Australian businesses losing staff over lack of future opportunities

REPORT FINDS 79% TO SEEK NEW CHALLENGES, WITH AN AVERAGE $23,753 COST TO REHIRE POSITION

 

  • The National Salary Survey’s Staff Retention Report has found 9.5% of staff resign voluntarily
  • Turnover rates are highest in NSW and ACT (10.8%), and lowest in WA (6.4%)
  • Top factors that drive staff turnover include seeking new challenges (79%), limited career advancement/progression (58%) and insufficient financial rewards (46%).

 

A new report has found 1 in 10 staff members are voluntarily resigning from their positions after Australian organisations are failing to offer meaningful career development opportunities for employees. The 2017 Staff Retention Report, released by the Institute of Managers and Leaders (IML, formerly known as the Australian Institute of Management) as part of the National Salary Survey (NSS), has revealed an alarming rate of staff turnovers per year.

 

While rates are as high as 10.8% in NSW and ACT, resignation in WA shows a much healthier rate of 6.4%. The difference between states is also reflected in the data by industry, with the highest attrition rates in IT (13.9%), business (13.4%) and finance (13.1%) industries, as opposed to the lowest rate in the mining sector (4.5%).

 

Most interestingly, the report found top reasons for voluntary resignation were factors all within organisations’ control and could be prevented. 79% of staff left to seek new challenges, 58% resigned due to limited career advancement, and 46% left over insufficient financial reward. With the NSS 2017 finding an average cost of $23,753 to rehire each lost employee, Australian organisations are facing substantial financial losses due to poor staff retention.

 

The IML 2017 Staff Retention Report is based on a snapshot of responses received from a total of 246 organisations across Australia who completed the National Salary Survey. Respondents from each organisation typically held human resources positions or general management roles in smaller organisations. For the report, data was drawn from specific questions regarding staff turnover and the organisation’s policies.

 

“The Staff Retention Report clearly illustrates employees are staying with organisations not for superficial perks such as free lunches or pool tables, but for opportunities that will help achieve their personal and career goals,” said David Pich FIML, Chief Executive of the Institute of Managers and Leaders. “Staff stay when their organisations show they value them by investing in their professional development and providing a clear path for career progression. The best way for organisations to retain their talent is to make a role more meaningful by adding value to their employees. It’s astonishing the talent and money an organisation will lose over something that is so easily prevented.”

 

The report concluded with recommendations for Australian organisations to strengthen their retention rates. Based on the top factors driving resignation and measuring the retention rates across organisations with different benefits and policies, the report recommended that organisations need to invest in increasing the value of their staff. Offering a more competitive compensation package, health and wellbeing benefits, professional development activities and a clear path for career progress ensures organisations are not suffering financial losses due to unsatisfied staff.

 

“The National Salary Survey is Australia’s oldest and most reliable salary report,” said Sam Bell FIML, the Institute’s General Manager of Corporate Services and Research. “For 53 years, we have been analysing the nation’s workforce and using the data to optimise how businesses are run through understanding their staff. Our reports find solutions to new issues in business so organisations can retain their top talent, operate in a cost-effective manner, and increase staff productivity.

 

“In order to engage and motivate employees and to maximise retention strategies, employers need to take a proactive approach to understanding what motivates their employees and what human resource policies and practices make their organisation more appealing than their competitors.”

 

– ENDS –

 

David Pich and Sam Bell are available for interview upon request.

 

See below for summary of key findings. The 2017 Staff Retention Report is available upon request.

 

For more information about the National Salary Survey visit www.managersandleaders.com.au/National-Salary-Survey

 

For media enquiries, contact

Whitney Duan, Media & Communications Manager

0417 284 411 | whitney.duan@managersandleaders.com.au

 

 

Notes to the Editor: 2017 Staff Retention Report Executive Summary

 

Key research findings

 

  • Resignation Rate by Industry
HighestLowest
Electronics/IT13.9%Agr/Forst/Fish/Farm8.9%
Business/Prof. Services13.4%Manufacturing6.6%
Banks/Finance/Insurance13.1%Mining & Quarrying4.5%

 

  • Resignation Rate by State
    • NSW/ACT highest at 10.8%, WA lowest at 6.4%
    • Biggest decrease from 2016 to 2017 is QLD. Dropped by 2.3% from 10.7% to 8.4%.
    • Biggest increase from 2016 to 2017 is SA. Increased by 1.3%, from 6.3% to 7.6%.

 

  • Top factors driving resignation
    • 79% were seeking new challenges
    • 58% believed their current position and/or organisation had limited opportunities for career advancement/progression
    • 46% resigned over insufficient financial reward

 

  • Strategies that attributed to a lower turnover rate
    • Sufficient financial reward
      • Organisations that increased the total salary package at review time or provided a flexible salary package lowered average resignation rate to 8.3% and 8.7% respectively
      • Organisations that made additional superannuation contributions experienced lower than average resignation rates at 8.0%
    • Stress and work life balance
      • Organisations that provided health and well-being benefits experienced lower than average resignation rates (below 9.5%)
      • Organisations that offered a shorter work week recorded a 9.3% resignation rate, and those that offered flexible start/finish times recorded 9.2%
    • Supportive culture for learning and development
      • Organisations that had a formal individual development plan experienced a lower average resignation rates than those that did not
        • Those in management with a development plan had a 0.9% higher retention rate than those without
        • Organisations that have a set training budget for the year experienced lower than average resignation rates than those that did not (9.3% vs. 10.0%)

 

  • Report conclusions and recommendations
    • Review current policies and procedures
      • Conduct exit interviews (94%)
      • Review/update staff remuneration and benefits policies (66%)
      • Review recruitment/selection procedures (49%)
    • Offer sufficient remuneration package based on industry compensation trends
    • Invest in staff personal health and wellbeing
    • Invest in staff professional development