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Happiness Is ... A Career Move

Published: August 16, 2011 in Knowledge@Australian School of Business
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Job mobility is always an issue in developed economies. If workers are reluctant to change jobs, it becomes difficult for new enterprises to establish themselves, or for existing companies to expand their activities. However, if workers move jobs too readily, organisations end up focusing time and resources on sourcing and recruiting staff, rather than their core activities.

Consequently, understanding how often workers change jobs – and the reasons why they switch or stay put – is important for business.

"Changing jobs is very much the province of the young," says Ian Watson, a lecturer at the Social Policy Research Centre at the University of New South Wales whose paper, Does changing your job leave you better off?, explores motivations for and outcomes of changing employers. Workers aged under 30 years have almost twice the probability of changing jobs as those who are over 50 years old. Watson notes that previous research has shown young people change jobs more often because they are trying to find their "niche" in work, and it often takes several attempts for them to discover where this is.

Watson used the Household Income and Labour Dynamics in Australia (HILDA) Survey to analyse job switching. The data records not just the numbers but also the attitudes of the individuals who made a move. Comparing data from the years 2002 and 2008 (the "bookends" of the data then available), Watson found that the proportion of employed workers who changed their jobs remained very similar – 15% and 17% respectively. The proportion of changing jobs due to retrenchment, or because a job was temporary, fell from 2002 to 2008, no doubt reflecting the relatively improved economic situation in Australia [which was just about to be hit by the effects of the global financial crisis].

There were marked variations by industry. For example, workers in education or government demonstrate a low propensity to change jobs, while workers in hospitality and construction show a much higher inclination to switch. In general terms, turnover is higher in some industries than others due to "casualisation" and career structures. Large organisations have lower turnover because they can offer career paths, which smaller organisations find more difficult.

Watson also discovered a gender divide – blue-collar female workers were less likely to change jobs than professional females, but male workers did not show this pattern.

Another point of interest is that when people do change their jobs, only a small proportion move out of their local areas, with about 70% remaining at the same home address. Of those who did move location, less than a quarter shifted more than 500km away.

According to Watson, one of the key factors keeping employees where they are is a lack of housing options. "Australia has relatively poor rental options," he says. "Renting in Europe, where long-term leases are common, is much easier." Watson cites a New South Wales' government scheme that assists teachers in obtaining housing in country areas, as an example of an employer taking practical steps to help staff relocate.

Analysis of the attitudinal data from the HILDA survey turned up some unexpected results. Higher pay does not rate particularly highly among the reasons workers give for changing jobs. Motivation to earn more rated third, after job satisfaction and job security. And while changing jobs does not tend to improve an individual's pay level, it does increase job satisfaction and skill use. "For employers wanting to retain staff, they'd do better addressing issues of stimulation in the job, rather than money," Watson states. Popular notions of a desire for a "work-life balance" also prove misleading, according to Watson's findings, which showed hours and flexibility rating below pay as a reason for changing.

Behaviour is a function of personality and environment, points out Jeremy Nichols, head of consulting with workforce advisory and management firm Chandler Macleod, which advises clients how to attract new employees and keep the ones they have. "The reasons for people choosing to do something different [in their work life] tend to fall into one of two categories – advancement and avoidance," says Nichols. Under advancement, Nichols defines career moves such as "stepping up in a role" or "taking on a new project challenge", while avoidance encompasses "having a bad manager" or "a poor working culture", which they want to escape. "Businesses with a high turnover of staff need to look at their working environments – the culture, their leaders and their interaction with colleagues – to understand why this is happening." Nichols notes that people interpret corporate messages in a variety of ways, and it's the leaders' job to ensure there are clear and consistent messages to create a culture of engagement with staff.

While accepting that it can be very costly for any business to have a high staff turnover, Nichols points out that managers have further considerations to make about the people that choose to stay put. They may be sticking around, but "we need to ask the question: Are they productive or not productive?" It's a matter of understanding how to retain the right people. Sometimes people leave a business "because they recognise they no longer fit into a new way of working", Nichols notes.

Most businesses are aware that levels of pay are not the overriding motivator for employees, says Nichols. But this understanding can become distorted in businesses where remuneration is largely commission-based. Leaders in these companies can overplay the importance of bonuses over culture. This can lead to a number of people being "high-performing inconsiderates" – people who deliver on the numbers, but are not team players. Such individuals can be detrimental to the wider culture of a business,decreasing the performance of others around them and the business as a whole, Nichols says.

"Leaders need to have awareness and skills to understand why people make these choices [about changing jobs]," says Nichols. "The critical question is, 'what are you doing as a leader to create an environment where staff can advance within the business, rather than go elsewhere?'"

Not surprisingly, the state of the economy is a major influence in determining job mobility. Australia has not suffered a recession since the early 1990s and the two years spanning Watson's review – 2002 and 2008 – were ones of relative prosperity. While this goes beyond the scope of his research project, Watson expects that workers' propensity to change jobs would be affected by the changing balance of power between staff and employers in a worsening economic climate.

"We would expect that people are more risk-averse in difficult times" and would be more reluctant to change jobs, says Watson. Switching employers in a recession due to retrenchment is another matter: "In a recession, employers are able of offer more temporary jobs, which is harder to do in an economic boom."

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