Workforce volatility jumped in 2020
One of the main indicators of workforce volatility, the US. Talent Retention Risk Score, increased 14% in June, a high point for 2020.
A new report has found that workforce volatility was improving by the end of 2020, after a year of significant and widespread upheaval.
The 2020 Workforce Management Benchmark Report was released by Workforce Logiq, a software company that provides workforce management solutions. The report noted that one of its main indicators of workforce volatility, the US. Talent Retention Risk (TRR) Score, had increased 14% in June, a high point for 2020. However, that measurement calmed significantly in Q4 to a relatively stable position, despite the ongoing pandemic.
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The TRR measurement models incorporate macroeconomic trends, employee churn indicators, company-level social media and news sentiment, and other workforce volatility measurements.
“Our benchmarks indicate employment stability is improving, with retention risk slowly declining to historically lower levels. But employers will likely face new challenges in 2021,” said Jim Burke, Workforce Logiq’s CEO. “Workers will continue to migrate outside of cities in pursuit of better lifestyles. Remote work will create national, not local, competition for talent. And vaccination uncertainty and ongoing economic jolts could cause another uptick in volatility.”
Industry hotspots for disruption
The report highlighted a range of specific industries and areas of workforce volatility; for example, the airline industry was one that faced unique challenges. The report noted a dramatic increase in TRR velocity, up +69%, due in part to ongoing struggles with the industry: including the fact that air travel has dropped 40% since the beginning of 2020.
Areas of industry that saw high workforce volatility in Q4 of 2020 included Mining, Quarrying, and Oil and Gas Extraction, which was No. #1 overall in TRR. This was followed by Arts, Entertainment, and Recreation; Finance and insurance; and Utilities completed the top five in the TRR measurement.
The Arts, Entertainment, and Recreation area had the highest yearly increase in workforce volatility. “A Brookings Institution report estimates nationwide losses for this sector to be $150 billion, with New York the hardest-hit metropolitan area,” the report said. “Before the pandemic, New York state’s arts and cultural sector contributed $120 billion to New York’s economy, or 7.5% of the state’s economic output, and employed nearly half a million people. And with increased concern with infection rates and social distancing requirements, even with inoculations, the sector’s volatility seems likely to increase during Q1 2021.”
Perhaps not surprisingly, the Health Care and Social Assistance segment had the lowest volatility measurements, with only a 2% increase from 2019.
Workforce disruption was high in some cities and states
One measurement of workforce disruption was the study’s “likely to engage” measurement, which tracks employees openness to entertaining other employment offers. This measurement showed high volatility in metro areas such as the San Francisco metro area in California and East Coast metro areas such as New York and Boston.
The District of Columbia had the overall highest score in this measurement, followed by the states of New York, Massachusetts, California, and Colorado. But things were improving by year’s-end, the report noted. “All but 9 states showed year-over-year employee volatility improvement, with an additional 4 staying flat since 2019 – albeit with a bumpy ride in between,” the report said.
Overall, the outlook for workforce volatility remains mixed—the report noted that many variables such as vaccination rollouts are difficult to predict. “Despite the overall market improvement, the data shows significant changes in volatility levels across certain jobs and locations,” said Christy Petrosso, PhD., Workforce Logiq’s Chief Data Scientist and Talent Economist. “Forward-looking workforce management leaders are using this time to invest in data-based recruiting and retention programs and really understand the evolving state of the workforce. This leads to confident, fast, and strategic decision-making, enabling employers to capitalize on new trends and build an optimal workforce to handle future shocks.”
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