No matter what industry you work in, staff turnover is a costly issue. It incurs major financial costs and impacts the stress level and morale of current staff, affecting your bottom line in more ways than one.
According to the Australian Bureau of Statistics (ABS), turnover has increased by approximately 25% over the last ten years, with as many as 80% of companies saying they cannot find suitable staff and 37% saying they have major difficulties retaining staff. The problem is only worsening due to the Covid pandemic and the resulting “great resignation.” A recent survey of 1200 Australians revealed that:
- Early intervention into staff turnover
- Reducing impact on bottom line
- Improvements in operation productivity, WHS, and staff engagement
- Enhancements in brand reputation and acquisition of new staff
A lot of this is attributed to the pandemic and recent global events. People’s priorities are shifting, with more of a focus on personal fulfilment and mental health. Some are reluctant to return to work after working remotely. Whatever the reason, it costs Australian businesses millions of dollars.
How much is staff turnover costing you? And most importantly, how can you retain staff? We have the answers.
The high cost of staff turnover
Money and time factor into significant turnover costs. The 2022 HR Industry Benchmark Report for Australia and New Zealand reported the following stats:
- The cost to hire a new employee is ~$23,860
- The overall new hire turnover rate doubled from 7% in 2020 to 14%
- It takes 40 days on average to fill a vacant position
- 1 in 3 respondents said ‘recruiting and executive search’ took up too much of HR’s time relative to the value it brings
Let’s calculate what this means in dollars. Consider this: an organisation of 1,000 employees with an average wage of $60,000 and a turnover rate of 30% will incur a turnover cost of $5,779,800 per year. And these wage and turnover rates are conservative estimates.
What happens if we don’t fix the problem? If the current trajectory continues for ten years, that same company would lose $10,596,300 just in turnover costs.
If you want to put a number on your company’s turnover costs, the State Government of Victoria has created a staff turnover calculator. (Brace yourself first.)
The impact beyond the dollars
High turnover rates put your organisation in a constant cycle of recruiting, training and losing staff. Aside from the financial impact, this puts more stress on your current staff.
Signs that someone is thinking of leaving include increased absenteeism, regular leave and a reduction in productivity. This puts more pressure on other staff to pick up the slack in order to reach daily targets. This extra stress affects your team’s morale, leading to further turnover – before you know it, you are stuck in the cycle.
Meanwhile, the quality of your product or service deteriorates with fewer experienced staff members available, further impacting your profitability.
So what can you do to reduce staff turnover?
We have just the solution.
Retain to gain
Imagine a tool that gives you insight into who is at risk of leaving, when and what may be causing this. In turn, it helps you to see why others stay. Your HR and management teams can then work together to reduce turnover.
How? By using your existing data.
RetainTalent leverages Machine Learning to accurately identify staff members at risk of leaving your organisation within the next 12 months.
By capturing your existing data sources and combining them with a Machine Learning model to develop accurate insights into your labour trends, RetainTalent delivers the information you need to keep your staff.
Identify who is at risk of leaving, why people stay and how it affects your bottom line. With this level of insight, you will have the information necessary to create proactive measures to reduce turnover and retain more staff!
Better insights lead to better decisions. So how can RetainTalent help your business?:
- Retain knowledge and experience
- Increase productivity
- Reduce onboarding costs
- Improve team morale
- Shift focus from recruiting to improving productivity
- HR can focus more on cultural sustainability
- …All of which improves your bottom line!
Going back to our example company of 1,000 employees, if they retained just 10% of their turnover rate, they would save over $1.9 million. It’s possible with RetainTalent.
So if you’re ready to take your employee retention strategies to the next level, contact us today and see the difference that data-driven insights can make!