (Gallo, Teng, Falba, Kasl, Krumholz, & Bradley, 2006)?
  2. Did you know that a person who lost a job had an 83 percent greater chance of developing a stress-related health problem (e.g., diabetes, arthritis or psychiatric problems) (Strully, 2009)?
  3. Did you know that even people who lost their jobs but became reemployed still faced increased risk of developing new health conditions (Strully, 2009)?
  4. Did you know that insecurity about one’s job can also create health problems, and in some cases be even more damaging on health than actually losing a job (Burgard, Brand, & House, 2009)?

References

Burgard, S.A., Brand, J.E., & House, J.S. (2009). Perceived job insecurity and worker health in the United States. Social Science & Medicine, 69(5), 777-785. doi: 10.1016/j.socscimed.2009.06.029

Gallo, W.T., Teng, H.M., Falba, T.A., Kasl, S.V., Krumholz, H.M., Bradley, E.H. (2006). The impact of late career job loss on myocardial infarction and stroke: a 10 year follow up using the health and retirement survey. Occupational and Environmental Medicine, 63(10), 683-687. doi: 10.1136/oem.2006.026823

Luo, M. (2010, February 25). At closing plant, ordeal included heart attacks. The New York Times. Retrieved from http://www.nytimes.com/2010/02/25/us/25stress.html

Strully, K.W. (2009). Job loss and health in the U.S. labor market. Demography, 46(2), 221-246. doi: 10.1353/dem.0.0050

7 Reasons Why Employees Leave

In “The 7 Hidden Reasons Employees Leave (2005),” Leigh Branham outlined seven reasons why workers quit or leave their jobs:

  • Reason #1: The Job or Workplace Was Not as Expected
  • Reason #2: The Mismatch Between Job and Person
  • Reason #3: Too Little Coaching and Feedback
  • Reason #4: Too Few Growth and Advancement Opportunities
  • Reason #5: Feeling Devalued And Unrecognized
  • Reason #6: Stress From Overwork and Work-Life Imbalance
  • Reason #7: Loss of Trust and Confidence in Senior Leaders

Branham asserts that there are two distinct periods when an employee thinks about leaving. The first period is the time between his or her first thoughts of leaving and the subsequent decision to leave. The second period in which the employee considers leaving is the time between his/her decision to leave and actually leaving.

Branham shares three tips that leaders can do to avoid losing employees:

  1. Inspire confidence in a clear vision, a workable plan and the competence to achieve it.
  2. Back up words with actions.
  3. Place the leader’s trust and confidence in the work force.

Reference

Branham, L. (2005). The 7 Hidden Reasons Employees Leave. Broadway, NY: AMACOM.

Career Well-Being

In their upcoming book, Wellbeing: The Five Essential Elements (Available May 4, 2010), Rath and Harter (2010) offer this interesting piece of information about career and its impact on our well-being.

It’s quite astonishing that people recover faster from the death of a spouse than from prolonged unemployment.

Although career well-being is discussed, it is just one of five elements covered.

The Five Essential Elements

  • Career Wellbeing
  • Social Wellbeing
  • Financial Wellbeing
  • Physical Wellbeing
  • Community Wellbeing

This is one book I’m really looking forward to reading.

The Rising Underemployment Rate and its Emotional Impact

In a previous post called The Cost of Unemployment, I wrote about the toll, on health and well-being, that unemployment had on people.

One aspect of unemployment that rarely gets mentioned is underemployment. Gallup defines underemployment as people who are “unemployed or working part-time but wanting full-time work” (Jacobe, 2010, para. 3). According to the latest Gallup poll, the underemployment rate is at a staggering 20% as of March 15, 2010, compared to the 9.7% unemployment rate reported by the U.S. Bureau of Labor Statistics.

Underemployed Americans are 2x more likely to have been told that they suffer from depression (21% vs. 12% employed Americans)(Marlar, 2010, para. 5).

These findings, both the rate of underemployment and the well-being index score, “underscore why Americans say the most important problem facing the nation today is jobs and unemployment” (Jacobe, 2010, para. 2).

Interestingly, the Gallup data indicates that a decline in the U.S. unemployment rate might be attributed to an increase in the unemployed taking on part-time work and adding to the underemployment rate.

“It is also often suggested that a growth in part-time jobs may indicate future growth in full-time work — that companies hire part-time workers before committing to hiring new full-time employees. While this is sometimes the case, it may not be so at this point in the U.S. economy: Gallup data show that one in three part-time employees who are wanting full-time work are currently “hopeful” about finding a full-time job in the next 30 days — not much of an endorsement of the idea that today’s new part-time work will progress to full-time jobs” (Jacobe, 2010, para. 8).

References

Jacobe, D. (2010, March 19). Underemployment hits 20% in mid-March. Gallup. Retrieved from http://www.gallup.com/poll/126821/Underemployment-Hits-20-Mid-March.aspx

Marlar, J. (2010, March 9). The emotional cost of underemployment. Gallup. Retrieved from http://www.gallup.com/poll/126518/Emotional-Cost-Underemployment.aspx

U.S. Bureau of Labor Statistics, http://www.bls.gov

The Cost of Unemployment

In an earlier post, I talked about job loss and its impact on an employee’s health.

When people are employed, common stressors at work include physical/task stressors (e.g. heat, noise, pace of work, workload, and number of hours worked) and psychosocial stressors (e.g. role ambiguity, interpersonal conflict, and lack of control) (Landy & Conte, 2007). Workplace stress takes an incredible toll resulting in physical/medical (e.g. heart disease, stroke, high blood pressure), psychological (e.g. burnout, anxiety, family problems), and behavioral (e.g. absenteeism, substance abuse, accidents, violence) (Landy & Conte, 2007, citing Quick, Quick, Nelson & Hurrell) and research has shown a connection between job stress and depression (Dragano, He, Moebus, Jockel, Erbel, & Siegrist, 2008).

Unfortunately, when an individual becomes unemployed, he/she may still experience many of the same symptoms of stress (as when employed) such as poor psychological health, depression, insomnia, irritability, and general anxiety (Landy & Conte, 2007, citing Warr).

Recently, the New York Times wrote an article about the emotional and financial toll of being unemployed (Luo & Thee-Brenan, 2009). The NY Times polled 708 unemployed adults between Dec. 5 to Dec. 10, 2009. Here is what they found about unemployed Americans:

EMOTIONALLY

  • 69% are more stressed.
  • 55% have had trouble sleeping.
  • 48% have experienced emotional or mental health issues (e.g., anxiety or depression).
  • 46% have felt ashamed or embarrassed about being unemployed.

FINANCIALLY

  • 53% have borrowed money from family members or friends since losing their jobs.
  • 54% have reduced visits to doctor or medical treatments.
  • 47% is without health care coverage.

In this difficult time, I encourage each one of us to take care of ourselves and one another. Do what you can, where you’re at right now to reach out and help someone else – emotionally and/or financially. Remember, it’s not the amount of the gift, but the heart in which it is given.

“How far you go in life depends on you being tender with the young, compassionate with the aged, sympathetic with the striving and tolerant of the weak and the strong. Because someday in life you will have been all of these.” -George Washington Carver

References

Dragano, N., He, Y., Moebus, S., Jockel, K., Erbel, R., & Siegrist, J. (2008). Two models of job stress and depressive symptoms: Results from a population-based study. Social Psychiatry and Psychiatric Epidemiology, 43,72–78.

Landy, F. J. & Conte, J. M. (2007). Work in the 21st Century: An Introduction to Industrial and Organizational Psychology (2nd ed.). Malden, MA: Blackwell Publishing.

Luo, M. & Thee-Brenan, M. (2009). Poll reveals trauma of joblessness in U.S. The New York Times. Retrieved December 15, 2009 from http://www.nytimes.com/2009/12/15/us/15poll.html

Job Loss

There are two basic types of job loss. There’s the voluntary departure where the employee leaves or quits and there’s the involuntary separation whereby the employee is still committed to the job.

Landy & Conte (2007) state that because a worker may continue to have “strong affective, continuance, or normative foundation” for staying with the organization, a job loss can be devastating.

The effects of job loss include (Landy & Conte, 2007, citing Warr):

  • Poor psychological health
  • Depression, insomnia, irritability, lack of confidence, inability to concentrate, and general anxiety

The reasons for these effects on one’s psyche are

  1. loss of job reduces income and daily variety
  2. loss of job suspends the typical goal setting guiding day-to-day activities
  3. loss of job results in fewer decisions to be made because there’s little to decide about
  4. decisions that are made tend to be trivial (when to get up, when to look for work, etc.)
  5. because of loss of job, new skills are not developed and current skills begin to atrophy
  6. as a result of loss of job, social relations are changed

Reference

Landy, F.J. & Conte, J.M. (2007). Work in the 21st century: An introduction to industrial-organizational psychology (2nd ed.). Malden, MA: Blackwell Publishing.