Recent reports show an increase in employee turnover rates across Australia. High staff turnover can increase costs and reduce profits.
Did you know that 1 in 4 employees resign within 12 months?
The Australian government regularly undertakes research and analysis of Australian employment trends, from skills shortages and recruitment experiences to engagement and retention rates. Relating to retention, the research uncovered that the cost of employee turnover in Australia is estimated to be $3.8 billion plus an extra $385 million lost in avoidable recruitment costs.
If those figures aren’t scary enough, according to a recent survey by Robert Half, 1.8 million Australian workers are actively seeking a new job, some of which could be working for you…
Reasons Employees Leave
The top three reasons employees leave their current employer, according to surveys conducted by Michael Page and the AIM NSS are:
- Limited career progression
- Seeking a new challenge
- Insufficient financial reward
However, one of the most important and often unreported factors that drive employees away is poor management and toxic work environments.
What is considered a reasonable employee turnover % rate?
Whilst staff will always come and go, a turnover of 10% to 15% is considered reasonable. However, this will vary depending on your industry and occupational sector.
What are the most commonly offered employer benefits?
When it comes to managing employee retention, some of the most common benefits offered by employers are:
- Flexible Work Practices
- Ongoing learning and development
- Career progression and opportunities
So what can your business do to keep employees on-board? Here, we offer up six retention strategies that are proven to help.
6 Proven Retention Strategies
Whilst there is no harm in turning over a reasonable number of staff (in fact, it’s also beneficial), keeping the top talent should be the main focus when implementing an employment retention strategy.
1. Culture and Communication:
For a while now, the top priority on the business agenda is promoting a healthy corporate culture. Increased retention rates are noticeable in companies putting focus in this area. Cultural fit should therefore be a key requirement of your recruitment and selection process. This involves being able to clearly articulate what your company culture is and what your values and ethics are. Appointing managers with good communication and interpersonal skills is also essential.
2. Developmental Opportunities:
More than half ( 53%) of Australian employers are not offering any training or development programs, yet that is one of the top things employees are seeking to enable career progression. Technology is high on the wanted list with 47% of employees wanting to learn digital skills. If you plan to offer professional development training or financial assistance it is wise to implement policy in this regard, to ensure expectations are managed and a return-on-investment is achieved.
3. Reward and Recognition:
The FY18 Hays Salary Survey reported that 14% of employers did not increase salaries at all and 60% of employers increased salaries by less than 3%. So it’s not surprising that insufficient financial reward is now one of the main reasons employees leave. A competitive salary will help you attract talent. Recognising and praising employees for a job well done is a proven method of boosting employee morale. A pay review or incentive bonus will also help keep your best performers.
4. Flexible Hours or Remote Working:
Certain employees have the right to request flexible working arrangements as part of the National Employment Standards already. However, 60% of employees said working flexibly was the most important to them. If there are aspects of the role that can be done remotely it is worthwhile implementing a policy to support that. Working from home can improve work life balance, save substantial amounts of money for the company and travel costs for employees. Flexible working arrangements allow employees to complete work around their hectic family schedules, avoid travel in peak times and give back some control which are all key factors to improved work life balance and employee retention.
As Gen Y and Gen Z become the majority of today’s workforce, businesses need to adapt to meet their technology needs. Having efficient HR technology ranked highly on what kept employees engaged in their role. Other important areas of technology, such as managing remote working, engaging training through e-learning, managing benefits and improving overall communications are also important considerations.
Keeping employees in the loop with regards to how the business is performing and providing feedback about how they are contributing to business objectives, give staff a clearer understanding of how they are impacting their organisation. It gives them purpose and boosts engagement.
Try focusing on some or all of the 6 areas we have covered and monitor if your turnover rates show some improvements. This will be reflected in the bottom line!