Today on the RecruitingDaily Podcast, we’ve invited Larry Dunivan to dissect and discuss The 2021 Voluntary Termination Study by Namely, an HR, payroll and benefits platform built to help you manage all of your data in one place.
Larry has over 30 years of experience in the software industry, serving currently as the CEO of Namely. His insights into the industry, its people and leadership are well regarded, and his emphasis on talent development, interpersonal interactions and sense of urgency make him truly unique in this landscape.
The questions we answer today: What did the study show, and what was surprising? Why are service workers 44 percent more likely to change jobs now than they were in 2019? How does the data support goals of retention and growth?
We’ve got the answers; tune-in to find out.
Please make sure to drop your thoughts in the comments!
Listening Time: 28 minutes
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Ladies and gentlemen, this is William Tincup, and you’re listening to the RecruitingDaily Podcast. Today, we have a friend of mine, Larry Dunivan, from Namely is on the show. So, the banter is going to be funny, but we’re going to be talking about something that’s absolutely serious.
Namely has done a study… It’s the Voluntary Termination Study. It’s 2021, and it’s something that everybody cares about. While the topic is going to be serious, we might have some fun while we’re doing it. So, Larry, would you do us a favor, the audience a favor, and introduce both yourself and Namely?
Yeah, it’s a pleasure. Thanks William. My name is Larry Dunivan. I am the CEO at Namely. We are a New York City based HCM software company. We primarily serve companies in the mid-market. Those are typically companies with 50 to 500 employees, and we specialize in all the core functions like payroll, HR benefits, time and attendance, recruiting, talent management, and the like. We pride ourselves being on a single platform that helps companies in our target size really run their businesses more effectively.
I love that. So, thanks for your introductions, by the way. Everyone’s curious about this, and everyone’s calling it a little bit different, The Great Resignation, etc. So, you all wanted to study this to find out the separation between the hype, and what’s really going on, and maybe even the drivers of what’s really going on. Why don’t we start with just the top line. What did you want to learn from this study? What did you learn and maybe even something that surprised you?
Yeah, absolutely. So, when we first started bantering around, the dynamics of this thing, that’s been called The Great Resignation, we started to wonder, “Gee, I’d be curious if we looked closer at what our clients have been doing, and how that data might be insightful on a broader basis.”
We just started brainstorming it one day, and we sent off a couple of our engineers to really go take a much closer look at voluntary turnover activity, of course, as a system of record for this information. We have hundreds and hundreds of customers that have been with us 2, 3, 4 years. It was very easy to go back to look at the world in 2019, and then the aberration that was 2020. And then as things have changed going into 2021, what did that look like?
What we found most interesting is the headline, in 2020, people didn’t change jobs. And in 2021, they did so like crazy, just reinforcing this notion of The Great Resignation. Really more importantly, what we did see in 2020 is people hunkered down. You wanted to protect the job you had, or you wanted to see what the world would look like.
As we headed into 2021, the combination of the surging economy, the hope, although that’s been a bit dashed of late that this pandemic has coming on. There’s a great deal of data that supported this notion that people were interested in a change. What was also interesting, as we projected it on our own experience, what I would generalize is to suggest that, people are leaving jobs even though they love their job and the company they work in. Because, they’re just in a mental mindset that says, “I need a change.” And-
Is this some of them mental stress from COVID that gets rendered as, ” You know what, love the company, love my boss, love the team, love what we’re doing.” It’s like moving to a new town. I just need to do something different.
Change of scenery, absolutely.
Huh, change of scenery, got it.
I was fascinated from my own experience because I bounced around between New York and California during COVID. And every time I switched, it felt fresh. That was meaningful. What was shocking on a more personal level was, we had a couple people that were those people that I was like, “They bleed Namely blue.
They’re not going anywhere.” And they came to us and said, “We love the company, but it’s time for me to do this.” And often that’s a broader shift and maybe we see it kind of in the dynamics of service oriented workers who are like, “You know, there might’ve been things I loved about working in a bar, being a bartender, but in 2021, forget it. I’m not interested.”
But, what’s also interesting is when you drill into that, there are some things that you would expect and some things you wouldn’t expect. So, when we looked at it by profession, as I just noted service workers, 44% more likely to change jobs in 2021 than they were in 2019. So, not surprising. Voluntary-
Real quick on that, Larry. Did the reasons for their switch, outside of scenery, for that particular industry, is that pay? Does it come down to pay benefits, perks, things like that?
I think pay and career shifts. The reality is when you look at the jobs in the non-direct service industries, and I’ll give you an example here in a minute. The opportunities outside that are really interesting. For example, every year we hire a bunch of temporary workers, right about this time to help us get through the year-end rush.
We hire permanently anywhere from a third or a half of those based on how fast we grow and how many people we lose. We thought for sure we were going to have difficulty because you hear all the temp staffing agencies saying, “It is impossible to find people.” We filled those 15 positions and all 15 people showed up on day one. One of the things we learned was, about a third of them came out of hospitality.
Listen, let’s be honest, the work of payroll and HR support, isn’t always the most sexy, but if you’ve been working in a restaurant for years and you see a nice 20, 25% bump and a different kind of career opportunity, again, that’s a very small sample size, can’t judge from it. But, we thought, like so many other businesses, we’d have 10 people show up on day one, all 15. So, that’s one dimension. Interestingly, in contrast to service workers, the slowest, the most modest increase in voluntary attrition was sales workers.
Huh. What do you attribute that to?
I’ve managed a lot of salespeople in my career, and if you’re a successful salesperson, you always ask a very important question, which is, “Is it more expensive to leave or to stay?” In an economy like this, that also means that the opportunities are strong, pipelines are pretty healthy. It’s expensive to leave when you have a really strong pipeline as a [inaudible 00:07:56]. Of course, you’re not going to see the same kind of fundamental shifts out of sales that you might see out of service oriented or hospitality jobs.
Well, and you tethered it to compensate in one way, which is really interesting because there’s bonuses. There’s all kinds of things that you hit, quarterly things. Also, anytime you change in sales, even if you’re changing within the industry, it’s still a ramp. You got to learn the product. You got to learn the service. It takes a little while to get used to this. It takes a while to get to that spot where… You could do a demo, and you can really explain what the business does. So, yeah, that makes sense to me.
Yeah, and I always love salespeople that have big mortgages and big pipelines.
Because, those are the people that are going to… If you create a great environment for salespeople to thrive, they stay. Now, here’s the one that was the most interesting to me. When you look at ethnicity in 2020, non-white people, Hispanic, Latino, Black, African-American, Asian, were all less likely than average to leave in 2020. They stuck where they were more so than let’s broadly call it everyone else, which is effectively the white population.
But in 2021, it went exactly the other way. Asian and Hispanic attrition was 20% higher than the average. African American was about 8.5% higher. So, the Delta between need to stay put and ready to move on was more pronounced. I personally think, that in 2021, there isn’t a recruiter around that isn’t more actively trying to recruit people of color, if there…
I think a big part of that is that, just frankly, then add to it, this crazy recruiting climate. If you’re an African-American with the right skillset, it’s kind of like that starter home in the suburbs of Denver. It’s going to get a hundred offers. So, I think that’s part of what’s going on as well.
Anything gender wise? Anything pop out there between just men and women, or we can go through all the pronouns?
Women were slightly higher, but I wouldn’t say it was material. In 2019, they left voluntarily more than average, and in 2021, they were 2.5% more likely to leave. Those are not meaningful numbers. They’re not statistically relevant. So, gender, nothing interesting.
So when people read the study, then the next logical thought is, “Okay, this is giving us some idea of why, who, how, etc. Which is clearly going to lead to both an attraction question like, “Okay, how do we attract talent and build pipelines and make sure to ensure that we grow,” and the other is, “How do we retain the talent that we have?” So just on one level, how do you think that the report helps people understand either side of those?
I just finished a Forbes Council piece effectively on that subject about… I always write for them through the eyes of the CEO. So based on this data, what should a CEO be contemplating? Which, I think indirectly answers your question, which is, first of all, and we’re experiencing this for sure, candidate pools are actually more robust. All these people are willing to change jobs. So, they are presenting themselves in ways they have not in the past. Nobody is doing anything but complaining for example, about trying to fill engineering positions.
With that said, we have found an interesting flow, not enough, but above anything we were getting in 2019 and 2020 of qualified candidates that are interested in working here. People’s willingness to change jobs at higher rates because of the societal dynamics means they’re also around in the candidate pools. You got to pay attention to that.
So for that, it’s really doubling down on how you manage your career page and your job postings, and if you’re not treating it like a digital marketing initiative, you’re going to miss the boat. The other thing that I’ve suggested in this climate is, you got to double down on employee referral programs.
People are hanging out with each other. They’re complaining about the things that are perfect or that they want to change. We, for example, have doubled our referral bonuses for all our hard to fill positions. I personally have reached out to former employees with offers of return to boomerang bonuses to try to attract people back. Were you going to say something?
Yeah, I was. You inspired me to think about signing bonuses? There’s probably pros and cons to signing bonuses in any climate, but do you see more of those as a part of the attraction side of just like, “Hey, we want you to make the move. We’re committed to you, learning path, skills development, whatever, but by the way, we’re going to write a check for, this. Just so you know that we’re serious about having you on as talent.”
For certain candidates, yes, we have done that-
We tend to do it on a more candidate by candidate basis-
Yeah, of course.
… ironically enough. The category that’s the most difficult for us at Namely right now, is sales development reps, the people that help us generate demand. We implemented them there. Those are jobs that pay in the 50 to $80,000 a year range. They’re not that [inaudible 00:13:55] positions that they’re high turnover. They’re hard to fill, and they’re hard to fill with the right people because they’re hard jobs.
Right, and pulling from those with contiguous skillsets, you’re going to be able to grow SDRs. If you’re not harvesting them and building them yourself, or taking them from somebody else and recruiting them from somebody else, what other options do you have?
Yeah, you don’t. And it’s so important because if you don’t keep those positions filled, revenue does not show up in the door.
That’s right. It’s just like all that vertical chain of marketing that leads to the BDRs, it leads to sales. You got to have all of it. With you publishing the report, what have your customers said to you?
First of all, they’re fascinated by the dynamics around it because it validates what they probably intuitively believe. What I’ve learned about our customers is, they’re a special breed because most of our customers have anywhere from one to three people managing the people organization and that’s everything from HR to payroll to benefits. They rarely get the opportunity to step back and think about some of this stuff more broadly.
They’re always both very interested in what those dynamics mean, but more importantly, helping them to also better understand how to respond to it. What I am finding is, and this is kind of the voice I personally applied to it as well, is helping them understand how to evangelize those messages with their C-suite leaders, like their business owner, CEO, or CFO.
I think that some of the things that we’ve shared with them is that, for example, “You got to recruit at warp speed.” Everybody talks about that, but few people really master the game. If you want to play in this world, you cannot let a candidate hang around for a minute. I always use the same comparison, “If you waited until day four to look at that house, forget it, it’s sold.”
Yeah, there’s already four contracts on it. It’s not just sold, there’s, three other people in front of you. You have zero chance. I want to make sure that I did capture that, “What shocked you part?” I think you touched on it, but I just want to make sure that the audience gets the… Because whenever you do a study, there’s always something you’re like, “Okay, that validated something I already kind of felt.” There’s always something that comes out of left field that you’re like, “Huh? How did the… What.. I didn’t understand.” What was that for you? Just so for my-
Without a doubt, the ethnicity distinction. I think we all knew the trend was there, but I did not expect it to be as pronounced. I think another important reason for that, is that, if you are in some of these communities, and you watched how your organization behaved through 2020, that is also going to be a big driver for making choices to leave. And, combine that with a broader level of interest in organizations to diversify the workforce, you have a perfect storm.
It’s interesting that you mentioned, because that was going to be the next thing that I asked, both from an employee perspective and retention. Also, for candidates, when they go and talk to new companies that, “How you manage COVID?” How the company managed COVID? It was a pandemic, it still is technically a pandemic. We’re still going through it. Some companies, they just have different strategies, and they managed it differently.
They communicated differently, etc. So, how do you think that that impacted both the turnover, the retention part, but also how do you think that the long tail of how candidates are asking questions about how companies manage COVID?
I think you can’t talk about 2020 and not talk about two important dimensions. COVID of course, and all of this wave around social justice issues. Both of those created once in a lifetime kinds of leadership challenges for organizations that questioned everything about the business, about their values, their ability to continue as a going concern, the kind of organization that they were going to represent. How they were going to embrace and address employee issues.
For me, it’s getting to be a little overused word, I’ve been very fond of it throughout my leadership periods, empathy. If organizations responded through a lens that demonstrated empathy, I think they came out the other side or will ultimately be measured as having come out the other side on this.
This might not be in the study, but I want to get your take regardless. I did a webinar yesterday and it was on basically just kind of giving people over overview of what we just went through and what’s coming next.
A lot of it was around hybrid and remote work and things like that. A lot of the questions that I got, ironically, were about how do you convince someone to not work remote, that wants to work remote, but you want them to be in the office. Literally 10 people asked the same question, I use different words, but it was like, “The talent will work the way the talent wants to work.”
That was one of my points of the webinar, was like, “Yeah, you don’t get to decide anymore.” Air’s out of the bottle. The knowledge economy and knowledge workers, they’re going to work the way they want to work, and you got to model yourself after them. But literally 10 people asked me, “Okay, but what if we don’t want them to work remotely? How do we convince them of otherwise?”
So, what’s your take, as it relates back to kind of voluntary termination, when people decide to leave. What do you think that the workplace and maybe even a work style and the way that people work, how do you think that that impacts?
Well, first of all, I will predict that your audience were HR leaders. I will guarantee you-
You want me to send you the list?
Most of them have CEOs who’ve called them up or walked into their office and said, “Get everybody back in the office because I want-
That’s exactly right.
Yep, and I actually wrote about this, this week as well. The reality is the problem is with the CEO. You alluded to it, that ship has sailed. It is not coming back. Therefore, I believe that leaders that want to come back to that environment will either have to transition the workforce to people that will accept that or want it, and there certainly are some people for whom that’s true, or they will have to create other kinds of cultural and, or financial incentives to motivate people to do it.
I’ve had, especially, some of my 30 something leaders who not only went remote during COVID, but had children, they’re like, “I am not coming back.” These are people that live in New Jersey commute to New York. It’s two and a half hours out of their day. Now that they’ve experienced it, forget it. It’s not happening, like you said.
There’s really only two options that work long-term. There’s a hybrid one, which is some sort of mixed, and a remote first version, which I think is the way that, especially with the knowledge worker communities, cultures are going to have to align to be an employer of choice.
It’s interesting that you mentioned incentives because with that model, you’ve seen this with some of the wall street firms in particular, they’re willing to pay people more-
“Okay, if you come into the office, we’re going to pay you, 10, 15, 20% more.” But Larry, you know because you’ve studied this, your entire life in terms of pay equity. Doesn’t this just get us further down the road of more inequities?
I guess it depends because you may quickly discover that you can get those people until the remote company attracts them at the same pay-
By the way, the last three years in New York have been very interesting in that regard, because I went from an average workforce in the forties to one in the late twenties and that generational shift is profound. It’s exacerbated in New York City for a variety of reasons that make it a bit of an outlier, but when you think about some of these firms that are making these claims, those same guys, “I’m staring at the world trade center outside my office window.”
Those guys at Goldman Sachs that are getting attracted before they get married, have a baby, move to the suburbs, they’re going to watch all of their friends and neighbors working from home. It’s only a matter of time.
It’s so interesting that you mentioned that because the word commute, when I was talking to a bunch of people at Indeed the other day about this, obviously the number one search phrase is remote work, DEI, all of those types of things, which would obviously make sense. There’s transparency that it’s expected that you touched on both as an employee and as a candidate, the expectation has just changed. You talk openly about DEI and social issues.
You’re going to talk openly about remote work. You’re going to have a philosophy or etc. The word commute, to you and I, commute wasn’t a bad word. It’s like, “Whatever. I got to go to the job. I get in a car. I get on a train. I might take a flight. Whatever the bit is, it’s a commute. It’s no big deal.” But man, you say commute today to candidates. It’s almost like you’re cursing.
Well, it’s interesting. I have twin 30 year old daughters. One has never worked in an office her entire career and can’t even imagine what it would be like to drive to work every day. The other had about a 45 commute into downtown Boston and dug it. I do my reading. I bring my crafts. Then she went home for COVID, and she’s like, “Mm-mm negative), never going.”
Again, the air’s out of the bottle.
You obviously understand the New York commute, which can be treacherous, but the folks in LA and San Francisco also go through the same thing-
… an hour and a half commute for some of my friends in the Bay Area. That’s normal, pre COVID, normal like, “Oh, yeah. It’s an hour and a half commute.” It’s like, “What, three hours a day, that’s gone.”
Before I came to Namely, I was leading a company in Pleasanton, reverse commuting from downtown San Francisco, 38 miles each way and in the morning it was fine. But in the afternoon, if I didn’t leave that office at 4:00, forget it. So, the deal was, if you wanted me after 4:00, it was on the phone, otherwise I wasn’t around. Because, it was absolutely unmanageable any other way.
So two things, one business travel, what’s your take on business travel, as it relates to turnover? People with this, like, “We’re working remote.” We’ve kind of touched on that, but also is business travel fundamentally changed, in your opinion? And then the second thing and the last thing would be, the next for the study. Where do you want to take this study after this?
Business travel is an interesting one. I can tell you that I’m done traveling the way I used to, much in the same way people are done commuting the way they used to. There’s a lot of interactions that we won’t even think twice about, suggesting we get together.
Now there will be, where we are going to have a short memory is in sales because the reality is that there’s a sales advantage if you’re in front of the customer and there will be a day when clients will no longer refuse to let you come and much like we talked about, whether New York was going to come back after 9/11, some of that stuff will recover.
You take the world of implementation consulting. My daughter is an implementation manager. She manages the team for an eightfold consultancy, and they will never go back to doing implementations onsite. It’s a waste of money. So, that stuff’s gone forever, but the sales part, yeah, we’ll forget about it, and it’ll leak back, but it’s going to take two or three years I predict.
And where do you want to take the study next?
The biggest thing we’re doing is we want to drill deeper into the reasons why, and we know we need some more time in 2021 to better understand, and we’ve got to encourage customers to give us a little bit higher quality data granularly, which our mid-market customers aren’t that akin to do. What we really want to be able to say is, “Now, why is an Asian engineer leaving at five times the rate of a non Asian engineer?”
Perfect. My friend, always. I love talking to you. Thank you so much. I love that you did this study, and it’s just great for your customers and prospects. So, thank you. Keep up the great work and just appreciate you coming on the show.
My pleasure, thanks for having me.
Alrighty, and thanks for everyone listening to the RecruitingDaily Podcast, until next time.