Businesses across Australia and New Zealand are facing one of the most pressing challenges in the modern workforce—staff retention. According to the latest Institute of Managers and Leaders (IML) Staff Retention Report research, resignation rates are climbing to an average of 13.6%, and companies are feeling the impact of a highly competitive job market. The survey reveals that employees are leaving their roles in search of new challenges and better career advancement opportunities, and this trend shows no signs of slowing down.
The cost of losing staff is high. Beyond the direct financial burden of recruiting, onboarding, and training new employees, which IML calculates costs businesses $21,845 for every employee leaving – there is also a loss of institutional knowledge, productivity dips, and potential damage to team morale. The IML research points to a critical solution: investing in staff development, leadership training, and skills enhancement to counter these negative effects. These investments not only improve employee engagement but also boost retention, lift productivity, and ultimately improve the bottom line for businesses.
So why aren’t employers cottoning on to this? For example, a recent IML LinkedIn survey identified that up to 85% of businesses are not investing in the professional development of their new managers. Leaving their managers to sink or swim in their new role, and even worse, putting at risk their biggest asset – an engaged workforce.
Why Employees Are Leaving
Understanding why employees are leaving is key to addressing retention issues. IML’s research identifies several common reasons for resignation, with the top factors being:
- Seeking a new challenge
- Limited opportunities for career progression
- Insufficient financial reward
- Lack of development and training
The data indicates that employees are not just looking for higher salaries; they are seeking opportunities to grow, develop new skills, and advance their careers. This aligns with broader workforce trends that show today’s employees, particularly Millennials and Gen Z, value personal and professional growth as much as financial incentives. Moreover, in a recent survey conducted by Talentpath, career development and training initiatives were in the top three workplace benefits for Gen Y and Gen X as well.
The Role of Staff Development in Retention
Organisations that prioritise learning and development have consistently lower resignation rates than those that do not. IML’s research reveals that companies offering quality training recorded a resignation rate of 12.7%, lower than the national average of 13.6%. It’s also important to distinguish between quality development initiatives verses a ‘tick the box’ approach to development that is largely ineffective in retaining staff. In isolation, online learning platforms are known to deliver low engagement, low completion rates and low outcomes. A recorded piece of video content you might receive from an online learning platform is not an effective development solution to engage your workforce. Quality development is holistic, well-structured and flexible to access that’s delivered over the long term. It should incorporate new skills and ensure opportunities for staff to practice these skills. It’s like anything in life, if you don’t practice it, you’re not going to get good at it.
Staff development doesn’t only benefit employees; it also strengthens the organisation. A well-trained, knowledgeable workforce is more productive, innovative, and capable of adapting to change.
Leadership Training: Building a Stronger Workforce
Investing in management and leadership is an essential strategy for improving staff retention. IML’s research highlights that a significant percentage of employees leave their roles due to limited career progression or a desire for more challenging work. By offering management and leadership development courses, businesses can address these concerns and create a clear path for employees to grow into more senior roles.
Effective leadership is crucial in creating a positive work environment where staff feel supported and valued. We know that over 70% of employee engagement in organisations comes down to the quality of frontline and middle managers. Leaders who have been trained to manage, coach, and mentor their teams effectively contribute to higher morale, better communication, and greater job satisfaction among employees. In turn, these factors directly influence retention.
Additionally, leadership courses can be tailored to meet the specific needs of an organisation. Whether it’s a focus on communication skills, conflict resolution, performance management, or strategic decision-making, these courses equip current and future leaders with the tools they need to navigate the complexities of managing teams in today’s dynamic business landscape.
Investing in People for Long-Term Success
In 2024, retaining quality staff is not just about offering competitive salaries—it’s about creating a workplace where employees feel valued, challenged, and supported in their career development. The findings from the IML’s Staff Retention Report research make it clear that organisations must invest in their people to stay competitive.
By focusing on staff development, leadership training, and skills enhancement, businesses can not only improve employee engagement and retention but also lift productivity and boost their bottom line. In a fast-changing business environment, the organisations that prioritise the growth and development of their workforce will be the ones that thrive.
In short, investing in staff development is not just a retention strategy—it’s a business growth strategy.
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