The March 2008 Australian Human Resources Institute magazine, HR Monthly, cover story entitled Going concerns: the true cost of staff turnover (membership required to read online text) highlights the increasing cost of staff turnover. It states that:
...staff turnover in Australia has increased by more than five per cent as the continuing skills shortage and the aging population puts people management practices under pressure.
The cost to Australian organisations of the increased turnover has been estimated at $20 billion.
This figure is based on Australian Bureau of Statistics data. That data puts the average Australian salary at $55,660.80 pa, the workforce of 10.6 million, assumes the cost of replacing an employee is 75 per cent of the role's salary and puts turnover rate at an average of 18.5 per cent across all organisations.
When I read this article I started to think of what might happen in the future... is the skills shortage going to become worse due to the increase in the aging workforce, fewer people coming into the workforce, people currently in the workforce looking for work overseas and of course, developing countries such as China and India draining resources for their own burgeoning workforce needs?
Organisations focus on their employer brand and on attracting people to come and work for them. It is now time to start to look at how to retain people.
But you do not want to retain just anybody.
Organisations need to start to think about what their core business is and what type of person they need to help them deliver their business. What skills, capability and attitude can an organisation not afford to lose?
So here are some questions to get you thinking:
- Does your organisation monitor how much staff turnover is costing?
- Does your organisation have the tools to identify employees who have the right skills mix to deliver the business?
- Would your organisation know what skills will be required in the future and where to find these skills?
- Does your organisation have retention strategies?
- Does your organisation conduct exit interviews to gain intelligence of why employees leave?
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