New Zealanders not yet confident to re-enter the job market
Despite the positive economic indicators many New Zealanders not yet confident to re-enter the job market
Average staff turnover nationally remained relatively stable in 2014 with just a small decrease from 17.2% in 2013 to 16.3% in 2014 according to The 2014 New Zealand Staff Turnover Survey by Lawson Williams Consulting Group in association with the Human Resources Institute of New Zealand (HRINZ).
Involuntary turnover decreased from 4.1% in 2013 down to 3.5% in 2014, which indicates increased business confidence, and yet voluntary turnover also decreased from 13.3% in 2013 to 12.6% in 2014 which shows a reticence or reduction in confidence from employees when it comes to re-entering the employment marketplace.
John Lawson, Principal of Lawson Williams Consulting Group, says, “as we present the 2014 survey results in early 2015, amidst a range of increasingly positive market conditions, we will be interested to note if this is the bottom of the turnover cycle. Considering the positive economic indicators and growth we are experiencing, I expect involuntary turnover to continue to decrease in 2015 and voluntary turnover to increase”.
With turnover costing 50% to 300% of base salary per person departing (depending on the role), staff turnover is a significant financial and productivity issue for employers.
For organisations, staff turnover is an excellent benchmark indicator of the success or otherwise of the organisation’s recruitment, retention and engagement efforts.
HRINZ Chief Executive, Chris Till, says that organisations with high staff turnover, particularly in relation to others in the same industry, need to be wary as it is often a symptom of much deeper issues. “An organisation losing a high percentage of employees likely has underlying problems around its culture and values, which leads to low levels of employee engagement and subsequently decreased innovation, productivity and customer service” says Till. “HR professionals can provide the expert guidance needed to help tackle these complex issues, and can assist in attracting, retaining and developing talent and keeping your workforce engaged, motivated and committed”.
With turnover rates for those employed less than 12 months at 19.4% (higher than overall turnover at 16.3%), there is also a significant opportunity for improvement in organisations where first year turnover is high, or considered high, when compared with turnover beyond the first year.
There is often a strong correlation between staff turnover and economic performance, and this has been reflected in the results of the survey with several sectors that have shown significant growth over the past 12 months. The ICT sector, for example had a voluntary turnover rate of 15.5% in 2013 which climbed to 20.9% in 2014, while voluntary turnover in engineering consulting has increased by 75% over the past year, reflecting the high demand for engineers, particularly in Auckland and Christchurch.
Turnover in the Christchurch region is the highest in the country at 18.1%, with a rate of 15.8% recorded for both Wellington and Auckland.