This has become the go-to line for leaders when I probe on AI, automation, and how they are evolving their operations.
I’ll admit there’s a certain je ne sais quoi about “managing through attrition.” It sounds polished. Strategic. Almost evolutionary. We’re just letting natural churn do its thing. It feels like it could have come out of a whitepaper or an executive offsite. The kind of phrase that sounds smart enough no one stops to ask how it actually works. Or, for the conspiracists among us, whether it’s working at all.
And I may be among the latter, because every time I hear it I can’t stop myself from asking if we are all just pretending this makes sense?
Let’s take a step back.
Attrition only works if people leave. Voluntarily. And that assumes they have somewhere else to go. But over the past 18 months, the data shows that’s not happening. Voluntary quits are down. Labor churn, the piece of employee turnover that is not due to job creation or destruction, has fallen steadily and is now back at levels last seen in the early 2010s. As we’ve previously written about, workers are staying put.
So if everyone is banking on attrition, but attrition is slowing, what happens next?
A few things, potentially.
First, everyone can’t simultaneously reduce hiring and be expecting voluntary exits to create room for cost savings. It’s circular logic. And if no one blinks, the next step isn’t hard to guess. While still sporadic, we’ve seen more of it popping up lately.
Second, attrition doesn’t just affect exits. It creates pressure elsewhere. Even if attrition was happening at the pace everyone’s planning for, that labor doesn’t just vanish. It shows up (or tries to show up) somewhere else. This means fewer promotions. Fewer lateral openings. Fewer entry-level opportunities for new grads. More people competing for the same jobs. Downward wage pressure. Dampened consumer spending. Hiring is a flow, not a static headcount. (Yes, I basically just described a recessionary cycle.)
And third, it might explain why the jobs data hasn’t been squaring with what we have been seeing on the ground. Until last week’s most recent revision, job growth has remained surprisingly strong on paper. Maybe that’s seasonal. Maybe that’s sampling error. Or maybe the President is a reader of Hiring Happens and has been asking the same questions… too soon?
We don’t claim to have all the answers. (Please write if you do. Maybe we’ll do a “letters from the readers” edition.) But if you’re feeling like the math isn’t mathing, you’re not alone.
If everyone is waiting for someone else’s employees to leave…well, eventually, the line stops moving. And then we start to question why we were all just standing in a line in the first place.
Until next time,
Your Spherion South Central WI & Northern IL team