Just last year, companies were struggling to keep staff. Now, they say not enough people are
leaving their jobs.
Chip Cutter Nov. 6, 2023
The white-collar labor market is softening to a point that companies are encountering an issue
that would have been unthinkable in the era known as the Great Resignation. These days, too few
people are voluntarily leaving their jobs.
Turnover has declined so steeply at some large employers that companies now find themselves over
budget on certain teams, requiring leaders to weigh whether to postpone projects or to cut
additional staff as the end of year approaches. Other bosses worry about how to keep star employees
engaged when there are far fewer vacant positions internally, making it harder to move people into
new roles.

Companies such as Bank of America and drugmaker Ferring Pharmaceuticals said they have seen fewer
employees leave their jobs this year. In some cases, executives said, turnover is returning to
prepandemic levels following years of upheaval in the labor market.

“The attrition level is going down, that’s for sure,” said Denis Machuel, chief executive of global
staffing firm

Adecco Group ADEN 0.53%increase; green up pointing triangle
, which works with large employers. “People feel it’s probably a bit cold outside with the
macroeconomics not being so good. And with this last-in, first-out typical scheme, they’re more
likely to stay in their current role.”

The decline in quitting would seem a welcome development for bosses who spent years bemoaning high
levels of job-hopping and rapidly rising salaries. But some executives said they have been caught
by surprise at how quickly the labor-market dynamics flipped, posing new challenges.

Hiring slowed sharply in October, with U.S. employers adding half as many jobs as they did in
September, according to the Labor Department. The unemployment rate rose to 3.9% from 3.8%,
but is still hovering near historic lows.

Morgan Stanley MS -0.75%decrease; red down pointing triangle
had layoffs in recent months in part because of low attrition within the 80,000-person Wall Street
firm, CEO James Gorman said on a call with investors in mid-October.
“Really high performers are in demand across the Street, but we’ve actually had the opposite
issue,” Gorman said. “We’ve had very low attrition, which is why we did some of the expense

Chief Financial Officer Mike Santomassimo told investors this summer that attrition has been slower
than expected at the company and that the bank planned to record higher severance expenses to
reduce its head count. He reiterated the message in mid-October, telling investors that the company
believed it still had more jobs to cut, as attrition has remained low, which will likely result in
additional severance costs next year.
Morgan Stanley saw more people staying in their jobs—which prompted layoffs in recent months.
At Pitney Bowes, where the attrition rate is also down year to date, the shipping and mailing
services company has had a few instances in which it hired an intern, expecting a vacancy to open
in the company, only for the existing employee to remain in the position. The Stamford, Conn.,
company found other spots for the interns, and has generally managed the lower turnover rate, said
Andrew Gold, chief human resources officer at the company, which had 11,000 employees at the end of

Employers try to accurately predict how many staffers will quit in a given year to help set budgets
for teams and establish hiring plans. At the software provider

ServiceNow, the company uses a machine-learning model to anticipate the number of employees it
expects will step down each quarter. Voluntary turnover this year has fallen below levels forecast
by those models, said Sarah Tilley, senior vice president of global talent. She didn’t cite
specific figures, but attrition among top-performing employees in 2023 is less than half of what it
was in 2022.

“Attrition, it took a nosedive,” Tilley said, adding that the roughly 22,000-employee Santa Clara,
Calif., company’s culture also likely contributed to more workers wanting to stay. “We see it as a
very positive thing.”

Bank of America says that the company will slow down its hiring.
Nationally, what is called the quits rate—the number of resignations as a share of total
employment—remained at 2.3% in September for the third month in a row, down from a 3% peak in April
2022, the Labor Department said Wednesday. The level of quitting hit a
record during the pandemic, as Covid-19 lockdowns eased and workers sought out better pay or
working conditions, leading to a phenomenon that became widely known as the Great Resignation.

In surveys of workers, many show a newfound commitment to their current employers. This year, 73%
of workers said they planned to stay at their jobs, up from 61% last year, according to a survey
released in October by Adecco.

Some movement among employees at a company is healthy and necessary, said Purvi Tailor,
U.S. vice president of human resources at Ferring Pharmaceuticals. Turnover creates promotion
opportunities for high-performing employees and allows employers to bring in new staffers with
fresh perspectives or in-demand skills.

“When you don’t have enough attrition, that is when I think things start to feel stagnant,
especially if people internally aren’t moving around,” she said.

If bosses want to get rid of employees, they can generally fire them, but layoffs can harm morale.
In periods of low turnover, veteran HR leaders said they typically follow a different playbook
before resorting to broader job cuts. When too few employees leave, companies will often get
tougher in performance appraisals, pushing employees to quit. Cash can be another alternative.
During periods of low attrition, companies tend to offer incentives, such as buyouts, to motivate
employees to leave.

At Bank of America, the company told investors in January that it planned to cut its head count
this year through slower hiring and attrition. But that task became more challenging, executives
said, as fewer employees left the bank.

“Over the course of 2023, we’ve seen moving from 2022’s Great Resignation to a current level of a
record low attrition in our company,” CEO Brian Moynihan told investors last month. “All that meant
the team had to work harder to manage that head count down.”

Since January, Bank of America’s workforce has shrunk by about 6,000 full-time employees, to
roughly 213,000 people.

Morgan Stanley’s Gorman told investors that he saw the lack of turnover as a reflection of the
firm’s culture and its stability. “I guess we should feel flattered,” he said, before quickly
adding: “The broader message is attrition has been remarkably low, and that’s something that we’ve
just got to work through.”

After almost 14 years as CEO, Gorman is doing his part to bump up attrition within the bank: He
will step down from the top job in the coming months.