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Interesting facts regarding staff turnover

Over 50% of the people recruited in to an organisation will leave within two years.
One in four people recruited will leave within six months.
Nearly 70% of organisations report that staff turnover has a negative impact.
Nearly 70% of organisations report having difficulties in replacing staff.
Approximately 50% of organisations experience regular problems with employee retention.

Cost of staff turnover

According to a survey conducted by Mercer Human Resource Consulting in Australia, it suggested that throughout Australia and New Zealand about 25% employees were planning on looking for a new job within the next 12 months.

Reviewing the cost of staff turnover for individual companies can be quite disturbing. Mercer estimated that the total cost of staff turnover could be equalled to anything from 50% to 150% of an individual's annual salary.

For instance, a company with a total amount of 250 employees earning an average of $49,000 annually would pay around $3 Million per year because of staff turnover if Mercer's research were to be believed.

The link between retention and performance

According to research there is a clear link between successful staff retention strategies and the performance of a company. If you take Fortune Magazine's list of the top 100 employers (most of whom have exceptional staff retention records), more than 80% have outperformed their peers on the Standard and Poors Index.

An Aberdeen Group report in 2001 established their findings regarding the performance of high performing organizations. Top performing employees deliver nearly 12 times the value of mid-level performers.

It is evident that happy employees are motivated and remain loyal causing employers to reap the rewards.

Why worry about retaining your staff?

Not only do we lose valuable experience when our staff leave, but organizations need to take a hard look at other factors that are being influenced as well. For instance they need to take a look at:

The costs of decreased productivity.
Lost investment in training and development
Lost of revenue for key sales
Recruitment costs
The new employee's induction into the business culture
Management downtime in interviewing new candidates
Legal fees and payout commitments

There are a lot more to staff turnover costs than first meet the eye, and this is why it is crucial that we recruit the right candidate from the start and then do what we can in order to keep them challenged and satisfied.

Why does your staff leave?

A person's decision to leave the organisation is influenced by what we call the push and pull' factors. The employees' satisfaction, commitments and the way in which they are managed all contribute as push factors' causing a person's disposition to stay or leave.

Decisions to leave are rarely caused by pay satisfaction. Overall, around 10% of leavers across all organisations leave due to their being unhappy of financial circumstances. It is by no means a majority, despite this, most employers place pay-related measures as the key of their retention strategies.

The real reasons why employees leave can be summed up by the following factors:

Intrinsic Work Factors
It is variations of challenging work that uses the employee's skills to the full.

Climate and Culture
Studies have shown a strong link between an individual's reason to leave and the dominant culture of the organisation.

Leadership Style
Throughout most organizations, first line managers are responsible for creating the most push' factors that can lead to resignation or retention. Good managers always deliver high retention as a by-product.

How staff turnover are affecting New Zealand organizations

New studies have highlighted the elevated costs of staff turnover affecting New Zealand hospitals. The study, which has been conducted by the University of Auckland, established that four out of ten nurses in general wards move jobs every year.

And it costs a staggering amount of $25,000 to replace each staff member. Hospitals alone spend around $20,000 per leaving nurse on temporary cover costs and overtime, while another $5000 goes to advertising for new staff and to other training related costs.

With 40% of nurses leaving their jobs each year, over 73% of the leavers are being replaced by new graduates. This causes a wealth of experience to be lost, leaving the hospitals to train the new graduates on the job, which eventually is the most expensive part.

Hospitals need to come up with effective retention strategies in order to keep their nurses, especially since there is a shortage of nurses worldwide as well as in New Zealand.

How to retain your staff?

Listen to your people
Make your employees feel that you are paying attention to them and are interested in them on a personal basis.

Reward and Recognise
Make it known to your employees that you value their opinion and ideas as well as letting them know that you are watching their performance. Know when to Reward your staff.
Sometimes something as simple as a monthly Star Performer' award handed out by a manager in front of other employees can have a far significant impact on motivation and retention than any other financial award will.

Career Development
Develop and craft strategies for each individual employee that will strengthen their development for future success in their careers. It may mean to send employees to various seminars once in a while. Whatever effort you make in order to help someone's career will be long remembered.

Provide Challenges
Employees should be provided with challenging work that will keep them alert and excited, this will cause them to consider staying as they would not want to miss out on good opportunities.

Work/Life Balances
Take work and life balances of your staff into consideration, strive to provide them with a satisfactory mix of time at both work and home. Consider providing them with opportunities such as having a few hours each week where they can work from home. Long hours at the office and satisfaction of your employees do not tend to mix well.

Salary Watch
Make sure to check that you are paying at an appropriate level regarding the particular role of your employees.

Mentors
Partner experienced and inexperienced workers together so that both workers can gain substantial knowledge from each other.

In conclusion

In order to retain our staff we must make sure that we realise the importance of our staff. We must realise that customers and clients do not come first in our organization but make sure that our staff comes first. If we place our staff first, they will be more happy and motivated and as a bonus they in turn will place importance on our customers and clients. Strive for a relaxed and peaceful organization culture and you will find you are more than halve way to retaining your staff.