Need help getting started?
Talk to us today about your organisation’s EVP.
Benchmarking board performance: 500 board reviews later
Unlock evidence-based insights into board performanceOur recent study of our extensive Exit Survey database, the 2012 Retention Review, found the majority of people leave their jobs because of the job itself – either they didn’t suit their role or the role didn’t suit them. |
Even if they are paid fairly or enjoy good relationships with peers and managers, people will leave if the job isn’t fulfilling or doesn’t offer career and professional development opportunities.
Reducing turnover and retaining capable and experienced employees for longer makes a notable difference to internal efficiencies, customer relationships and profitability. One strategy for reducing turnover is to develop a retention roadmap by analysing the factors that drive turnover, setting realistic turnover targets and positioning the organisation as an employer of choice. A retention roadmap can direct an employer’s retention investment to the most profitable areas and help shape a compelling and unique employee value proposition (EVP).
Some turnover is expected, even necessary. However, when high performing employees are the ones leaving, employers must be on top of understanding the unique causes of turnover in their organisation and industry. Emotions can run high when people leave and anecdotal evidence can be given too much weight. This is not to suggest that it should be ignored, rather that it should be placed in the proper context. To interpret and make sense of the causes of staff turnover, employers need a robust conceptual framework to organise the information they receive and then to use efficient and effective methods for gathering and analysing the data. That’s why many of our clients use our Exit Interview tool.
The retention roadmap will be driven by the staff turnover levels the organisation decides to target. These must be realistic within the organisation and industry context. Turnover targets will be influenced by:
An average staff turnover rate of 18% costs organisations with 100 employees around $1 million every year. Employers can save around $280,000 per year for every 100 staff they employ by reducing their turnover by just 5% (for example from 18% to 13%). This assumes an average annual salary of $75,000 and a conservative turnover cost per employee of 75% of annual salary.
Many organisations like to target staff turnover in the range of 10 to 18% per annum as this gives a good balance between retaining organisational knowledge on one hand and bringing in fresh ideas on the other. Turnover in this range implies that staff will stay for an average of 5.5 to 10 years which is good for retention of knowledge, experience with operating practices, productivity and continuity in client relationships.
Maintaining staff turnover within the targeted band depends on positioning the organisation as an employer of choice – being the type of organisation that people don’t want to leave and attracting great talent. This relates to creating a strong and compelling EVP. Consider the following questions:
In short, you should be taking the same care in putting together an attractive EVP for your target employees as you do for your target customers.
The much anticipated Essential Services Commission (ESC) determination on the 2016-17 Higher Cap applications is now out.
Over the last few months we've been showcasing our groundbreaking new research into the 7 organisational habits that drive high performance.
We've written many articles about the benefits of deliberately defining the culture you desire for your organisation and then deliberately bringing
Nicholas Barnett, CEO, Insync, went from stereotypical sceptic to passionate diversity campaigner. Here, he shares his story.
We use cookies to enhance your experience. Further use is considered consent. You can read more about cookies in our Privacy Policy.
You’ll always get a real person when you contact Insync.
Let's get started