Companies Could See Exodus of Talent
As the economic recovery slowly gains momentum, employers may find it increasingly difficult to retain their best talent. Turnover may be particularly high among employees who “settled” for their current position during the downturn. The latest data from the Bureau of Labor Statistics show that 50 percent of private-sector separations in September were voluntary departures (i.e., quits). In contrast, quits accounted for 41 percent of separations in September 2009. In a Wall Street Journal article this week, one Illinois-based recruiter stated that one in five job seekers who contact him now are people who have been with their current employer for a year or less and are seeking positions at their pre-recession salary level. What can companies do to hold on to “overqualified” employees? As an “overqualified” employee, is there any benefit to sticking it out with your current employer? Is this type of turnover necessary in order to ignite increased hiring?
Will Corporate Cash Lead to Job Creation or Job Cuts?
Due largely to massive cost-cutting initiatives, including large-scale layoffs, the country’s corporations have amassed large amounts of cash. As of September, the Federal Reserve put the sum of corporate cash at a near-record-level $1.84 trillion. The big questions are when will companies start spending their stockpile and what will they spend it on? The nation’s unemployed are hoping they spend it on expansion and job creation. But, we may have received the real answer earlier this week, when heavy equipment manufacturer Caterpillar announced a record-breaking $7.6 billion acquisition of Wisconsin-based mining equipment manufacturer Bucyrus International. Overall, mergers and acquisitions are up sharply in 2010. Unfortunately, these deals often lead to job cuts; not job creation. So far this year, job cuts related to mergers and acquisitions total 36,865. That is actually down from 2009 (62,863 through October), but many of the deals announced this year have not been finalized. It could take months for the Caterpillar-Bucyrus deal to close and several more months to determine if job cuts will be necessary. Could we see a surge in M&A-related job cuts in 2011? Why are layoffs typically part of merger and acquisition transactions? Is there anything employees can do to protect their jobs following a merger?