Americans are quitting their jobs at staggering rates, making it an exciting time to shop around for a new gig while recruiters do everything they can to court new workers.
But as companies push hiring efforts into overdrive, management researchers say they’re neglecting the real stars of the workforce: enthusiastic stayers.
These are employees who are currently happy in their jobs and want to stay with the company, despite changes to their role during the pandemic or taking on added stress during times of high turnover.
Enthusiastic stayers are more engaged, productive and help businesses make more money, according to research published in the Journal of Managerial Issues. They also make up more than one-third of the workforce.
The more organizations focus on bringing in new workers rather than recognizing and promoting people who stay, the more turnover they’ll see down the road, Georgetown management professor Brooks Holtom and author on the study tells CNBC Make It — “unless the organization does something to counteract that.”
When companies face labor shortages, they’re more likely to relax their hiring standards, Holtom says. At the same time, throwing out monetary perks like flashy hiring bonuses, retirement benefits, tuition assistance and even higher wages can attract workers quickly.
Once workers are in the door, however, if they’re not motivated by the purpose of the business or don’t see a future for themselves at a company, they’re not likely to stick around.
Workers may be attracted to temporary benefits like a hiring bonus, for example, but “if that’s the only thing bringing people into an organization, it’s unlikely to be an enduring factor in retaining them,” Holtom says. These factors are also easy for competitors to match, so workers could be lured away by similar benefits somewhere else if the tight job market keeps up.
Some of these behaviors could prolong the Great Resignation for months, if not years, to come.
Instead, Holtom says the key for reversing the turnover trend is “building an organization based on people who fit with the vision of the job and culture, which increases the probability they’ll be enthusiastic stayers.”
Researchers say enthusiastic stayers have a strong feeling of job embeddedness, or a connection to the social fabric of the organization. The work of retaining, and even creating, enthusiastic stayers requires improving company culture in three ways: measuring employee fit, fostering relationships with coworkers and offering intangible benefits that can’t be found elsewhere.
A big mistake many companies make is measuring how well a worker fits in at work when they’re new, but not so much over time. Managers can do a better job of assessing whether employees continue to see a future for themselves at the organization, especially during as dynamic of a time as the pandemic and Great Resignation. If workers don’t see a future for themselves, employers can help workers shape their job and chart a career path through training opportunities, paths to promotion, mentorship and sponsorship.
Second, businesses can make sure they’re promoting coworker relationships through formal means, like clear communication between managers and their reports, as well as informal peer networks, like employee resource groups.
Finally, while businesses are trying to fill vacancies quickly through flashy perks and bonuses, Holtom says it’s really the intangible benefits of a job and work environment that make it hard for employees to leave.
That means building a company that gives workers clear sense of purpose, opportunities to grow, fair wages and flexibility. “The degree your employer affords you flexibility to meet your other life goals or interests, that has value that competitors can’t easily match,” Holtom says.
Of course, improvements to a company’s culture benefits everyone: People who stay reluctantly can become more engaged in their work, and even people planning to leave may begin to see a path for themselves at the organization. And a happier workforce can be a powerful way to attract job candidates, more so than temporary perks, Holtom says.
European Central Bank heads into pivotal meeting with omicron infections rising
Christine Lagarde, president of the ECB, speaks at the Bank’s press conference in Frankfurt, Germany.
Boris Roessler | picture alliance | Getty Images
With inflation surging and the omicron Covid variant expected to spread through the region, the European Central Bank has the unenviable task of presenting its policy outlook for 2022 on Thursday.
The rise in the cost of living for the euro area (the 19 nations that share the euro) reached a record high of 4.9% in November, while omicron looks likely to become the dominant coronavirus strain with some European economies already locked down due to the delta variant.
“The sharp rise in infections and inflation and the emergence of the new Omicron variant has complicated the picture to an extent that the Governing Council may need more time to decide on all the details of adjusting its non-conventional policy tool,” said Dirk Schumacher, an ECB watcher with Natixis, in a recent research note.
The institution led by Christine Lagarde developed a new bond-buying program in the wake of the coronavirus in March 2020 to support the euro zone. The PEPP is due to end in March 2022 with a potential total envelope of 1.85 trillion euros ($2.19 trillion).
The ECB has also kept its asset purchase program, known as APP, amid the pandemic which has a current monthly pace of 20 billion euros. The central bank has been using this program in combination with PEPP to sustain the 19-member economy.
Schumacher added that Natixis still expects an announcement that the PEPP program will end by March and “we expect a clear signal that the APP will be used in a more flexible way.”
A big focus of this week’s meeting will be the new staff projections for inflation and growth. They show whether the inflation target of 2% will be met over the medium term, which is ultimately ECB’s primary mandate.
“I see an inflation profile which looks like a hump. So it has clearly increased over the last three quarters and we know how painful it is,” Lagarde said at a Reuters conference on Dec. 3,
“And a hump eventually declines and this is what we project for 2022,” she added.
Another key question is how the ECB will bridge the end of the PEPP program at the end of March into a more flexible and potentially larger APP without provoking major market volatility and keeping financial conditions on “favourable” terms. The ECB is expected to stress the need for flexibility.
“Flexibility, in our view, means varying purchases depending on the inflation outlook and financing conditions, i.e. preserving the principle of ‘favourable financing conditions’ that characterises the PEPP,” Spyros Andreopoulos, a senior European economist at BNP Paribas, said in a note.
“This view has been supported by recent ECB rhetoric that has emphasised the need to maintain flexibility, as opposed to pre-committing to a fixed volume of purchases.”
UK inflation hits 10-year high ahead of key Bank of England meeting
Shoppers wearing protective face masks walk through the rain on Oxford Street in London on June 18, 2020, as some non-essential retailers reopen from their coronavirus shutdown.
Tolga Akmen/AFP/Getty Images
LONDON — U.K. inflation climbed to a 10-year high in November as consumer prices continued to soar ahead of the Bank of England‘s crunch monetary policy meeting on Thursday.
The Consumer Price Index rose by 5.1% in the 12 months to November, up from 4.2% in October, which was itself the steepest incline for a decade and more than double the central bank’s target.
Economists polled by Reuters had expected a reading of 4.7% for November, and the Bank of England had projected that inflation would hit 5% in the spring of 2022 before moderating towards its 2% target in late 2023.
On a monthly basis, U.K. inflation rose 0.7% in November from October, above a Reuters poll for a 0.4% increase.
Core CPI, which excludes volatile energy, food, alcohol and tobacco prices, rose by 4% year-on-year against a Reuters forecast of 3.7%, and 0.5% month-on-month versus a 0.3% projection.
The Bank of England’s Monetary Policy Committee meets Thursday to decide whether to tighten monetary policy, with inflation surging and the labor market remaining robust, but the rapid spread of the omicron Covid-19 variant has cast fresh uncertainty over the economic recovery in the short term.
The MPC defied market expectations in November by voting 7-2 to hold interest rates at their historic low of 0.1%, but analysts are split on whether it will pull the trigger on rate hikes on Thursday in light of the emergence of omicron.
“Unfortunately for consumers, peak inflation may still be a few months off. Today’s CPI data only serves to increase the pressure on the Bank of England to raise interest rates at its MPC meeting tomorrow,” said Richard Carter, head of fixed interest research at Quilter Cheviot.
“However, the Bank of England may well decide that discretion is the better part of valour and instead opt to wait until next year given the current uncertainty surrounding the impact of the Omicron variant on the economy, coupled with the risk that further restrictions may need to be introduced before long.”
Most Chinese companies could delist from US, says TCW Group
Budrul Chukrut | LightRocket | Getty Images
Chinese companies listed on Wall Street will likely to be cut off from U.S. capital markets in the next three years as tensions between Beijing and Washington persist, says one global asset management firm.
“I think for a lot of Chinese companies listed in U.S. markets, it’s essentially game over,” David Loevinger, managing director for emerging markets sovereign research at TCW Group, told CNBC Wednesday. “This is an issue that’s been hanging out there for 20 years — we haven’t been able to solve it.”
TCW Group had $265.8 billion in assets under management as of September 30, 2021, according to the company’s website.
The U.S. Securities and Exchange Commission this month finalized rules to implement a law that would allow the market regulator to ban foreign companies listed in the U.S. from trading if their auditors do not comply with requests for information from American regulators.
The law was passed in 2020 after Chinese regulators repeatedly denied requests from the Public Company Accounting Oversight Board to inspect the audits of Chinese firms that list and trade in the United States.
Given the current level of distrust between the U.S. and Chinese governments, and with the bilateral relationship unlikely to improve anytime soon, there is “no way we are going to solve this in the next few years,” Loevinger said.
“So the reality is, I think, by 2024, most Chinese companies listed on U.S. exchanges are no longer going to be listed in the United States. Most are going to gravitate back to Hong Kong or Shanghai,” he told CNBC’s “Street Signs Asia.”
Less than six months after going public, Chinese ride-hailing giant Didi said it will start delisting from the New York Stock Exchange, and make plans to list in Hong Kong instead.
When a company delists from an exchange like the Nasdaq or the New York Stock Exchange, it loses access to a broad pool of buyers, sellers and intermediaries.
Chinese regulators were reportedly unhappy with Didi’s decision to list in the U.S. without first resolving outstanding cybersecurity concerns. Regulators told the firm’s executives to come up with a plan to delist from the U.S. due to concerns around data leakage, according to reports.
Beyond Didi, many of China’s top internet companies listed in the U.S. have already undertaken dual listings in Hong Kong. Some high-profile names include e-commerce giant Alibaba, its rival JD.com, search engine giant Baidu, gaming firm NetEase and social media giant Weibo.
“We have already hit the turning point,” Loevinger said, pointing to Didi’s delisting announcement. “I just don’t think China’s government is going to allow U.S. regulators to have unfettered access to internal auditing documents of Chinese companies.”
“And if U.S. regulators can’t get access to those documents, then they can’t protect U.S. markets from fraud,” he added.