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Employee Volatility Hurts Employers |
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Facility Management
September, 2007
MELBOURNE: Employee initiated turnover is costing Australian employers and the economy close to $6 billion annually or 0.63 percent of GDP, according to 1st Executive's analysis of the economic implications of employee initiated turnover. This represents 40 percent of total employee turnover, which costs Australian employers $15 billion annually, or 1.6 percent of GDP. The study's data reveals that over the past 19 years there has been a gradual decline in involuntary turnover.In particular, the period 1991-1995 and 2001- 2005 saw the steepest declines in involuntary turnover, reflecting the falling unemployment rates and Australia's ageing population. "There are less skilled people available in the Australian labour market, the skilled population is ageing, and therefore companies must have an increased focus on retention or else employees will vote with their feet, just like customers do," says 1st Executive director, Andrew Thoseby. Conversely, employee initiated turnover has increased steadily since 1987, compounding the pressure on employers to retain their existing staff. The increase has been a more gradual increase, with the period 2000-2006 experiencing the most dramatic incline. "The findings further confirm that Australia's available skilled labour population is extremely mobile, is exercising choice, and employers need to be proactive in retaining their key talent if they want to keep their workforce as participation rates decline," Thoseby says. Further, the study reinforces the findings of 1st Executive's report Australians' Attitudes to Work - The Great Divide, released in November 2006. That report revealed that Australian employees displayed little loyalty when it came to their current employers. Seventy-five percent of employees said that they were planning to move in the next two years, with 64 percent saying it was necessary for their career advancement.
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