- HiBob and Fiverr recently published a study detailing the current state of the workforce.
- The study found that people are leaving their jobs rapidly in favor of more flexibility at work and companies are struggling to find ways to fill talent gaps.
- Respondents said it takes an average of 5.4 months to fill a position after someone leaves.
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The findings confirmed that people are leaving their jobs rapidly in favor of more flexibility at work and companies are struggling to find ways to fill talent gaps. Additionally, many people quitting their jobs are not re-entering the workforce and are instead choosing to work for themselves as freelancers or small business owners.
An increased desire for flexibility is pushing more people to quit, creating new challenges for companies with hiring. The study found:
- Companies are having trouble hiring. 61% said that it takes on average, up to six months to hire new full-time employees. 39% said more than 6 months.
- Not only young people are quitting. 46% said that at their companies, managers, and directors are leaving more than entry level employees.
- People are going freelance. 54% of HR leaders and hiring managers said that many people that have left their companies are already working for themselves.
- Companies are hiring freelancers to fill skills gaps. 39% of managers say that they sometimes contact freelancers to fill employment gaps and complete tasks.
Fiverr and HiBob asked 500 HR leaders and 500 hiring managers why people are quitting post-pandemic. Below are the findings.
Why are people leaving their jobs now more than pre-COVID?
- 30% of people in the workforce want more flexibility
- 27% want better pay
- 26% want a promotion
- 26% want to change industries.
Who is quitting and why?
56% of sales, media, and marketing professionals leave because they want more flexibility.
45% of architects and engineers leave for better titles or promotions. Interestingly, high-tech professionals are changing professions or industries or going freelance.
Survey participants said 22% of people across all industries are leaving to become freelancers.
33% of people in arts and culture, 33% in legal professions, 27% in high-tech, 28% in health care, and 36% in marketing are quitting to be freelancers.
COVID changed people’s expectations and priorities. At large companies, 28% of people leaving choose to switch from full-time employment to freelance.
Many are freelancing for the companies they left, with 30% saying they went freelance to get the flexibility they need.
What are the position levels of employees who’ve left the surveyed organizations in the last 6 months?
- Of all people quitting, 46% hold manager or director-level positions, 38% are mid-level managers, and 26% are executives.
- Hiring managers report that 16% of people leaving are entry-level, while HR leaders say 28% are.
- Hiring managers report that 26% are mid-level managers, and HR reports 50%. This shows a discrepancy in how HR leaders and hiring managers view turnover.
What do the surveyed HR leaders and managers think the negative impact of employee turnover has on their company?
- “We incur extra costs to onboard and train new employees hired to replace the ones that left” (35%)
- “A skill gap is created, and for a certain time, our productivity is damaged” (35%)
- “The employees that are still with the company have lower morale” (33%)
- “The company employs fewer veteran employees and camaraderie is decreased” (33%)
- “After employees leave, we have a hard time finding new employees to replace them” (31%)
- “While we search for new employees, existing employees suffer from an extra workload and increased stress” (31%)
Overall, HR leaders and hiring managers see eye-to-eye on the impact of turnover on the organization.
How long does it take for HR leaders and hiring managers to fill positions once an employee has left?
Respondents said it takes an average of 5.4 months to fill a position after someone leaves (HR leaders reported 4.87 months, and hiring managers reported 5.93 months).
The difference in viewpoint can be attributed to time to fill vs. time to hire: Hiring managers consider the time it takes to hire and onboard new people, while HR leaders consider the process complete once a contract is signed.
What do HR leaders and hiring managers think their companies should do differently to overcome employee turnover?
- “Our company should go back to the way things were before COVID— we should be working full-time, 5 days a week, 9-5, onsite. Anyone leaving should be replaced” (42%)
- “Our company should contract freelancers easily and smoothly to fill skills and talent gaps where necessary so that burdens don’t fall on the staff that still are in place” (36%)
- “Our company should pay higher wages to crucial team members and supplement additional work with freelance talent” (35%)
- “Our company should have a more flexible work arrangement allowing employees and anyone working with the company to work from anywhere” (34%)
- “Our company should allow flexible working hours for anyone working with the company” (32%)
Turnover creates skills gaps and adversely affects productivity because fewer team members must handle increasing workloads. Luckily, companies can initiate internal mobility programs and hire freelancers to fill the skills gap.
Today’s workplace is transforming, and HR leaders and hiring managers must adjust and align with the market to reduce turnover and grow.
People want more flexibility, and if they don’t get it, they’ll leave to become freelancers or small business owners.