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Insync Surveys – employee, customer and board engagement measurement and improvement specialists – has released its 2012 Retention Review. The report reveals that Australian organisations can influence and have the power to change 80% of their staff turnover.
Nicholas Barnett, Insync Surveys CEO said: “An average staff turnover rate of 18% costs organisations with 100 employees around $1 million every year. Employers can save around $280,000 per year for every 100 staff they employ by reducing their turnover by just 5% (for example from 18% to 13%). This assumes an average annual salary of $75,000 and a conservative turnover cost per employee of 75% of annual salary (including the cost of recruitment, selection, induction, training and lost productivity whilst getting up to speed). This should be achievable for many Australian companies as our research shows 80% of turnover is within their control.
“In a low growth economy, with significant pressures on organisations to increase productivity and reduce costs, extra focus on reducing staff turnover is essential.
“There are 11.5 million people employed in Australia earning $638 billion per year. When you consider that around 2 million Australians are likely to leave their jobs in the next 12 months, staff turnover costs this country around $83 billion every year. A reduction in turnover of just 5% (i.e. from 18% to 13%) could save the Australian economy $23 billion each year.”
The Insync Surveys research is based on exit survey responses from over 11,000 employees and 40 Australian-based organisations over a four and a half year period. This latest research primarily focused on those who departed between January 2011 and April 2012. The organisations range in size from 50 to 30,000 employees and include most industries such as state government, manufacturing, financial, wholesale, professional services and other private entities.
Another key finding is that job enrichment and flexibility are more important than most employers realise if they want to retain their high performers.
“Our research has found employees leave primarily due to the job itself and not for reasons such as pay and conditions or relationships with managers or peers. If a job is inherently unfulfilling or unsatisfying it’s highly likely that employees will look elsewhere for other opportunities, no matter what incentives are in place”, said Barnett.
“The main drivers of staff turnover have not changed when comparing this year’s data to that of 2009, in the middle of the Global Financial Crisis. There’s been little environmental change to impact the reasons people leave so organisations still have the power to reduce turnover and in turn, improve productivity and performance,” said Barnett.
The 2012 Retention Review also reveals the importance of home life circumstances to all job leavers. We expect to see women rate reasons such as family and other life circumstances as drivers for leaving but 40% of men also say home life reasons played a major part in leaving. The percentage for women is 47%.
“It’s important organisations realise the importance of flexibility to all staff, not just women who are traditionally seen as the jugglers of work and family commitments. Although men highly value job and structural factors such as career opportunities, professional development and job satisfaction, home life reasons are also on their radar when it comes to deciding to leave their employer,” said Barnett.
Other key findings of the 2012 Retention Review are:
- People still leave primarily because of the job itself, with 51% rating job enrichment as most important
- Gen Y’s top reasons for leaving are career opportunities and better job offers, while Gen X and Baby Boomers say job satisfaction is most important
- Industry spotlight: job enrichment is the main driver for financial services and engineering employees; home life is valued most by the retail sector; and community services employees leave because of work stress and to find work-life balance
- The growing part-time workforce grapple to find work-life balance whilst seeking career opportunities and job satisfaction
“Based on our research, we believe there are five crucial steps organisations can take to reduce staff turnover and make a notable difference to internal efficiencies, customer relationships and profitability. The first step is to measure turnover to develop a clear retention roadmap, then continue making jobs more meaningful, foster a positive workplace culture, enable and recognise performance, and accommodate home life circumstances. Reducing staff turnover is not just an HR issue; it requires the focus and attention of the whole executive team, supported by managers at all levels,” said Barnett.
Download the 2012 Retention Review
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