Labour turnover is at the lowest level for four years, but its impact on the
bottom line is still failing to be measured.
The Labour Turnover Survey by the Chartered Institute of Personnel and
Development (CIPD) shows that turnover for all employees stood at 15.7 per cent
in 2003. This compares with16.1 per cent in 2002, 18.2 per cent in 2001 and
26.6 per cent back in 2000.
However, while the CIPD research shows a lower labour turnover rate than in
previous years, it is still very high historically, and employers continue to
report that it represents a significant cost.
Despite this recognition, the survey also found that only 12 per cent of the
577 personnel professionals questioned said their organisation was able to
calculate the actual cost of staff leaving the business.
The CIPD warned that HR would miss the opportunity to make an impact on the
bottom line if it did not measure the cost of staff turnover.
Charles Cotton, rewards expert at the CIPD, said that a low turnover of
staff could still hide numerous costs, including funding advertising for new
vacancies, recruitment and selection costs and training for new recruits.
"If you don’t understand the costs associated with each job, you are
not going to understand turnover," Cotton said. "If HR can quantify
the cost of turnover, then it can show its impact in figures that the financial
director will love."