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Job turnover increases in recovering market

Patrick McAvoy knew his job had some drawbacks. As a contract employee at the University of Maryland, Baltimore, he lacked benefits and long-term stability, but he stayed on as an events coordinator for three years, hoping to be hired full time and seeing little opportunity elsewhere.

This year, the job market shifted, and by spring, he had two offers.

"It was pretty stunning. You send out resumes so many times and don't hear anything back. Then you hear back from multiple places, and all of them are good opportunities for your future," said McAvoy, 28, who turned down an information technology job at the Johns Hopkins University to be an events planner for the Downtown Partnership of Baltimore.

McAvoy's good fortune illustrates a significant shift in the slowly recovering job market. As hiring picks up across the nation, more people are leaving their jobs voluntarily — a promising sign for workers, companies and the economy.

The "quit rate" — the percentage of American workers who leave jobs voluntarily — has risen to the highest level in four years. That shows that workers are more confident about finding new jobs, said Sophia Koropeckyj, an economist with Moody's economy.com.

"When people change jobs, they [usually] change to better jobs and change to higher-paying jobs," Koropeckyj said. "When people don't change jobs, they can be dissatisfied, and morale is low. If they're there because they're afraid to leave the job, that could have an effect on productivity. The ability to change jobs is a good sign in the economy."

The number of available jobs, which plummeted to under 2.2 million in July 2009 during the recession, has averaged nearly 3.8 million since the beginning of 2013, according to the federal Bureau of Labor Statistics.

State officials said Friday that Maryland employers added 4,600 jobs in May, though the unemployment rate rose slightly to 6.7 percent. The job sectors of professional and business services, and of trade, transportation and utilities added 6,600 jobs. The sectors of construction and of education and health services lost jobs.

Despite the nation's job growth, the economic recovery has been slow — and its prospects remain uncertain. On Thursday, for example, the Dow Jones industrial average plunged more than 350 points, eliminating almost two months of gains. And many job seekers have been forced to accept lower-paying jobs than they held before the recession.

Sequestration, the automatic federal spending cuts designed to reduce the deficit, as well as the expiration of the payroll tax holiday have prevented the economy from growing more quickly, said Richard P. Clinch, director of economic research for the University of Baltimore's Jacob France Institute. Additionally, the global recession and the slower growth of China's economy have reduced exports.

Until consumers become more optimistic about the economy's future, they won't be spending; businesses, in turn, won't reinvest profits until customers return, Clinch said. Even as conditions improve, job openings must grow another 10 percent to 20 percent to get back to pre-recession levels, he added.

With the expansion of the job market, more than half of the 153 organizations surveyed by consulting firm Ol Partners reported higher turnover, according to research released in May. And that involved all types of jobs, including middle managers and senior-level executives.

Employers are responding — especially to supervisors and those tagged as future leaders — by offering job coaching and increasing pay and benefits, said Patty Prosser, chair of OI Partners. Front-line employees are being given improved training and perks such as tuition reimbursement and flexible hours and schedules.

"Companies are getting aggressive with counteroffers of more money or better quality of life," said Patrice Rice, founder of Patrice & Associates, a hospitality recruiting agency near Annapolis. "A lot are starting to put together packages for employees that are more attractive. … The job seekers are using the new job offers to get a better opportunity at their current position."

Finding replacement workers, meanwhile, can be difficult.

In the restaurant industry, which traditionally has high turnover, replacing a manager can take two months, Rice said. The restaurant must advertise the job, screen candidates and conduct in-person interviews, background checks and personality tests, she said. Candidates are plentiful, but qualified ones are not, she added.

Even within the past year, employees were afraid to change jobs because of the nationwide financial instability, Rice said. "People were worried about whether a restaurant or hotel chain would be able to stay open or have to close a location."

But now confidence among workers in the hospitality industry is rising, she said. Restaurants are opening new locations, hotels are expanding, and companies are seeking managers, shift leaders, cooks and servers.

Some workers have become less willing to wait for raises.

"If you're told to wait a year, you don't want to wait a year," said Emily Testerman, a 2010 graduate of Stevenson University who has found opportunities whenever she has looked into changing jobs. "You work hard and want to make more, so you look."

Testerman, 24, left a job in November to work as a retail marketing manager for Diamond Comic Distributors in Timonium. It's the third company she's worked for out of college. She landed her first full-time job in fall 2010 as a public relations coordinator for Vitamin, a Canton-based graphic design and public relations firm, and worked there for a year.

"I ended up leaving because it really, really delved into the PR stuff, and … it wasn't my thing," she said. "I was super-grateful for working there but started looking 10 months in."

She was hired as an account manager at Adcieo LLC, a Baltimore agency that works with nonprofit groups on email campaigns. After working there for a year, she thought about looking elsewhere once again. Before she could start, she got a call from Diamond, which had interviewed her previously.

Her job with Diamond, for which she writes a column and newsletter aimed at comic shop owners, came with a bigger salary and more opportunity. For the first time, Testerman feels she won't need to start looking again anytime soon.

Testerman believes she has progressed because she's realistic and open-minded about her options. As an English major in college, she originally wanted to write for magazines.

"I don't scour the job sites searching for something that's exactly what I thought I wanted to do," she said. "I don't just search 'entertainment writer,' because that's not going to be there. You have to be flexible and realize you could end up somewhere that you could make work. If you can use the skills you've learned or you're good at, you'll do OK as long as you can move along there."

Many job seekers who applied for the more than 2,000 openings at Maryland Live in Hanover were hoping to use skills they had learned elsewhere to move into positions with more potential for advancement, said Howard Weinstein, the casino's senior vice president overseeing human resources.

Carol Pennachio, a 48-year-old Frederick native, had been working in hotel hospitality when she showed up at Maryland Live's hiring center the day it opened in January 2012. Recruiters there suggested that she interview for an entry-level steward position, and hinted at the potential for quick promotion. She's twice been given more responsibility and is now executive steward, managing six other supervisors.

"I just wanted to join a company that was growing, so that I could grow with it," Pennachio said. "Here was a chance to use skills I had learned elsewhere in a position that has better salary and better hours."

Weinstein said Maryland Live, owned by the Cordish Cos., has put incentives such as a free health clinic and discounted lunches in place to retain employees.

"We realize it's a competitive environment right now and that we need to do things to attract and keep quality people," he said.

Maryland Live has promoted 92 employees since opening last June. Still, the casino has seen several workers leave for better opportunities; a digital-media specialist left to become a project manager with a slot-machine manufacturer, and an entertainment manager took a similar position at a larger venue.

Job-hoppers have contributed to a jump in the nation's "quit rate," which hit 1.7 percent in January, February and April, the highest level in more than four years. The rate averaged 2.2 percent in 2005 and 2006, but plummeted during the recession, hitting a low of 1.2 percent in September 2009.

This so-called job churning can be seen among workers of all ages.

"Job churning is more of a younger-person game than an older-person's game," said Clinch of the University of Baltimore. "But in a recovery, churning is across the board."

A recent survey by online employment marketplace Monster showed the frustration many job seekers feel, with more than half of those surveyed struggling to find a job matching their salary, title and location preferences.

The survey of nearly 6,000 Monster users showed that 42 percent of job seekers who are employed are unhappy with their jobs. Most in that group plan to job-hunt in the next year and are confident about landing new jobs.

Monica Krausch, 35, of Aberdeen knows well that the current job market still has its share of hurdles.

"I'm embarrassed to say that the last three years, I've had five or six jobs, and I'm not one for job-hopping," she said.

Krausch has worked in the automotive industry for more than a decade, usually on commission in parts and service departments for high-end car dealerships. She's lost some jobs through layoffs and struggled to earn a living on commission.

She hoped for better with a new career, and went back to the Art Institute of York for an architecture and design degree. But her job search after graduation in January 2012 turned up only low-paying internships that wouldn't pay the bills. She returned to an auto-parts job but was laid off last summer.

She started a design and photography business, then in April finally found a job in her newly chosen field as a color consultant at a local paint store. The work is part time, for now.

Krausch depends on help from family to pay bills and repay a student loan.

"I'm doing everything in my power, as far as the job is concerned, to work myself up through the ranks," she said. "I would definitely like to make a career" here.

Baltimore Sun reporters Eileen Ambrose and Chris Korman contributed to this article.

lorraine.mirabella@baltsun.com

Copyright © 2014, The Baltimore Sun
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