If there is one number that sums up the career reality facing many workers right now, it is the turnover rate.
The rate, the percent of positions that change bodies in a year within a company, hovered at historically high levels in the late 1990s at Washington's biggest employers. It wasn't unheard of for some midsize technology employers to post 25 percent turnover rates in the late 1990s. Employees with technical skills or any kind of experience that could help a technology firm increase revenue were in such hot demand that job-hopping became the norm, especially for single workers concerned less about stability and more about their compensation and career ascendancy.
Today, many major employers have turnover rates of less than 5 percent. That means that when people leave a job, often employers aren't filling it. It also means that in cubicles across Washington, workers are learning what it means to be stuck in a job.
Employees are staying at their jobs much longer, not necessarily because they want to, but because they feel they have to, according to interviews with employees, human resource managers and employment experts. The number one concern among employees today is job security -- not stock options, not career growth.
Julie Badagliacca left a small Northern Virginia high-tech firm in 2000 to join Freddie Mac, the McLean mortgage finance company, which employs 4,000 people. At her former job, she had noticed a marked shift in the amount of time her colleagues were spending in the game room goofing off on the company's PlayStation. "The less work that came in, the less people went to the game room, because they didn't want to get laid off," said Badagliacca, 30, who works as a Web site manager for Freddie Mac.
She tired of that atmosphere, posted her resume and won the job with Freddie Mac. "I wanted a company that had been around for a long time, with strong earnings, that was not market-driven and was stable financially," she said. Looking back on it, she considers herself one of the lucky ones.
"It was relatively easy to find a job very quickly. I had a lot of interviews and a lot of choices," she said. "But that changed dramatically in a year and a half. I actually feel pretty fortunate I got this job when I did."
Though employee loyalty decreased markedly in the 1990s, the reality is that today there are fewer jobs to move into. Loyalty is now driven by paychecks and benefits, something many job-hoppers enamored of tech riches in the late 1990s suddenly found themselves without in the past two years.
Nevertheless, younger employees in today's workplace are largely from a generation to which company loyalty is foreign, and they struggle with it. The desire to job-hop is still there, but the economy has forced employees to tamp down those expectations.
The Grass Isn't Greener
Companies, while happy not to have to maintain elaborate and generous benefits to attract employees, are nevertheless struggling with different issues related to lower turnover. Convincing an employee to come and stay isn't such a problem; keeping them motivated can be.
At Freddie Mac, the turnover rate at the height of the tech boom in 2000 was 13 percent. The company tried to lure new employees and retain old ones with huge incentives, even raffling off a Volkswagen Bug to a pool of employees who recruited a friend to join the company.
But since the slowdown, the turnover rate at Freddie Mac has dropped to a mere 3.5 percent, even less than its historical average of 6 percent. The company no longer offers the Bug.
More employees are heading back to Freddie Mac, attracted to the stability they once gave up to chase dot-com dreams.
Larry Clink, 52, had been at Freddie Mac for 12 years when he decided in June 1998 that it was time to see what else was out there. When he put his resume on an online job board, he "literally got hundreds of inquiries."
He thought a small start-up wouldn't be as bureaucratic as the larger, more traditional companies, so he went to a dot-com, where he did Web development. He was quickly promoted to manager of the department. But things bothered him about the environment, and the steadiness of Freddie Mac began to call him back.
"When I got into disagreements over budgets and was frustrated with that, I realized small companies just don't have the money you want them to," he said. "Freddie is stable, well-financed, and if I need a tool to do my job, I'm able to get it."
One year and seven months later, he put his resume online again. And again, he received a ton of inquiries, including one from Freddie Mac. "It was tempting to come back," he said. "They reinstated my 12 years of seniority. I couldn't find anyplace else that had the benefits Freddie Mac offers. I was looking for some stability."
Lisa Calla-Russ, a recruiter with Snelling Personnel Services in Vienna, has seen a major change among workers since the economy tanked. She asks job seekers to rank what is most important to them in a job. The resounding answer is job security, a desire that rarely made the list during the boom.
"It used to be that people would leave jobs for whatever. Now . . . the top thing is security," Calla-Russ said. "They don't care about options. They care if they have a job for a year."
But once they have that stable job, one they know will hold them for at least a year, just how motivated are they? Employees accustomed to job-hopping are in danger of falling into a boredom trap -- or of simply feeling trapped, even if they are with a job and career they like. That there are not messages from recruiters on their voice mail means those options, and the excitement of new possibilities, aren't out there. That has been a painful change, even for those who might not want another job. Those feelings can translate into low morale and low productivity, companies have found.
Kathleen Ferris, who as "human resources strategic business partner" is responsible for attracting and keeping the best employees for American Management Systems Inc., said the new trend of staying put has also changed productivity. AMS, a Fairfax technology services firm that does business with the government and private industry, has had layoffs in recent years, and employees have been asked to do more for less. That, combined with the feeling that other job options are not there, has had a negative impact on productivity.
"People are more concerned about keeping a job than about what they're doing," Ferris said. "Their heart's not in it. You're not getting that extra kick from people who love what they're doing." Of course, she adds, that is not true for everyone. But the pall has fallen on many offices in the region.
"People are scared that if they leave without another relatively solid place to go, and that's relatively hard to find these days, they'll be unemployed," said Jane Paradiso, national practice leader of workforce planning for Watson Wyatt Worldwide, a human resources consulting firm. "There are some people who are remaining for the right reasons. But there are some people who in ordinary times would have left. That can make things difficult."
A copywriter in the D.C. region acknowledges that "basically I'm not at my dream job, or even remotely close." She is searching for her perfect career or at least for "something that will bring me greater satisfaction in the meantime," she said via e-mail, to avoid her boss overhearing her discontent. She asked that her name not be used for the same reason.
"My job has pretty good benefits, decent salary. I'm pretty much here to bring home a paycheck at this point," she said.
She notes that this is a relatively new point of view, however. "When I was ready to leave my previous full-time job back in 1999, I did quit without having another job lined up and temped for six months. I can't afford to do that again, though. Times are different," she said. "I'd rather be stuck in an unhappy job situation than standing in the unemployment line."
Because of similar employee sentiment, companies are searching for ways to lift morale. Just as companies used to throw keg parties and foosball challenges to keep employees, they now offer workshops and brown-bag discussions about how to work happily within the company for the long term.
"We keep pushing back to basics," Ferris said. She said AMS will soon launch a program to help employees figure out how to manage their careers "within this company, within this economy, and with the tools and resources you have."
"People don't want a party," she said. "The best thing we can do for people is help them see what options are there for them and let them know it's okay to talk about it."
That is the sort of benefit companies need to create for employees, said John Putzier, author of "Get Weird: 101 Innovative Ways to Make Your Company a Great Place to Work."
"There is a chilling effect, and it is causing people who would be looking for a new job to sit tight," he said. But that does not mean companies should just let them, he said. "Companies' true character is being revealed right now. If you suddenly become autocratic again, that tells the world what you're really about."
Those companies that understand the need to continue offering soft benefits, such as a flexible workplace or career development sessions, will be the ones that win out on the other end of this down cycle, he said. "Those are the kinds of gestures that demonstrate 'We do care, we want to keep our good people,' " he said. "Other companies are in the same financial boat generally. So it's the ones who treat employees with respect and trust that will get the good employees."
Accentuating the Positive
Penny McBain, a managing consultant at human resources consulting firm DBM, said the average healthy turnover rates are about 1 percent per month, or 12 percent a year. The nationwide turnover average is about 3 to 5 percent annually.
Companies typically count normal attrition rates into their year. Those typical rates just are not typical anymore.
Dennis Truskey, vice president of human resources at the Calvert Group in Bethesda, believes his company has worked to keep good employees, even today, during the first employer's market in over five years. Calvert's turnover, which went from 14 percent in 2000 to 5.1 percent in 2002, is attributed to the down market, he said. But he hopes that isn't the only reason people are sticking around.
Calvert has actually increased marketing itself as a great employer, even though it's drowning in resumes. It did the same during the technology boom, to try to attract employees. Now he hopes the good employees will stay because of it. "Back then, it helped how we positioned ourselves as an employer of choice. Now, people are staying here because they like working here," he said.
Companies now take pride in having strong benefits, financial and otherwise, and job security, hoping that will keep employees happy.
Shawn Flaherty, a Freddie Mac spokeswoman, said the company is still adding benefits and gives a nice bonus if an employee refers someone. "Long term is really the key for us," she said. "We want to be considered a great place to work beyond this year." She said the company has a ton of new resumes, with fewer positions. "But it's an opportunity to get some great talent."
Jeff Shuman, vice president of human resources and administration at Herndon-based Northrop Grumman Information Technology, a subsidiary of defense contractor Northrop Grumman Corp., is giddy when he talks about the decreased attrition rate.
"By having lower attrition and growth, that allows us to focus in on new jobs, rather than replacing individuals," he said. In 2002, the IT business hired 4,600. There are 758 jobs open in the division right now, he said. If the company still had to deal with the high turnover of the late 1990s, with the current growth, the challenge might be near impossible.
"When the dot-com boom was going on, we couldn't compete with those companies that said 'Come here, we'll get you a Porsche,' " Shuman said. "So we chose to invest in our people" by providing skills training and other benefits.
More traditional companies, such as Northrop and Lockheed Martin Corp., enjoy the benefit of a slower economy. In 2000, Lockheed Martin had a turnover rate of about 10 percent. Today, it's about 2 percent.
Linda Olin-Weiss, director of staffing for Lockheed, said turnover is low because Lockheed is an attractive place to work. The company created a litany of initiatives emphasizing work-life balance in the past five years, she said, offering flexible schedules, among other things.
Although morale at many companies is low as the economy has changed the way people work, she said, Lockheed's "work-life balance has really impacted morale and improved it. It's improved from good to better."
Recently, to further increase morale, the company has begun to "educate managers and help them educate their employees about what benefits are here," she said. The more employees know about the programs, the higher the morale, the thinking goes.
"Folks went to dot-coms but also went to other companies as well to try it out. That will happen," Olin-Weiss said. "And then they come back."
Clink, the boomerang employee from Freddie Mac, said job-hopping is a thing of the past, at least for now. "Considering today's economic climate, I don't know that you can really do that anymore," he said. "You have to stick around. I have a wife. I have a child. I have to be a little more careful."